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Monday, December 5, 2022

Housing advocates and tenants ask to join St. Paul rent control case before federal judge

Two building owners who are against the city of St. Paul’s rent control policy have launched a lawsuit against the city, and a coalition of renters and housing activists has petitioned a federal judge for the authority to intervene in the case.

In June, Minnetonka-based Lofts at Farmers Market LLC and Woodstone Limited Partnership of Bloomington filed a lawsuit against the city, asking for a jury trial on six counts, including claims that the city’s 3 percent cap on annual residential rent increases is unconstitutional because it forbids automatic adjustments for inflation.

According to the federal lawsuit, the city lacks the resources to assess exemption petitions or hear “futile” appeals when such exemptions are denied, which the building owners described as a violation of the constitution’s right to due process and an unauthorized take of their property.

Trial in the lawsuit has not yet begun. And despite what the complaint says, a Raymond Avenue property owner who was unrelated to it won an appeal for a 15 percent rent increase on July 20. Additionally, the city council has subsequently updated the rent control rule passed by the voters to include full exemptions for new construction.

In a 24-page motion to intervene filed with the federal court on October 20, Housing Justice Center attorney Jack Cann requested the addition of Katherine Banbury and Angela Wilhight, two tenants of buildings affected by recent rent increases above 3 percent, as intervenors on behalf of the city, along with the West Side Community Organization, the Alliance for Metropolitan Stability, and Home Line.

In his memo, Cann emphasized that the city has conflicting allegiances to the interests of homeowners and residential developers and that it is unable to fully represent renters and rent control activists on its own. He emphasized that just two of the seven city council members openly supported rent control before to the November 2021 election, while four openly opposed it.

The housing activists would be permitted to file motions and present their case as intervenors, just like typical defendants. An assistant city attorney stated in a legal document on Thursday that St. Paul would not oppose to them joining the case.

The housing advocates’ involvement in the legal dispute is confusing and redundant, according to the building owners’ attorneys, who objected in a 15-page formal filing on Thursday. “Proposed intervenors’ participation will only complicate the case and unfairly tip the scales by adding five new voices to echo the city’s arguments,” they wrote.

They questioned whether the intervenors had timely complied with the obligation to join the complaint, which was filed four months prior.

Cann said he had spoken with the lawyers but was “unable to achieve agreement” in a legal filing on Wednesday.

Motions for summary judgment, which ask the judge to decide a case from the bench, must be filed with the court by November 7. On January 30, a motion hearing is planned for the lawsuit, which is before Judge Nancy Brasel in U.S. District Court in St. Paul.

Numerous landlords have used a self-certification process to request an exception to the city’s 3 percent cap on rent increases since the implementation of rent control in May. This process enables them to increase rents by up to 8 percent so long as they can demonstrate a financial need for a reasonable rate of return.

A small number of further appeals submitted by tenants or landlords who disagree with the city’s conclusions have been heard by the St. Paul City Council. On October 19, the city decided to cap the requested rent increase at the Cambric Senior Apartments, a condominium building on East Seventh Street, to 6.1 percent rather than 8 percent.

The Union Flats flats on Hampden Avenue, a different Dominium property, requested an increase of 8%, and the council granted it.

The council recently altered the rent control policy adopted by the voters to completely exclude new residential properties for 20 years after allowing a 15 percent rent increase at a Raymond Avenue property last summer. That change as well as others become effective on January 1.

Cedric Blackwater
Cedric Blackwater
Cedric is a journalist with over a decade of experience reporting on local US news, and touching on many global topics. He is currently the lead writer for Bulletin News.

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