St. Paul’s Rent Stabilization Ordinance has been in place for less than three month, but both landlords and tenant groups say that there are still many kinks to be worked out.
The appeals process, where landlords can request an exemption from the 3% rent rise cap, is one area that needs to be clarified. In June, the first hearings for such appeals started. The full schedule of hearings is available at the St. Paul legislative hearings office.
This is how the appeal process works, and what landlords or tenant groups have to share about it:
The process
A landlord cannot increase rent by more than 3 percent annually under the rent control ordinance. There are exceptions. A landlord can request rent increases above the 3% threshold if their circumstances are acceptable.
The ordinance , which was created by Housing Equity Now St. Paul(HENS), a coalition affordable housing advocates allows landlords to make exceptions to the cap if they anticipate that they won’t get a reasonable return for their housing investment.
This ordinance addresses seven situations that could limit a landlord’s rights to a reasonable return.
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Increases and decreases in property taxes.
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span style=”font weight: 400 Unavoidable” rises in maintenance and operating costs, such as if water prices tripled. Officials from the city said that there is no evidence yet to support a decrease in operating and maintenance expenses.
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Capital improvements are required to ensure compliance with safety and health codes.
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Changes in the number or use of a building’s furnishings or housing services by tenants.
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“Substantial degradation” of the unit beyond normal wear.
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The landlord is not providing adequate housing services, or is not in compliance with local and state housing regulations. The city officials also noted that they don’t know when this would apply and that it needs to be “road-tested.” This is when a tenant petitions the district court to make a landlord increase or decrease rent or refinance to repair the unit that has caused the tenant to have to move.
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Trend of rent increases and decreases in recent years.
Property tax increases or increased maintenance costs are obvious: Rent could go up if that cost goes higher, explained Marcia Moermond, St. Paul’s legislative auditor. Other situations are not yet discussed.
A landlord can apply to the city for an exemption from the rent cap rules if they feel they fall within one of these categories.
Moermond says that a landlord can apply for a rent increase of 3% to 8.8%. This is self-certified and almost entirely automated. Moermond stated that a landlord can request a rent increase if they are approved by the city.
However, requests to increase rent by more than 8% require the city to review each landlord’s financial records. A landlord may appeal to the City Council if denied.
Tenants are not notified by landlords that they have applied for an exception from the cap on rent increases. There is no mechanism to do this. Both the tenant and landlord have the right of appeal to City Council decisions on exceptions.
A tenant may notice that their landlord is trying to appeal the rent control ordinance. They can appeal to the city disputing the landlord’s claim that they are entitled for an exception. At which point, a hearing will take place and the landlord’s application will be re-examined.
Tenant groups are aware it is early, but have suggestions
Margaret Kaplan, president of the St. Paul non-profit Housing Justice Center is one of the organizations that helped HENS push for the passage of the rent control ordinance.
She stressed that the city officials are responsive and send information when requested about the landlord appeal process or tenant complaint process.
“The ordinance just got off the ground.” “The ordinance just got off to the ground .”
However, Kaplan stated that her organization had observed “obstacles”.
One is the cost. Any appeal filed with St. Paul codes carries a $25 charge. Tenants must pay the fee if they want to contest a landlord’s request for an exception.
Kaplan stated that it is not easy for everyone to do this.
Kaplan stated that another problem in the appeal process for rent control is the failure to notify tenants. This is especially true when the landlord self-certifies documents for an increase of 3% to 8.8%. She said that tenants are not sure when to file a complaint.
Eric Hauge, executive Director of HOME Line (an organization that provides legal advocacy and resources to tenants), said that he has received calls from tenants who don’t know that their landlords can self-certify an increase of up to 8% percent.
Hauge said that St. Paul staffers are “very open” about the appeals process. He is also for adding a method to notify tenants that their landlord is appealing the rent stabilization ordinance. Hauge said that the city could also take steps in order to ensure tenants are informed about every aspect of the ordinance as well as their rights.
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