I write to take issue with Joe Krivit’s promotion of the HENS (“rent stabilization”) petition in the April Monitor.
In his column, Mr. Krivit mocks the very real possibility that the type of rent control being considered in St. Paul could actually make the affordable housing problem worse by compelling real estate investors to exit the St. Paul market.
The Brookings Institute, in a recent study, found that in some cities, rent control has resulted in an increase in gentrification and a reduction in affordable rental properties as the prospect of reduced rent has motivated property owners to convert their properties to condos (if in good condition) or tear them down and build anew (if not in good condition). A problem not addressed by Mr. Krivit is the likelihood that rental property owners who hang on will likely cut their maintenance budgets if forced with cope with reduced rents, and we know that renters bear the burden of that sort of disinvestment.
Finally, some of the numbers that Mr. Krivit uses to support his opinion are deceptive. He says that rents in Ramsey County increased 9% per year (2010-17), a presumed justification for rent control, while he ignores the fact that rents in the city of St. Paul went up an average of only 2% in roughly the same time period (about 3% more recently). While many people rightly support the funding and creation of more affordable housing in St. Paul (myself included), this HENS rent “stabilization” proposal, it seems, will not accomplish that, and it may make matters worse.
Full disclosure: I am not a real estate investor and I own no rental properties.
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