The St. Paul City Council will host two public hearings Wednesday on an effort to exempt rent control for residential buildings constructed after 2004 and a separate initiative to install new tenant protections, including notification requirements after affordable housing has been sold.

Final council votes are not likely until May.

Hours before those discussions take place, a new council member will be sworn in Wednesday morning. Mayor Melvin Carter is appointing Matt Privratsky, a clean energy advocate and former council legislative aide, to fill the vacant Ward 4 seat on an interim basis through the Aug. 12 election.

Here’s an overview of what’s on the table:

Rent control

In 2021, St. Paul voters approved one of the stiffest rent control ordinances in the country, capping annual residential rent increases at 3%. Landlords have said that number falls far below inflation, property taxes, insurance and maintenance expenses elevated by rising construction costs.

Given those expenses, many residential units qualify for temporary exemptions from the rent caps, making getting around rent control when inflation is high mostly a question of filing the correct paperwork, to the frustration of those on all sides of the issue.

Developers have complained that the lending market has been unforgiving, undermining efforts to finance new housing construction, which has dwindled in the capital city. Even some advocates for more affordable housing and greater density, like the leaders of Sustain St. Paul, say it’s time to at least partially roll back rent control, provided it’s coupled with new tenant protections.

In response, St. Paul Mayor Melvin Carter proposed last August eliminating the rent cap for buildings that were issued their first certificate of occupancy after Dec. 31, 2004. Council President Rebecca Noecker, Council Member Anika Bowie and Council Member Saura Jost have sponsored an amendment to do that.

Council Member HwaJeong Kim has said she is staunchly opposed, and said more study is needed of the benefits of rent control.

Critics say the rent control limits have already been heavily watered down. In 2022, the previous council softened the voter-approved ordinance, exempting newly-constructed units for 20 years, with a 20-year lookback period. They permanently exempted deed-restricted and federally-backed affordable housing, while allowing newly vacant units to seek rent increases of 8% plus inflation.

The changes have made as much as a third of the city exempt.

Tenant protections

Council Member Cheniqua Johnson, who chairs the city’s Housing and Redevelopment Authority, has said any vote to roll back rent control should be contingent upon the council fully embracing tenant protections she is sponsoring. That package has drawn a majority of the council as co-sponsors, including Kim, Noecker and Jost, while drawing concerns from Bowie that the rules may be unenforceable.

In July 2020, the previous council approved a package of wide-ranging protections aimed at limiting — but not entirely eliminating — onerous security deposits, criminal history reviews, surprise building sales and other tools used to screen or oust tenants.

The previous package also included a “just cause” requirement to force landlords to explain in writing why they had chosen not to renew a tenant’s lease. The S.A.F.E. Housing protections went into effect in March 2021, but were challenged by landlords and temporarily put on hold the next month by a federal judge who expressed open skepticism they were constitutional.

Rather than press their case in court, in June 2021 the city council voted 4-3 to rescind the package entirely.

Johnson’s newly-introduced protections do not include the “just cause” provision. Still, Bowie has expressed doubt that the new package would survive a fresh legal challenge and judicial scrutiny.

Newly-proposed tenant protections

Here’s what the newly-proposed protections call for:

• Security deposits: Security deposits would be limited to the equivalent of a single month’s rent, unless the tenant’s application might otherwise be denied because of their criminal history, credit history or rental history. In that case, a security deposit could be equivalent to two months of rent.

• Screening criteria: A landlord must make their screening criteria “readily available” to any prospective tenant. A prospective tenant could not be rejected because of a conviction for a crime that is no longer illegal in Minnesota, a petty misdemeanor, a gross misdemeanor older than three years, and most felony convictions for which the last day served was more than seven years prior.

• Criminal history: For certain crimes, such as first-degree assault, arson or murder, a landlord could look back 10 years. Screening criteria could not include an arrest or charge in an inactive case in which the prospective tenant was not convicted, participation in a diversion program, or a conviction that has been vacated or expunged. Certain federal screening rules may kick in for lifetime sex offender registrations and controlled substance crimes.

• Credit scores: Landlords would not be able to reject tenants based solely on their credit score alone, insufficient credit history or insufficient rental history, though they could use a credit report that shows a failure to pay rent or utility bills. A prospective tenant cannot withhold their credit history or rental history.

• Eviction history: Landlords would not be allowed to consider pending evictions, evictions that are more than three years old and evictions that have not resulted in an order to vacate.

• Minimum income tests: If a landlord uses a minimum income test requiring 2½ times the rent or higher, the landlord must allow an exception if the applicant can demonstrate a history of successful rent payment using a similar or lower ratio.

• Alternative assessments: A landlord applying screening criteria that is more prohibitive than any of the criminal history, rental history and credit history limits in the rules “must conduct an individualized assessment” showing why they intend to deny an application. The landlord will have to “accept and consider all supplemental evidence” provided with the application.

• Tenant notice: Landlords would have 14 days to explain in writing to a tenant which criteria they failed to meet. Any local, state or federal funding or loan requirements would trump the city’s screening rules.

• Evictions for nonpayment: Evictions for nonpayment of rent would require advance written notice to the tenant specifying the total amount due, as well as their right to seek legal help and a phone number and web address for legal and financial assistance.

• Sale of affordable housing: If affordable housing is sold, the new landlord may not terminate or fail to renew a tenant’s rental agreement without just cause, raise rent or rescreen existing tenants during a three-month period of time known as the “tenant protection period” without providing relocation assistance.

• Relocation assistance: Relocation assistance must be equal to three months of rent for a unit priced for a median-income family, or 7.5% of the annual area median income, adjusted for family size.

• Tenant notification: Within 30 days of the transfer of ownership, the new landlord must give written notice to each tenant in an affordable unit that the property is under new ownership and explaining whether the new landlord will require them to rescreened, whether they will be terminated without cause and whether the new landlord intends to increase rent.

• Complaints: Landlords, tenants and prospective tenants can issue a complaint to the city’s Department of Safety and Inspections, and appeal DSI determinations to the city’s legislative hearing officer within 30 days. Tenants also can appeal to the courts.

If approved by the council, the new tenant protections still require the mayor’s signature, and then take effect a year later.

The city’s Office of Financial Empowerment would oversee coordination of the new rules by creating an online portal for all landlords and tenants to view rules, resources and enforcement tools and annually publish phone numbers for relocation assistance and other “know your rights” materials.