The Center for Urban and Regional Affairs (CURA) at the University of Minnesota published a study in February examining the benefits and risks of implementing a rent stabilization program in Minneapolis found that a rent stabilization program should be paired with eviction protections. This study comes at a time when voters of Minneapolis are set to determine whether they should give their City Council the authority to adopt a rent stabilization ordinance, but the methods for how rents would be capped have yet to be determined. Researchers from CURA selected four “peer” cities - similar in size, rental market, and city budget - to compare their rent stabilization policies with a potential program outlook in Minneapolis. They also interviewed several industry professionals and building owners to evaluate market concerns and the impact of this type of program.
Researchers found that the program should likely have rent increases adjusted to inflation or CPI, while providing exemptions to units in newer buildings, and allow for market rate increases in units that have been recently vacated. However, with the latter option, there is always the concern that landlords may evict tenants in order to increase rents. That is why it is suggested that any rent stabilization program should be paired with eviction protections.
Key findings of the report on the impact of rent stabilization programs include:
- Rent regulations have been effective at maintaining below-market rent levels and moderating price appreciation.
- Rent regulation increases housing stability for tenants who live in regulated units.
- There is little evidence that rent control policies negatively impact new construction.
- Rent stabilization programs often result in a reduction of rental homes, as owners have responded by converting rental units to condominiums or removing them from the market by other means.
- There is not enough evidence to support the idea that rent regulations cause a reduction in housing quality.
- There is some evidence that rent regulation programs may not help the most vulnerable households.
- Click here to read the full report.