Rent Control: A Tale of Two Cities
Rent control is a topic that hits close to home for me as a Twin Cities resident. Over the past several years, I’ve studied, followed, and analyzed both the Minneapolis and St. Paul rental markets closely—and I’ve seen firsthand how policy decisions shape outcomes.
What’s fascinating is that these sister cities (Minnie and Paul, proudly represented by the Minnesota Twins), separated by the Mississippi River, have experienced completely opposite results. My research aligns with findings reported by the Wall Street Journal: the divergence largely stems from differences in how rent control ordinances were designed and implemented.
St. Paul adopted one of the strictest rent control measures in the nation, which led to a sharp decline in new housing development and a chilling effect on investment.
Minneapolis, on the other hand, took a more cautious approach—authorizing rent control but requiring voter approval for specific measures. This flexibility has preserved development momentum while still addressing affordability concerns.
The numbers tell the story. Building permit activity in St. Paul plunged by nearly 80 percent and the development and investment markets froze. Historically, rent growth in St. Paul was nominal and below inflation; now, many property owners are passing along the maximum 3 percent annual increase allowed under the ordinance. Across the river to the west, Minneapolis continues to deliver approximately 3,000 units annually, while rent growth has been under 1 percent, thanks to new supply keeping rents in check.
Although St. Paul has modified the ordinance and exempted new construction, investment activity continues to suffer. Capital flows where risk is lower and where it’s welcomed.
Key takeaway: Although rent control ordinances are well-intended, they often have the opposite impact—and renters who need assistance the most end up facing unintended consequences. The Twin Cities is a real-world case study for cities across the U.S. considering similar ordinances.
What do you think? Should rent control be part of the solution, or do we need alternative approaches to housing affordability? Should cities lean toward strict rent caps or flexible frameworks? Let’s discuss.
