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Committee finds rent control unfeasible, looks to ARPA funds

Mark Parker

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Consisting of five of eight St. Petersburg City Council members, the Housing, Land Use and Transportation Committee received a briefing on the legal pathway for rent control during Thursday morning's meeting. Screen grab.

While the St. Petersburg City Council agrees that action is needed to mitigate skyrocketing rents and the subsequent displacement of residents, those actions most likely will not come in the form of rent control.

Five of eight city council members heard an extensive briefing from St. Petersburg’s legal department at Thursday morning’s Housing, Land Use and Transportation Committee meeting. The briefing marked the latest chapter in the ongoing saga to address the city’s affordable housing crisis.

The presentation, led by Assistant City Attorney Brad Tennant, followed Councilmember Richie Floyd’s request for a legal update on declaring a housing state of emergency, and enacting rent control, at last Thursday’s council meeting.

The news was not good for those in favor of the controversial measures. While there is a legal pathway, it’s narrow, and full of obstacles that could cost the city millions of dollars in litigation and make the situation worse for renters.

“I think this could have really negative consequences for the short-term, in terms of what rents look like this year until this gets enacted,” said Councilmember Gina Driscoll, who is also a tenant. Driscoll relayed her fears of an astronomical rent increase at her residence.

“And then long-term, looking at the consequences of having to possibly pay tens of millions of dollars – which if we have that I’d rather put that into housing affordability solutions that can last.”

Another sticking point for Driscoll is that the city would have to prove in court that a state of emergency and rent control are the only solutions to addressing the housing crisis. Not an easy feat considering the city recently adopted several affordable housing initiatives and an official 10 Year Housing Plan.

“We anticipate the potential for this (other initiatives) to be used against us,” said Tennant.

Legal counsel explained problems that arise in the wording of the state statutes regarding the measures and the number of preemptions they contain.

A city cannot impose rent control unless a governing body makes findings that establish that a housing emergency is “… so grave as to constitute a serious menace to the general public and that such are necessary and proper to eliminate such a grave housing emergency.”

A public hearing is required, and the measure would need voters’ approval. While that seems straightforward, the devil, as they say, is in the details.

If enacted, rent control measures would expire in a year. The city would then have to repeat the entire process. According to the statute, the city cannot impose rent control on “luxury apartment buildings.” In 1977, that included buildings with an average rent of $250 per month or higher.

While there is a legal pathway for rent control, state statutes, preemptions and limitations impede the process and open the door for litigation.

Councilmember Brandi Gabbard clarified that in a perfect world – where the city could enact rent control without litigation – the measure would only apply to landlords currently providing relatively affordable housing at under $1,150 per month. Tennant replied, “yes, that would very likely be the case.”

“That’s a huge concern for me,” said Gabbard. “That we would then be putting these restrictions on those who are already providing that level of housing.”

That was just the beginning of the potential roadblocks the city must navigate before enacting the measures.

First, the city would have to prove an emergency, and Florida courts have offered conflicting opinions on that definition. According to legal counsel, the last time courts thoroughly discussed rent control was during the second world war. Many areas around the country enacted rent control as part of workforce housing for the war effort.

Gabbard noted the city council received 294 emails regarding “the actual state of emergency” and asked what an emergency would legally constitute, especially in light of what emergency orders meant during the pandemic.

Tennant said the city code’s definition of an emergency is very limited in nature. He said the city code is limited to events such as natural disasters and did not think the housing crisis would qualify. He relayed that the Florida Supreme Court – relying on U.S. Supreme Court precedent – stated that an increase in prices does not constitute an emergency.

The city must also choose a method of rent control and an enforcement strategy and prove it is the only way to eliminate the emergency. It must then support those findings through commissioned studies.

When landlords and developers inevitably file lawsuits over the matter, the statute states the “burden of proof shall rest upon any party seeking to have the measure upheld.” Depending on the language of enactment, that burden could impact the city or the renter.

Tennant said the legal department considers the statute’s language as “strict scrutiny.” He said there is a Supreme Court precedent that directly aligns with the interpretation of the necessity of the measures and the burden of proof that is required.

“It seems the state has very cleverly put into place lots of triggers that actually make this a treacherous path to go down …,” said Driscoll. “There are so many risks with this – I really would like us to work harder and be more focused on finding immediate assistance … ”

Gabbard pointed out another unintended consequence of enacting rent control. While the city undertakes that process, landlords and developers could raise rents preemptively. She said they could also significantly increase the rent after the one-year term before the process must begin again.

Gabbard said regardless of her empathy towards people suffering through the affordable housing crisis, there are other mitigation strategies without battling the state legislature and opening the city up to frivolous lawsuits.

Floyd then began his remarks by pointing out contradictory legal advice. He recalled hearing that inflationary prices are not a cause for a state of emergency, while a state of emergency is also up to a governing body’s discretion. He added that rent over $1,150 per month constituting luxury apartments was an easily arguable and arbitrary number.

“The emergency is that we’re facing widespread displacement,” said Floyd.

First-term Councilmember Richie Floyd called for a legal update on rent control.

He pointed out that rent in his district has increased by an average of 30% this year. He said those increases force people who have called the city home for generations to relocate, and the cycle will continue if there’s no action. He added that the housing market failed to provide for human needs, which elicited a round of applause from those in attendance.

Both Gabbard and Floyd admonished the clapping.

“I really appreciate the things that the council and the administration have done for housing, and I think they should be commended for it,” said Floyd. “But I also think we should live in reality and recognize that they’ve been wholly inadequate to stave off any sort of emergency.

“I’m disappointed to hear it’s just more of the same.”

Floyd said he realized the state of emergency and rent control measures are a longshot and incredibly difficult but would also like to discuss the possibilities instead of just the pitfalls.

Those possibilities include advanced rent increase warnings, assisting with displacement costs and providing legal representation for tenants. He said the intention is not to penalize landlords – the intent is to address the 70% rent increases that are becoming far too common.

“I do think that we, as a governing body, could come up with a way this works for everybody,” said Floyd.

Floyd motioned for a resolution to declare a housing state of emergency without beginning the process for rent control. Driscoll, Gabbard and Councilmember Ed Montanari voted no, denying the motion.

There are other proposed solutions, however. Gabbard stated her desire to spend the bulk of the $45 million in American Rescue Plan Act (ARPA) funds to address the affordable housing crisis. She said Councilmember Deborah Figgs-Sanders is working on an updated report for her and “wants as much of that money as possible” to help renters making under 60% of the area median income (AMI).

Gabbard motioned to request that the city administration reevaluate ARPA funding for that purpose, which passed unanimously. The motion now awaits ratification at Thursday afternoon’s city council meeting.

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11 Comments

11 Comments

  1. Avatar

    steve sullivan

    February 10, 2022at7:05 pm

    He was not making a fool of himself he was trying to find a way of saying yes instead of no. If the prior council body had been doing their jobs this crisis would have never materialized to this degree. No innovative thinking led to city owned property being given to developers for pennies on the dollar with no significant amount of affordable housing units to speak of. 10-20% mixed income on city owned property is shameful and its still happening. City wide ordinance for affordable housing needs to be imposed and no – in leu of payments. Using the current approach you can’t build your way out of it at this point that will take decades. Driscoll and Montenari need to try harder

  2. Avatar

    Ryan

    February 10, 2022at7:08 pm

    Anemic wage growth is also contributing to the affordable housing problem. Perhaps city council should increase the minimum wage and look for opportunities to bring employers to the city with the economic development council.

  3. Avatar

    Mike

    February 10, 2022at7:13 pm

    Why say yes?

    Rent control has no evidence of success in the real world.

    Rent control has zero economic theoretical benefits.

    Rent control is illegal in this state.

    But, according to Floyd, everyone that tried so explain reality to him is ‘focusing on the negatives’. I was embarrassed on his behalf.

  4. Avatar

    Mike

    February 11, 2022at9:53 am

    I find it unbelievable my comment on Floyd was censored.

    The man willing voted to expose this city to 10s of millions of dollars in liability. This was according to his own legal team. The legal team virtually guaranteed failure. This was in addition to the glaringly obvious shortcomings of the “plan” that were pointed out by the other council members.

    If that is not foolish, I don’t know what is.

  5. Avatar

    Mike

    February 11, 2022at10:10 am

    So let me get this straight.

    A person can be a fool, but I can’t call them a fool, despite their foolishness?

    You don’t see how absurdly dangerous that is?

  6. Avatar

    rose hayes

    February 11, 2022at11:35 am

    We do not need the name calling Please let’s stick to the issues. Pinellas County School District, as of January 2022, has identified over 3,500 homeless children in the district. Reportedly, the number is growing. This is a large part of the issue in addition to ‘poverty’ wages, $8.70 an hour and a one bedroom apartment rents for $1600 a month. How did this all happen? developers? What? In 2019 one bedroom apartments were as low as $605 a month. This is an ‘in your face’ situation. I under the Rent Control issues and the potential liability to the city, so what can be done to get our ‘babies’ into decent housing??

  7. Avatar

    steve sullivan

    February 11, 2022at12:30 pm

    None of this below is factually true:
    Rent control has no evidence of success in the real world.

    Rent control has zero economic theoretical benefits.

    Rent control is illegal in this state.

    Please cite your resource

  8. Avatar

    Mike

    February 11, 2022at2:22 pm

    Hi Steve! Sure! Thanks for your interest in evaluating this topic.

    1. Philosophically, proving a negative is unreasonable. I am not the one pushing rent control. The burden of proof is on proponents of rent control to provide evidence that it has ever succeeded. Ever.

    2. Literally every introduction to economics book ever written will tell you the objective value of price, I.e. prices that have not been manipulated. Price is an objective truth. Price is the intersection of value and cost. For specific studies on rent control, by economists, I suggest a quick review of the Wikipedia page. Note that not a single economist cited supports rent control and their language is very clearly against rent control. My personal favorite is

    ‘The Swedish economist Assar Lindbeck, a housing expert, said that “rent control appears to be the most efficient technique presently known to destroy a city – except for bombing”.’

    https://en.wikipedia.org/wiki/Rent_regulation

    3. The city council meeting in st Petersburg Florida this week was a 50 minute explanation of rent control being illegal in Florida. That was the content of the entire meeting. The take away is not only is rent control factually illegal in this state, but it’s very illegal. No amount of mental gymnastics is going to reverse that. Here’s the link, in case you missed it. I also suggest you read the article above, which pretty clearly explains it’s status and the interpretation of the council. https://stpete.granicus.com/MediaPlayer.php?view_id=14&clip_id=5519

    I don’t want more homeless here or anywhere else, that’s why we need real solutions and not failed solutions. I think your assertion of factually true is misguided and driven by emotional want. No amount of emotion is going to reverse objective truth that rent control does not work, has no reason to believe to would work, and Floridians are forbidden from practicing it.

  9. Avatar

    Mike

    February 11, 2022at3:04 pm

    Hi Steve! I just wrote a respectful, detailed response, but it appears to have been censored, again. I point you to the Wikipedia page on rent control for the overwhelming consensus of economists. I point you to this very article for the legality.

    Sorry dont have a better forum for this conversation. Cheers,

    • Joe Hamilton

      Joe Hamilton

      February 11, 2022at3:38 pm

      Hi Mike – we review all comments before posting. We are a small team and it can take a bit of time. Please review our guidelines here: https://stpetecatalyst.com/ideas-first/. We believe this is exactly what makes us a better forum for these conversations.

  10. Avatar

    Mike

    February 11, 2022at4:12 pm

    Thanks Joe! Feel free to delete this redundant thread. I’m not trying to cause trouble. I’m just celebrating the council and their evaluation and their assessment.

    Fyi, from the user interface perspective, the comment was originally tagged as ‘in moderation’. Retrospectively, during review (I assume) both the comment and it’s flag disappeared, indicating to me terminal status. These events were on the heels of a comment that was censored earlier, which I won’t antagonize. Cheers,

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