Good afternoon, everyone.

Welcome to the special committee on health opportunity, prosperity and education.

For Thursday, March twenty sixth, two thousand and twenty-six.

Madam Clerk, can you please call the roll?

Chairman Picardo.

Present.

Vice Chairwoman Peterson.

Present.

Councillor Inderwan is absent.

Counselor Royas.

Present.

Councillor Sanchez.

For present, one absent.

You have a quorum.

Thank you very much.

At this time.

Sub A.

Is there a motion?

The motion has been moved by Councilwoman Shelley Peterson, second by Councilman Miguel Sanchez.

Any discussion?

The motion has been approved and is before us.

Before we go any further, I also would like to entertain a motion to enter exhibit one, uh, a report.

The motion has been seconded.

And all those in favor?

Any abstention?

Any nays?

The ays have it.

It is before us and it is on the record into the record.

I also like to entertain a motion to um for the exhibit number two presentation into the record.

So moved.

The motion has been uh moved by Councilman Royal, second by Councilwoman Peterson.

Any discussion, any abstention?

All those in favor?

The motion carries is into the record.

At this time, just for the public's uh information, as you can see that those of us, those of you who are here, you see a good T large TV in front of us.

But uh due to the improvement that we've made here in the city council, now you could also see uh in the both screens to your right, to my right and also to the left and on the side.

Um and hopefully also you could hear us well better than before.

Is that a thumbs up?

Excellent.

And those of you who are watching online, um again, this is uh the the bill that we're uh taking on, and we have a a uh special uh a special guest uh with us that's going to provide us with a presentation, and that is for the committee members uh to review but also have the discussion here, and as a final um we're going to take a motion uh and then uh hopefully move this forward after so many so many years of discussion, but uh many months of discussion within within us but also in the community.

So with that said, I'd like to welcome our colleagues.

Uh thank you very much for being here.

Uh I see councilwoman Althea Graves.

Thank you for being here.

Councilwoman Jill Davidson.

Thank you, Chairwoman and Councilwoman Mary Kay Harris.

And I believe that is it for us, and obviously, council members that uh that are here.

We're also joined by our law um department, um etsy.

Welcome.

And of course, our wonderful uh staff and team from the clerks.

Uh thank you for uh being here.

So at this time, what I'd like to uh proceed with is the presentation of before we go, I just notice also that our uh deputy chief of staff for policy, uh Aaron Gardner is here for any questions that we may have uh within within the committee's members uh if we need clarification, along with our uh Brandon and also Gabby from Communication.

Thanks for being here.

I know we put a lot of work on and into this.

Uh so the first item that I would like to bring forward is the presentation by um miss give me one second.

Ums uh tram hong, senior associate from the policy link.org.

Uh she will rent she will present to us and speak about rent stabilization across the country and in providence.

Is uh we have the link.

Thank you and welcome virtually.

Uh can you hear us fine?

Yes, good evening.

Good evening, and is everyone able to hear?

Thumbs up out in the crowd.

Excellent.

So welcome and uh well again virtually to the province city council here at the state capital of Rhode Island.

It's nice to meet you, Ms.

Tram.

Yes.

Sorry, I'm seeing two of myself.

It's a little bit jarring.

But good evening, Chair Picardo and members of the committee.

Thank you so much for the invitation to join this call to present on rent stabilization and for making it possible for me to do so virtually.

I'm based in the Twin Cities in Minnesota.

So my name is Trom Huang.

I'm a senior associate at Policy Link, which is a national policy and research institute where I've spent the last few years tracking and documenting every jurisdiction in the US that has implemented some form of rent stabilization, approximately 200 of them.

And I also support state and local governments in developing and implementing the policy.

I'm originally from Oregon, a place that has had statewide rent stabilization for over five years and have been in the Twin Cities for the past nine years where I've experienced the impacts of rent stabilization as both a renter and a homeowner.

And in having many of these discussions across the country, I like to remind council members that there's a gift in not being the first.

It means you can remain grounded in empirical evidence of the long-term impacts of rent stabilization that have come from the 200 jurisdictions before you.

And with any regulation, whether it's a tenant protection or a zoning change or parking minimum eliminations, comes a period of adjustment, anxiety, and uncertainty.

However, you have decades of implementation to rely on to show how rent stabilization and robust housing development can go hand in hand.

It's why investors and developers continue to build in Washington, Oregon, California, New Jersey, Washington, DC, New York, and many other places that stabilize rents.

So during my time with you today, I'm going to cover three main topics.

The first is the literature on how rent stabilization works to improve housing affordability.

The second is addressing misconceptions about rent stabilization.

And the last is focusing specifically on the policy proposed in Providence.

And then I'll be happy to answer questions.

And before I dive in, um I can't see video of committee members.

So if anyone is trying to get my attention, I only see myself on the screen.

Apologies.

So feel free to interrupt.

Okay, it certainly will.

Thank you very much.

And if you can just also I know you mentioned about some uh the organization that you um come from, and also I think you shared also a little bit about your background and so forth.

Can you do that again for me, please?

Oh, sure, sure.

Um, so I'm a senior associate on the housing team at Policy Link.

We're a national policy and research institute based in Oakland, California.

And um, I myself have an urban planning background, and for the past few years have been at Policy Link, where I have tracked and documented every jurisdiction in the US that has implemented rent stabilization, so about 200 jurisdictions.

And then I also support state and local governments in implementing and evaluating the policy.

Thank you very much.

Appreciate it.

Yes, thank you.

Thanks so much for the warm welcome.

All right.

Um, I have slides, and I'm not sure if oh, perfect.

Thank you so much.

And I think council members, you have a copy of the slides too, so we can follow along.

Um, so we'll start with the research.

So if we go to the next slide, please.

There is overwhelming literature that shows how rent stabilization is highly effective at increasing housing affordability and stability and decreasing displacement for tenants.

And it provides broader benefits to entire communities, not just the households whose rents are stabilized.

Next slide.

One really important data point that I want to share since conversations about the housing crisis are rightfully gloomy, is the potential for positive impact.

And this is analysis from the National Equity Atlas, which shows that if Providence renters were not cost-burdened in 2022, they would have gained over 358 million dollars in disposable income.

That is money that could have gone to down payments, college savings accounts, groceries, health care, and the local economy.

And I'm sure this number has only grown since 2022.

And the report that I shared with you all is filled with research and statistics on the impacts of rent stabilization, but I also want to highlight some specific stats.

So if we go to the next slide, we can start with the effect of rent stabilization on stabilizing rents, which sounds quite obvious, I know, but is actually one of the things I find most overlooked when we're discussing the benefits of rent stabilization.

So the research shows that rent stabilized tenants pay less than non-rent-stabilized tenants.

And in LA, that difference is more than 3600 a year.

In San Jose, California, renters who are stabilized save over 3,700 a year in rent.

In New York City, it's over 6,000 a year and even upwards of 18,000 if you are a tenant in Manhattan.

In Santa Monica, California, the savings are more than 6400.

And in Cambridge, Massachusetts, before rent stabilization was abolished, rents in stabilized units were 44% lower than non-stabilized units.

Next slide.

I also want to talk about how rent stabilization improves stability, especially in places where tenants are feeling the pressure of displacement and gentrification.

In LA, moving rates decreased by 37% after the city adopted rent stabilization, and it decreased the most for Black and Latinx renters.

In New York City during the late 90s, during a period of rapid gentrification, rent in unregulated apartments in gentrifying neighborhoods increased by an average of 43%, but only 11% in rent stabilized apartments in the same neighborhoods.

Next slide.

From a governing and implementation perspective, rent stabilization speed, scale, and cost efficiency are unrivaled by other policy options.

It can take effect almost immediately and have tremendous reach.

For example, in San Francisco, 173,000 homes are stabilized by rent stabilization, which is three times the number of affordable units that are provided through all other rental housing programs combined.

And in New York City, more low-income households pay affordable rents in rent stabilized rent stabilized housing than in public housing and subsidized rental housing projects combined.

Now we need all of those programs, but the pure number of households that can benefit from rent stabilization is staggering.

Next, we'll move on to addressing some of the misconceptions about rent stabilization, and the biggest being its impact on the housing market.

Now, when discussing this, there's an important distinction to make between its implications for the construction of new housing product new housing production and the impact on pre-existing housing supply.

There is no evidence that rent control reduces the production of new housing.

This is from longitudinal studies in New Jersey, where over 100 jurisdictions have had rent stabilization since the 1970s, and studies nationwide, including the coverage of LA and Washington, DC.

Those studies found no negative impact on construction rates.

In general, other factors have far more influence on construction delays and housing production than the presence of rent regulations, such as interest rates that compel investors to invest in other commodities, tariffs that impact construction costs, and global supply chain issues, to name a few.

The main difference between these things and rent regulations is that it's much easier to stop rent regulations from passing at the local level than say persuading the Federal Reserve to lower interest rates or the president to get rid of tariffs.

Another way to think about this is looking at what happens when a city gets rid of rent stabilization, which is what happened in Boston, Massachusetts.

And contrary to the industry's claims that ending rent control would lead to a construction boom, the city did not see an increase in construction.

In fact, the housing market tightened with vacancy rates dropping from 4% to 2.9% four years after rent regulation was abolished.

So in regards to rent stabilization's impact on pre-existing housing supply, opponents of rent stabilization often point to the diamond study on San Francisco.

We can go to the next slide, which that study documented how some landlords converted their rental housing to condominiums.

So there are a few nuances to uplift from that study.

A closer look at the study shows that condo conversions were correlated with areas that were rapidly gentrifying.

For the most part, the condo conversions did not happen in other neighborhoods that were experiencing a normal housing market.

In normal market neighborhoods, landlords were apparently content to continue renting properties, presumably because rent stabilization was allowing them enough return and was not problematic.

The removal of properties largely occurred in gentrifying neighborhoods in which landlords wanted much higher profits and removed units via condo conversion to get them.

Now, one thing to think about is that condo conversion is not a reduction of the overall housing supply, but rather a repurposing of rental housing supply to home ownership housing supply.

It is a mischaracterization, therefore, to claim that rent stabilization reduces overall housing supply based on this study.

And in addition, if condo conversion is an issue, jurisdictions can follow in Washington, DC's footsteps, where they passed complementary condo conversion laws.

And DC's condo conversion law also pairs with its tenant opportunity to purchase law, which prioritizes giving current residents the opportunity to become the owner of their rental home upon condo conversion.

So the main lesson from San Francisco is that property owners can take advantage of loopholes to get out of the policy.

And this doesn't mean that the policy doesn't work.

We saw the statistics that showed it helped affordability, but rather that the policy had design flaws and we can fix those rather than writing off rent stabilization as a whole.

If we go to the next slide, on a more positive note, we have seen rent stabilization and robust housing production go hand in hand.

And this is not because rent stabilization creates units.

It doesn't, right?

It's a protection tool, not a production one.

But it further proves the point that other factors beyond rent regulation shape production.

We've seen this in places across the country, in the Bay Area, for example, the six cities that had rent control produced more housing units per capita than cities without rent control.

In Montgomery County, Maryland, which passed rent stabilization in 2023, building permits hit a 10-year high in April 2024.

And in Portland, Maine, which passed the strongest policy in the country in 2020, the city experienced a 175% increase in the number of units permitted for development between 2020 and 21, despite the policy having no new construction exemption.

So of course, this is again not to say that rent stabilization creates units, but rent stabilization and housing production in the right environment can go hand in hand.

The next slide, I want to also tackle a myth about property values.

So I've done more research on this recently, given concerns that have come up, and a review of the literature shows that rent stabilization does not reduce property values.

One study of New Jersey cities found that there were no significant differences between cities with and without rent stabilization when it came to new.

Excuse me, can you just uh start over again?

I I know there was a break in the audio.

Can you just on that one?

Of course.

Thank you.

Yeah, thank you for letting me know.

Um, so the next myth I want to tackle is about property values.

And I've done more research on this recently given concerns that have come up and a review of the literature shows that rent stabilization does not reduce property values.

One study of New Jersey cities found that there were no significant differences between cities with and without rent stabilization when it came to both new construction rates and the property value changes over the course of a decade.

This is significant because, like I mentioned earlier, about 100 cities in New Jersey have rent stabilization.

So it's a pretty large sample size and over the course of many years.

Research in Berkeley and Santa Monica also found similar results related to property values.

Even with rent stabilization in place, Berkeley's median value of owner-occupied units nearly doubled between 2000 and 2010, and Santa Monica's median home value increased 4.5% from 2010 to 2015.

Next slide, please.

Next, I want to talk about some really important scenario modeling that was done by the Center for Urban and Regional Affairs at the University of Minnesota, which they used real estate performers to calculate what investor returns would have looked like with rent stabilization in Minneapolis.

And most importantly, they compared that calculation with actual rent increases.

So I'll walk through the bars of this graph and explain it in more detail.

The first bar, starting from the left, looks at the internal rate of return, which is a common measure of profit that investors use.

Internal rate of return for apartments that increase rents by the average rent increase in Minneapolis during the period of 2009 to 2019.

The second is the internal rate of return for apartments that increase rents by median rent increase in that same period.

And the third is the internal rate of return for apartments that had the highest rent increases in the city.

So about 90th percentile terms of if we're looking at the whole range of rent increases.

Now, as you can see, the highest rent increase, where it's labeled Minneapolis High, had the highest internal rate of return, and that makes sense, right?

Increased rent by higher levels, you have higher profit.

Now, what researchers did was they took a look at historic rental data and applied theoretical rent caps.

They asked the question during the period of 2009 to 2018, what would internal rates of return have been if there had been rent stabilization and landlords had increased rents by the annual cap.

And what they found was the bars on the right hand side of the graph.

And I can walk through those as well.

So the one that's labeled 75% of CPI shows what the internal rate of return would have been if landlords had increased rent by a rent cap equal to 75% of CPI between 2009 and 2018.

So here you can see that if rent cap was applied, the returns would have been the same as the Minneapolis average rent increase.

Now, if the rent cap had been equal to CPI or inflation, the internal rate of return would have been higher than both the average and median rent increases.

And then if we look at the two columns or two bars on the right, if the rent cap had been CPI plus 3% or CPI plus 7%, both very high caps, the internal rate of return would have been higher than average median and highest rent increases.

So what does that tell us?

It shows us that even in the absence of rent stabilization, landlords were able to increase rents as much as they needed to cover operating costs and profits without exceeding the retical rent caps.

Next slide, please.

In other words, the average apartment owner would not have been affected by rent caps if they had been implemented in the past during that 2009 to 2018 period.

And even the strictest rent caps, which were 75% of CPI, would only affect a minority of apartment units.

That's a really important learning, I think that actually uses real estate performas that are being used in the market.

And I think that type of research is quite rare.

Now, another benefit of rent stabilization is that it equals the playing field for local operators by interrupting the cycle of speculation and wealth extraction that is allowing predatory investors and corporate landlords to buy a bar communities.

When we ban their predatory behavior and push them out of the market, we create more space for small local developers and property owners who don't have to compete with the multi-billion dollar corporation.

And most importantly, who are stewards of housing in our communities, as opposed to seeing it purely as a vehicle for profit.

Next slide, please.

Now, in the debate to pass rent stabilization, I often see policymakers get caught up in a false choice, which is that we can either have rent stabilization or other protections.

And I and my team at PolicyLink encourage an abundance perspective, which is that we actually need all the tools.

We need to pass everything.

The housing crisis that we're in was a death by a thousand cuts, so we will need a thousand solutions.

And rent stabilization is not the silver bullet, but there is no silver bullet.

And we cannot solve the housing crisis without rent stabilization.

So here are some of the ways that rent stabilization complements other much needed housing strategies.

One is that it limits the potential for rent inflation in subsidized units, which can make our housing voucher dollars go farther and be more effective.

It dovetails really well with tenant right to counsel, which provides tenant lawyers with more tools to eviction.

Oh, are you still there?

I think we just lost the audio.

Oh, I think can you hear me?

Yes.

Okay, great.

I just want to make sure.

Yeah, I'm sorry, I couldn't hear myself either.

Okay.

Just give us one second.

Uh, we're gonna reconnect again.

We see you in.

Thank you.

I'm sorry about that.

It's okay.

We'll blame it on the technology.

We're still trying our best here uh to adapt this uh new technology.

And uh so far has been great.

So we're back online.

Excellent.

You may proceed.

Thank you.

Uh I will I think I left off at right to council.

We'll see.

Um, so rent stabilization also dovetails well with tenant right to counsel and gives tenant lawyers more tools to fight evictions.

And um, when paired with just cause, rent stabilization and just cause together can protect tenants from multiple forms of displacement, economic displacement, um, lease non-renewals without cause, and discriminatory and retaliatory evictions.

And probably most importantly, but I did not put on this slide due to space, um, is that rent stabilization keeps tenants in their homes while our housing production strategies can kind of catch up to the gap in housing supply.

We know that increased production is necessary, but building takes a lot of time, and while that takes place, rent stabilization can help keep people in their homes now.

And next slide.

Lastly, I find that opposition to rent stabilization often leans on economic conventional wisdom to claim that rent stabilization won't work.

But the assumptions that come with that wisdom have been overturned by empirical evidence.

And I am not an economist myself.

I'm trained as a planner, but I have talked to some academics out there who have done a lot of work in the field of economics on housing policy.

So I want to share a few of their words that they've had published in various pieces about rent stabilization.

The first is from Dr.

Mark Paul, who's at Rutgers, who writes nearly every econ 101 student learns that minimum wages are a bad idea.

Decades of empirical work demonstrate that minimum wage laws do not generate job losses, nor does the policy hurt low-wage workers, as many economists had claimed.

It seems the profession's anti-rent control stance is well poised to be the next piece of quote conventional wisdom to tumble.

It's time for us to rethink rent control and come to terms with the data which support it as a common sense approach to start writing the ship.

And then the next piece that I encourage you all to read, I've linked it in the presentation, but I've just pulled a sentence from, or from two economists at the Open Markets Institute who write the truth is that the house, sorry, the truth is that the market itself needs to be fixed.

Specifically, any plan to overhaul the housing market needs to first confront the power of landlords to raise rents.

Next slide.

So to summarize this part of my presentation, I'll share some other policies that put your proposed one into context.

And as you can see here, many cities cap their rent in the two to five percent range.

So you are in good company with the ordinance that you all are discussing.

So a few examples here are for Minnesota, New Jersey, and smaller cities in California.

And you can see a mix of lot percentages, percentages that change depending on if the tenant pays certain utilities, percentages that change depending on if the tenant is a senior, and then we have some CPI-based formulas as well.

And then the last thing I want to talk about, which is all on one slide, but I'll spend a few minutes on this, is speaking about the specifics of Providence's proposed ordinance, which I've looked through and think is quite strong.

I've seen enough policies from across the country to recognize design flaws.

And I want to point out a few of the ways the proposed ordinance has actually learned from those pitfalls.

So a few pitfalls that you all are avoiding, and I'll just kind of run through the list.

Um, your base rent definition is great.

It has a backdate of 180 days, which really makes the ordinance effective upon passage because it avoids landlords having the incentive or even chance to increase rent as soon as they hear about the policy.

So it protects tenants from at worst retaliatory rent hikes, which have been used to punish tenants who are organizing, organizing for tenant protections, for example, demanding repairs, or otherwise attempting to enforce their rights to safe and habitable housing.

The second thing I think is strong is how you all clarify utility billing changes and clarify how changes to utility billing can impact rent increases, because it'll avoid landlords adding utility related junk fees, surcharges, or administrative fees to try to circumvent rent caps.

And this is just a very relevant issue within the past few years, the FTC has opened up multiple notices of proposed rulemakings about junk fees related to rental housing.

So this is a very good aspect of the policy.

Currently defined, it is at least 90 days to be off-market to be considered removed from the rental market.

And this is strong because it avoids creating the incentive for landlords to temporarily take rental housing off the market so that they can increase the rent above the cap.

We see that kind of loophole exploitation a lot in California.

They're referred to as Ellis Act evictions, where landlords claim to no longer rent out a housing unit, but tenants will see their unit back on the market for a much higher rent just a few weeks later.

The next piece is partial vacancy decontrol and allowing only one standard increase upon vacancy.

This is great because it avoids creating the incentive for landlords to evict or non-renew leases so that they can flip a unit.

And in places where full decontrol exists, where there's no limit to rent increases at the point of vacancy.

Landlords are incentivized to evict tenants, especially in places without just cause eviction protections.

The next thing is housing standards compliance.

That's kind of a best practice for me.

It ensures that landlords cannot defer basic maintenance and expect to be able to increase rent or increase rent beyond the cap.

Next is the formula that you all have for property tax adjustments.

I think it's key because it acknowledges the proportionality of the impact of property tax increases on rent increases.

We often hear landlords say that because their property taxes went up 10%, rent should go up 10%.

But we know that is not necessarily the case because property taxes are only a portion of rent.

And generally, if a property owner still has a mortgage, that will be the largest piece of their monthly cost.

The formula will not only help with implementation, but also ensures that anyone reading the policy understands that concept of proportionality.

Then there's the tenant notice for improvements and that requirement, not only for improvements, but also appeals and other processes, which I think is strong because you really need transparency and the opportunity for tenants to dispute if needed.

If nothing else, tenants who know they can't afford an upcoming rent increase that their landlord is requesting from the city will have more time to search for new housing.

And then you have the hearing timeline requirements, which I think are strong.

Requiring hearing within 90 days of filing is key because it avoids situations in which tenants lose hope that any decision will come out of the process or that the decision will take place soon enough to have a material impact on their situation.

Some tenants, if there is no window in which the hearing has to happen, they will choose to move or self-evict just so that they can move on with their lives and avoid pressure from their landlords or avoid clinging on to hope if they know it's not going to work out anyways.

Next is the explicit allowing of collective complaints.

Now, this is something that I think people really overlook when it comes to implementation, because allowing collective complaints helps to avoid redundancy and wasted time.

It allows more cases to be heard.

In St.

Paul, for example, nonprofit legal aid providers were forced to represent multiple clients in one building and all of them as separate cases, even though they're all disputing the same rent hike because the city did not allow collective complaints.

And so collective complaints would have saved everyone time and resources.

The nonprofit legal aid providers could have helped all of those tenants in the same building dispute that rent hike in one case as opposed to 20 separate ones.

And then lastly, leveraging the city's fines and fee system for violations ensures that the policy has teeth.

In St.

Paul, for example, voters actually had to go back to the ballot four years later to pass administrative citations as an enforcement tool because we didn't have one in place.

So for those reasons and many more, I have found Providence's proposed policy to be strong and one that really learns from the mistakes and weaknesses of other policies.

And that is all I have for my formal presentation.

Thanks for giving me the time to share.

I know it was a lot of information.

Thank you, Trom, uh, Ms.

Hong for that wonderful presentation.

And to our colleagues, you do have in front of you a report called Our Homes Our Future, Rent Control Explained for Elected by Ms.

Trum Hong from the Policy Link.org.

At this time, what I like to do is uh also uh recognize uh uh council president and the main sponsor of uh rent stabilization, uh Rachel Miller.

Uh welcome.

And uh this time also would like to entertain some questions before I chime in.

Questions?

Consulwoman Arcilly Peterson.

Thank you.

Can you hear me okay?

Yes, I can hear you.

Um thank you very much for the presentation.

Um I wanted to ask, because it's something that has come up in our um in our ongoing listening sessions and in speaking with um uh financial colleagues that support the city, but also um really have taken and and reviewed our um this particular ordinance.

The question I have is related to shifting the tax burden on to single family homeowners.

The question I have is related to shifting the tax burden on to single family homeowners, and one of the things that continues to come up is that the burden of the lost revenue from what we're trying to do here would then shift over to the single family homeowner.

In your experience in reviewing all of these municipalities that currently have rent stabilization, have you seen that particular trend as something that's common or have you seen it at all?

Yeah, thanks for that question.

I did do some additional research on this within the last few months because it has come up a lot in conversations.

And what we can say based on longitudinal long-term studies is that rent stabilization does not hurt property values.

Um, I mentioned the New Jersey study and some of the numbers in Berkeley and Santa Monica, those are the long-term studies that are out there.

Um because property values are not impacted in the long term, then the that fear of shifting burden of taxes onto single family homeowners does not um come into fruition.

And so I'd say based on the long-term data, the data shows that rent stabilization does not hurt property values, therefore that fear is somewhat unfounded.

Um, I think when we think about short term, temporary fluctuations in housing markets need to be much more long-lasting and much larger to impact tax burden and tax revenues.

Um, for example, economists have found that the relationship between a property's sales value and its assessed value is weak.

So, you know, with any market downturn, you'll see perhaps the drop in home prices or uh such as when interest rates rise, you'll see some home prices drop.

When interest rates drop, you'll see some home prices rise.

Um, but an increase or increase in property value does not automatically translate to a similarly proportioned increase or decrease in property tax revenues because assessments themselves don't respond so quickly to market changes.

Um I think you know, regardless, if we think about how governments approach taxes in general, um, they can take steps to equitably ensure sufficient tax revenue by adjusting rates to maintain revenue and anticipation of decreased assessments, um, which is something that you already do.

But what we've seen in the literature is that in the long term the research shows that there is no impact on property values.

Thank you.

Thank you.

Any further uh questions?

Consumer Royus.

Thank you, Chair, and thank you, Trump, for your presentation uh tonight.

Um I was wondering if you could go uh or provide this committee with local context um with you having associations with St.

Paul and Minneapolis, um, there is also this ongoing assertion that uh in St.

Paul after the passage of rent stabilization, we've seen rising rents um uh exceed uh Minneapolis as the current status quo.

And and so that's one one clear clarification I'm looking uh for you to expound on is second piece is um can you provide local context to the this assertion that there was an immediate drop in construction permits after the passage of rent stabilization?

And if I could sneak in, uh I guess one thing I discovered, and maybe you can verify this or actually say what I've discovered is not factual, but in terms of the construction permits, uh as of current, the most current data I've looked at, we've actually seen a steeper decrease currently in Minneapolis in terms of construction permits compared to St.

Paul.

And I was wondering if you could uh verify that as a as a uh fact.

Yes.

Thank you for that.

Sorry, I'm like I'm uh taking notes, so I make sure I answer all of them.

Um, context on St.

Paul in Minneapolis in terms of rent increases, the assertions around supply dropping or permits dropping, and then verifying information about a steeper increase, sorry, steeper decrease in Minneapolis and St.

Paul.

Okay, let me tackle those.

Thank you.

Um I appreciate the question.

Yeah, as someone who lives in the Twin Cities, we have been in the news a lot in the last few years for more reasons than just housing.

And as we've experienced throughout that time, the coverage is not always accurate.

So I especially appreciate the chance to clarify as someone who lives here.

Um so I think the important thing to think about is that rent stabilization does not decrease rents, right?

It still allows rent increases.

And so St.

Paul, Minneapolis, many other cities in the last few years still saw increases in rent.

Um I have not seen reports that Minneapolis rents have increased less than St.

Paul rents, um, at least for asking rents, which is a measure that is commonly used.

Um I will get back to you on that one.

Just because I haven't seen the data, does I mean I just have to look at it, right, and find it.

Um, but from what I've seen, there isn't a very clear, you know, people aren't saying like, oh, rents are much cheaper in Minneapolis.

In general, rents are cheaper in St.

Paul just due to the housing market.

So to add a little bit to that context, um, St.

Paul is the state capital.

It's always had a slower development market than Minneapolis for many reasons, including um 22% of its land being property tax exempt because there are many government buildings, it's home to the state capital, the city council buildings, the county seat, there's many churches, colleges, and universities.

So 22% of the land is tax exempt.

That means that um St.

Paul naturally has higher property taxes.

And um Minneapolis is seen as that, you know, that city with Fortune 500 businesses, St.

Paul is the more um like government college religious religious institution city.

So that's kind of the comparison between the two.

Um so in that sense, St.

Paul has always been a slower market and cheaper home prices, lower rents.

Um another thing to think about is prior to rent stabilization's passage in 2020, the St.

Paul City Council authorized hundreds of permits for a unique mega development on the former Ford plant site.

It's a 122-acre, basically a vacant plot of land that the city had spent decades um trying to create a master plan for, and in 2020, they finally approved hundreds of the permits for that.

Um we also had a new soccer stadium pop up, and a lot of apartment buildings um come up and have permits approved in 2020.

So the presence of both of those large developments pushed up the pre-ordinance comparison metric, making the drop between um 2020 and 2021 much greater.

In reality, um 2021 permit numbers, which was the year that rent stabilization was passed, 2021 permit numbers were greater than they were every year between 2008 and 2019 in St.

Paul.

Um, so the drop we saw between 2020 and 21 is after the approval of permits for two mega developments.

Um the other thing is looking at uh the timing of the permit information itself.

So if we look at years, we see a drop between 2020 and 2021.

Um, but if we look at the months of permitting, that really does not line up with the assertion that you know rent stabilization caused a drop.

And I kind of walk you all through the timeline, which is that um January had normal development, and then February is when the steep drop-off took place.

That's three months before rent stabilization was even put on the ballot.

Um signatures were collected and rent stabilization was placed on the ballot in June and was approved by the voters in November.

And the ordinance itself did not go into effect until May of 2022.

So the claim that rent stabilization caused the drop um doesn't quite line up because the drop happened before it was even put on the ballot.

And if we look at what happened after election day, permits actually began rising in December of 2021, which is the month after voters approved rent stabilization.

So I think um a closer look at the monthly permit data shows that that claim doesn't hold water.

Um and the the timing is off.

I'm so sorry.

I uh gave you a lot to comment on.

The last one was looking at uh current data in terms of construction permits um from Minneapolis to St.

Paul.

What I've uh found was that um there has been an actually steeper decline in construction permits right now in Minneapolis compared to St.

Paul, while St.

Paul currently has um enacted rent stabilization.

Yes.

Sorry, let me pull up some numbers.

Um yes, when we compare permits in 2024 to the 2020 to 2023 average in between Minneapolis and St.

Paul, you are right.

Minneapolis experienced a greater drop um than St.

Paul.

And I think it's important to mention too that these dramatic drops in new permits, especially when we look at that window of 2020 to 2024, um, have also taken place in similar size cities.

So Cincinnati, Ohio experienced a drop of 77%.

St.

Louis experienced a drop of 68%.

Denver experienced a drop of 52%.

And it's important to name that not none of those three cities that I just named have rent stabilization.

So you know, rent stabilization, it's can't really draw a correlation because these drops are happening in places that don't even have it.

So again, it goes back to this idea that there are much larger forces at play.

Thank you.

Uh for the question, Councilman Ruiz.

Thank you.

Councilman Miguel Sanchez.

Uh, thank you.

Councilman Roy is actually, you know, uh asked uh the main question I had in terms of how uh development was impacted in uh in the Twin Cities, since that's where you're from.

Um thank you, Trump, for for this presentation.

It's uh very clear uh uh points uh that we've been discussing for a couple months now.

Um I would wonder, Trump, since since you have uh studied and been involved in so many uh uh studies and uh legislative processes, you you you could say across the country.

Um you obviously have been looking at it on a very like policy lens uh uh lenses.

Um but I don't know if you have any thoughts or comments uh regarding like the political uh challenges that rent stabilization, rent control uh legislation has uh across the country.

Um and to be more specific, uh all the lobbies and and uh associations that you know uh spend uh a tremendous amount of money to to oppose this kind of legislation.

Um I don't know if you have any thoughts or experiences um on the political aspect of it.

Yeah, I'm happy to speak to that.

And you know, this is based on my experience with campaigns in Washington, California, um in Maryland and states where it's still being considered, right, such as Massachusetts and um Illinois for a long time.

So I think big picture when we think about just the real estate industry, they have a very vested interest.

And this is seen, this is very evident in how much money they spend um politically to uh to lobby at the federal level, but also lobby at the state level and local level.

Um they have a very coordinated network that seeks to protect those shelf interests, which you know we live in a capitalist society.

The self-interest of a profit-seeking uh entity is to maximize profits, right?

And so their self-interest is to protect their right to increase rents as much as possible.

And that if we back up a little bit in history is one of the reasons why in the 80s, during you know the Reagan era, we saw so many real estate lobbies um back preemption laws at the state level.

That's why so many states currently have um a state ban on local rent control ordinances.

Um that was a you know coordinated effort by the real estate lobby to pass those preemp preemption policies, and it's been very challenging politically for states to lift those preemptions.

Um if you think about you know Oregon, for example, they actually still have their local preemption in place.

They passed a statewide policy, but the preemption that prevents local cities and jurisdictions from passing their own rent stabilization policies is still in place, and so I think that shows you how challenging it is to lift preemption.

They can pass a statewide policy, but they still haven't been able to lift it.

Um I think what I've also learned from working on campaigns across the country is that you know the it can be easy to stoke fear around a policy like rent stabilization, and they've invested a lot of money in paying for studies that stoke that fear.

Um I think a good example is uh the one that came out of Massachusetts, um making claims around property values and property taxes, which has a ton of flaws uh related to its methodology, which you know I can go into at a later point if people want me to.

Um but when it comes to our housing crisis and when it comes to the places that we you know live, sleep, eat, I think there's a lot of fear that can be attached with changes that happen.

Um I think the opposition can sometimes take advantage of that and um use that to sometimes pit community members against each other when really we're all on the same side, right?

Our community wants people to be able to live in their homes as long as they want, whether they're a homeowner or a renter.

And yet we see research that says, hey, if we or quote research, right, not empirical evidence that says, hey, you know, if we help tenants, this might hurt homeowners.

So I think it's really important for us to step back, take a deep breath, look at the empirical evidence, and think about who's telling us what and um what the self-interest is, and you know, looking at these other places that have passed rent stabilization, 200 places.

I don't think we appreciate the the levity of that enough.

Because if a policy had been passed in 200 cities that wasn't rent stabilization, I don't think there would be that much debate.

Um that's a lot of precedent and a lot of places that we can lean on to say, hey, the real estate market hasn't been destroyed in California, certainly hasn't in New York, it certainly hasn't in Oregon, Washington.

Um these are places, cities, states that are thriving still, and they have rent stabilization.

So the abundance approach here is important.

We can have many things at once.

We can protect tenants and we can protect homeowners.

We can pass tenant protections, we can also change zoning to make building easier.

Um we need all of these things.

And I think sometimes the opposition will create fear around like a very specific idea, and we need to take a step back and think about rent stabilization as one piece of a much larger approach that we need to take to solve the housing crisis.

Thank you.

Um I have a couple of questions, and then I'll open it up to colleagues that are present here if they would like to uh ask some questions.

Um just uh in reference to the uh your presentation regarding uh the 4% and when you described it as most of the uh rent stabilization um cities and states that that have a are tied to CPI.

Um for us here, how do you compare that uh we don't have it tied to CPI?

How do you compare it to what's before us?

Uh that we have a 4% cap before they go before a board uh to raise it up to a cap of 10%, just to find their cost, whether there is a large repair of uh of a roof, a boiler, or other improvements.

Um compared uh can you can you speak to to that uh a bit?

uh a bit and then the other one that i would have is that um in reference to the uh uh fair return and the return on investment when you when you spoke on the return on on investment and you compared it with uh rent uh stabilization and one without um and then lastly is in these 200 places that you referenced that there's rent stabilization is that also just rent stabilization or rent control or and can you describe both if that's uh if you're able to do so in a sense that uh to clarify for people and for for us as we say rent control as as it was um implemented in other cities many years back compared to what it is now yes sorry I am uh keeping track of the the questioning I and I might go back to you if I can't remember the last one um so starting with the comparison the cap with other places um so I'm looking at the slide that I had now and I think the the proposed cap in Providence is well within the range that we see with other uh other cities what we find is that statewide policies tend to have higher caps but that is more so a result of the legislative process and the negotiations the push and pull that has to take place in order to pass a policy um in states the original proposed bills always have a much lower cap than what is ultimately passed whereas what we find in cities is that caps are much lower than what we see at the state level and so you know Trent and New Jersey for example has four percent annual rent cap two percent if the tenant is a senior um Antioch California has 60% of CPI or 3% whichever is lower what we actually found during the more recent years of incredibly high inflation is that there were some cities in California who had a CPI based formula it was you know CPI or 50% of CPI or 75% of CPI and they actually went back to the city council and had to strengthen the policy and add an additional flat cap because inflation was so high.

So for example you know there's a year when inflation was seven percent so um I can't remember exactly which city but they had to go back I think it was Oakland or Richmond.

They went back to city council and asked for you know in addition to our cap being 60% of CPI can we say 60% of CPI or 3% because during these high inflation years 60% of CPI is still too much of an increase for tenants to bear especially when incomes were basically dropping relative to inflation um so I hope that um speaks a little bit to kind of the CPI conversation um and then when it comes to the formula or I'm sorry not the formula the the appeal process to for landlords to go through to increase rent more than the cap.

I think that is a very you know depending on how the process is designed generally having a process like that is a great idea.

And what they found was that the the few landlords who did use that appeal process got their um got their extra rent increase approved and you know it's because they provided the evidence that showed that they actually needed the rent increase due to changes in their cash flow due to unexpected costs things like that.

So as long as there is um evidence based process for landlords to justify their need to rent increase um to increase the rent more than the cap then that is generally a good pathway to have because the cap um does not work for every scenario but you want to make sure that people who seek an exception have the have the receipts essentially to to justify it.

And then the last thing I think you asked was um comparing rent control to rent stabilization which I apologize I sometimes use the terms interchangeably um in I think there's in New York and California specifically there are a few differences.

So based on my work in California I have learned that people like to call their their local um rent control policies rent control but they are very similar to the policy that you're proposing um in California rent control also very commonly is passed in partnership with just cause so that tenants are protected kind of full circle um various types of evictions and displacement now in New York as you had kind of mentioned there is kind of old school first generation rent control which is very strong there are very few units left in New York City that are rent controlled.

There are very few units left in New York City that are rent controlled.

And then there's rent stabilization where many more tenants benefit from.

I want to say it's well, I actually don't have the numbers, so I don't want to say the wrong number, but um magnitudes more people in New York City benefit from rent stabilization than rent freeze, or sorry, then rent control, and rent stabilization in that sense is a more relaxed moderate policy, often seen as second generation rent control and is more synonymous to the policy that's proposed in Providence.

So generally when I say rent control, I kind of mean rent stabilization.

The terms are used interchangeably in some places.

The places where it's not are New York, where they have a very clear rent control regime and a rent stabilization policy that are separate, and in California, where they just generally refer to rent regulation as rent control.

And please um feel free to ask follow-ups if I did not get everything.

Uh thank you.

I have one more.

Um the other one is in reference to the rate of return for landlords, what is what is uh um seemed fair uh in your uh research, and also with the assertion of of or people indicating that investments will or investors or developers will stop investing in cities when they have uh rent stabilization.

Is there any evidence or can you speak to that?

What has been the impact um downward or upward or stagnation in a way?

Can you just uh expand on that?

Sure, sure.

Yes, so the Minneapolis research um that is on slide 11 of what I shared with you all that is that uses kind of um a common market marker of return, which is internal rate of return.

Um and uh in that based on the real estate proformas that were used to do that projection, um, some common internal rates of return were like 16% for like an average or median building, and then on the high end internal rate of return was 22%.

Um I don't think any single person or like I don't think my opinion of what a fair rate of return is should be used in policy making, but um I do know that a very common formula that is used across California and also in Montgomery County is the um it's called the MNOI formula, which is so basically they base um their calculation of what a fair return is on maintenance net operating income, and I can follow up with more information on that because it gets a little bit wonky, but that is kind of seen as the gold standard in determining um fair return in rent stabilization and rent control policies across the country.

Thank you very much.

Any questions from the uh colleagues that are present consawoman Athea Graves we're gonna get a microphone uh to you and uh for also for committee again.

I remind you that um concept policy is here, Aaron Aaron and Miguel ready on standby.

Thank you.

I think mine is more of a comment.

Um and it's about Massachusetts and how they got rid of the rent stabilization, um because the rents are went down so low, and they said, Oh, if we get rid of this, we'll be able to there'll be a boom in new construction, and they found out that it wasn't a boom in new construction.

I think that's one of the things that they're saying now.

Oh we if it we shouldn't do this because we do this, everybody's gonna up and leave and go back to Massachusetts so that they can build everything there, you know, or whatever.

I remember when people started coming down here to start buying up things.

We all said Boston, but it was people coming in from mass.

That started in the 90s, buying the properties up.

And it probably was because of this this rent stabilization going on up there.

They brought it, they started buying it up the properties down here.

Now you're using the same policies of this fear.

Oh, if you do this and try to stop the rent, you know, with this rent stabilization, all these horrible things are gonna happen.

They won't happen.

And we need to stop doing this fear tactics stuff.

I'm not saying don't buy properties down here.

I'm just saying don't buy all the properties down here.

I'm not saying don't buy the properties down here.

I'm just saying don't raise the prices so high that we can't afford to live in.

So this is a that's my comment.

I I think if you look at this, you can see that what you were saying wasn't true then, and I don't think it will be true now.

That's just my comment.

Thank you very much.

Any further questions?

Consulwoman Harris.

Yeah, because you're young.

Thank you.

Thank you so much.

Uh Tram, I want to thank you for this presentation tonight.

Actually, I came in with quite a bit of questions that you were able to point out.

I have a lot of respect for policy link.

House Lee Link been around a long time.

Um for folks that don't know.

When I worked at DER, I got a quote in policy link, so that's why I'm giving the props.

Just for you, Trim.

But my question is I hear a lot of uh people, a lot of people say this.

Um people that have a voice, say that rent stabilization, and I don't know whether you have any data behind it or whatever, or whether you've heard these certain things, rent stabilization does not serve the people who need it, um, which are people who are not receiving the income that they should receive, but being a definitely need housing and need to be placed and stay in their homes.

Um they say that a lot of times the rent stabilization serves people like governors and students and folks with a lot, a lot of money.

Have you heard that in your field of study?

And have you heard people say stuff like that as you're moving around the content and trying to um understand some of the um backlash of this?

Because I think uh when you hear this, it um it definitely a part a lot of fear that sets in.

It's like people have more money already getting these units, so now we're hearing that these places that we should should be stabilized in could easily be replaced for people who have money.

Uh does that make sense what I just said, or could I clear it up a little bit?

Yes, yes.

Thank you.

Thank you for the question, council member.

Um, thank you for the policy link shout out as well.

Yes, this is something that I hear some of it is rooted in one very specific statistic, which I would um I don't have the exact number, but I can kind of explain the premise and why a lot of myths kind of come from that.

So there's one study that showed that higher income renters save more money from rent stabilization than lower income renters.

And if you think about it, that is technically true, because if I am a renter who can afford $5,000 a month in rent, then the amount of money that I save from rent stabilization is dollar by dollar greater than the amount of money than someone whose rent is a thousand dollars will be saving.

And so that statistic has actually been misconstrued in many ways by saying by by claims that say, you know, wealthier people disproportionately benefit from rent stabilization policies.

And it's because they pay more for rent, and so therefore, because rent is cashed by a percent, the dollar amount that they save technically is greater than the dollar amount that a lower income renter pays.

However, the dollar amount that the lower income renter saves is a much larger proportion of their income because of how cost burdened lower rent lower income renters are.

And so, you know, I think I'd like to demunk that debunk that myth officially by stating that in the literature it is clear that rent stabilization disproportionately benefits people of color and lower income renters because they are due to the many um racist practices in the housing industry in our country, uh people of color are more likely to be renters, more likely to be lower income, therefore more likely to benefit from rent stabilization.

Um I think we also have to think about the power of rent stabilization.

You know, I said that it's unrivaled in speed and scale and cost efficiency.

That is partially due to the fact that it applies to everyone.

You know, you don't have to means test for rent stabilization, like we do for many other housing programs that you know we don't have enough funding to reach all the people who need it.

Um I think about public libraries or our public education system as another example of where you know we don't say kids in rich families shouldn't get access to the library, right?

Um so I think about rent stabilization the same.

Whether you rent or own your home, you need housing stability and some kind of um predictability in your housing costs.

And the fixed interest rate mortgage that was created by the federal government gives that to homeowners like myself.

And rent stabilization is our way of offering that similar type of protection to renters.

And I think that it's universality and the fact that it benefits everyone is actually what makes it strong.

Um but it does disproportionately benefit lower income renters and and people of color.

Thank you very much.

Uh seeing no further question, um any further questions.

Uh Consumer Rollins.

Thank you.

And then after this, uh we're gonna take a recess for a minute.

Okay.

Thank you, Chair.

Uh Trump, uh, I just had a uh, I guess in the weeds wonkier uh question about the uh the frequency rate and approval rate when it comes to landlords come before rent boards in cities that have uh past rent stabilization.

And so I'm wondering if you've looked at data or have access to data to to show that uh how many um units of a uh housing market have actually gone before a rent board uh to um petition uh to uh exceed past the four percent cap.

Uh and so that's uh so one question is about uh the frequency rate of that, and then I'm interested in learning more about when a landlord comes before the board about the approval rate.

Um is it you know have cities collected data on have they approved a landlord's uh petition partially like reimbursed, not reimbursed, but um have um allowed them to get reimbursements or things as a partial reimbursement or a full uh you know uh uh a full approval on uh let's say in province, like they we were allowed to allow landlords to go to 10 percent.

So because I know there's our rent board as it's written would have some discretion in that.

So um uh but uh I wonder if you could speak to that and I'll just before I give you the floor.

I've looked at San Francisco and um which has uh their rent stabilization program has been pretty long standing, as you know, and the research I could find is that they studied uh uh I don't want to give the years, but it's pretty recent, and they they've they found that about 93% of the housing market um did not actually go before the board uh to petition for an increased pest 4%.

And I think there's many conclusions you could come away with.

Um that I arrived to is that that's telling me that for many low landlords the the cap um is sufficient for landlords to to make a reasonable profit and to maintain their properties.

And so I I know I have a tendency to give you a lot, but I'm wondering if you could speak to those uh points.

Yeah, thank you for the question.

This is kind of a tough one to speak to um universally because you know every one of these jurisdictions has a different policy, and while many have rent boards or rent regulating bodies, um they all have different procedures and rules.

So for example, in St.

Paul, there was a self-certification process that I actually found to be quite weak because it's you know self-certifying.

It means landlords would just submit a form, who knows where the form would go, and then they would just automatically get the rent increase that they asked for.

Um so that's a pretty weak rulemaking uh like a weak set of rules for implementation.

And then there are places that have a much more clearly outlined procedure.

So Montgomery County is the report that I have pulled up right now, and I think they have a very clear set of rules and procedures for landlords who seek to um who need uh greater rent increase, or they get they have a fair return application process, they also have a petition process for capital improvements and substantial renovations.

And I think it's you know, very similar to what you said, the volume of applications that they've received for rent increases above the cap is quite low, and I can share those numbers.

Um and that tells me, like you have kind of guessed, that when there are not as many applications, that means that the policy is working well for people.

If we saw a flood of petitions, then you know I think we'd want to look at um what what is the the shared factor across all of these applications.

Um for example, in Montgomery County, the amount of units that are covered by rent stabilization is I want to say sixty five thousand units.

I will confirm that.

Um sorry, I want to get this one right.

I think it's sixty-three thousand units, and in the first year of implementation, received three applications from landlords for fair return rent increases above the cap.

Those were received and approved.

They received three capital improvement petitions.

So those are you know um improvements that are much larger scale than maintenance, for example.

So maybe it's a new water heater, the new roof, things like that.

Um, three of those were received and approved, and they also received one application for a substantial renovation exception, and that one was pending uh during the date of um the report being published.

So, you know, I can't speak to every city's process because every rent board is different, not all of them even published annual reports.

Um the ones that do they can often be hard to find.

I've been trying to hunt all of them down.

Um, but I think in general, right?

The there's sometimes a fear that when you create a procedure, applications will flood in.

And I think what I've seen in the cities that I've looked at through their rent board reports, their annual reports, um, that fear of like the flood of applications that will take up staff capacity also does not come to fruition.

Um if you have a clear process that's outlined and landlords know what is needed and the type of evidence they need and what counts and like the full transparency of of how the decision-making body is approving or denying appeals, then what we find is that landlords who were trying to find a loophole, they look at that list that requires all the receipts and they say, Oh, I actually don't have the evidence to justify this.

And so what you do get is a small number of applications where there is justification, which is why they are generally approved.

Um so again, I can't speak to the procedures as a whole because they're all different, but I will say the level of detail that's in the proposed policy um is strong, and I encourage you all to be very attentive to the rulemaking process if there is another kind of chapter of that to outline in more detail the appeals process.

Welcome back.

Thank you very much.

Again, um great presentation from uh Trump Hong and great questions from the committee members and also our counselors that are present with us.

As we any further questions or any other comments before I make also some comments, and then also open it up for to our colleagues.

Uh thank everyone for the hard work from the policy.

So the sponsor, uh, Council President Miller, and many of you.

Rent stabilization in this bill is not perfect, and we said it from the beginning.

Everyone had the opportunity to speak to us individually.

We had the opportunity to engage one another as colleagues, engage constituents at every level, homeowners, landlords, tenants, having meetings in our in our communities through our ward commit uh community meetings.

And I commend all of you for um taking the time on behalf of our constituents.

And I also wanted to highlight a couple of things, and that is also the leadership of our uh chairwoman uh Mary Kay Harris and the housing task force, and I and I want to I highlight that is because for many years as uh when she was an activist and I was in the Senate, we fought against predatory lending uh along also with Council President Miller, but I also recognize the fact that everything has been outlined here in 2023.

This task was formed, and one of the recommendations was how do we stabilize our families, how do we stabilize our our neighborhoods?

And we just heard from Trump that it's not a perfect bill that has been already president in 2020 cities, whether that is rent stabilization and rent rent control.

But the important thing is also is that it sort of also slows down gentrification to a certain extent.

And the greater benefit and the people that are gonna benefit from this, and I hope that we all see the light in our city, whether it's from the mayor for even from the state, that we need to continue to pour in as much as possible to the housing crisis that we have and the economic crisis that we have, and that is gonna continue.

But uh also to not only councilwoman Harris for chairing the task force, but to say that even the entire almost the entire uh task force that was put together is the support of rent stabilization, and I think that that's notable.

And if you haven't had the opportunity to, as people are hearing us, haven't had the opportunity to read this this report.

I recommend that you continue to read it.

Uh this ordinance is a result of a deliberate and sustained public engagement.

Since introduction on June on January 22nd, there has been an extensive outreach, both in formal council settings and directly in our neighborhoods, ensuring that we've received feedback from residents, advocates, stakeholders from across the city.

There is a broad consensus and on the core issues, regardless of perspective.

There's agreement that providence is in a housing crisis in and inaction is not an option.

We have gotten to this place.

The council has already taken multiple steps to address the housing challenges.

This ordinance builds on a broader legislative strategy, which includes strengthening the housing trust fund to ensure that funds are directed towards affordable projects within the city, allowing accessory dwelling units by right to increase our housing supply, advancing zoning uh reforms to support the increased density consistent with the comprehensive plan.

Because the projection is that Providence and the state of Rhode Island, it's a hot place.

People want to be here.

People have said it, they want to see the population increase, but we know that also we need more housing, and at the end of the day, when I look at our city council and our city, our city is made up of neighborhoods, and the average income in my neighborhood for less than $30,000.

And so I ask all of you, my colleagues, as you the as you're thinking about how do we when you're voting is to think about also, and I know that through your heart in the conversation, you think about your constituents.

At the end of the day, we want to make sure that people have a roof over their head.

And so I conclude to say to all of you is that this ordinance is part of a coordinated policy work, not a standalone action.

I hope and continue to say that even the mayor, even all of us in our city council, whether we disagree on policies, the time has come that we pass rent stabilization today, that we pass rent stabilization for the neighborhoods, for the people, and I urge my colleagues to support it tonight and move it onto the floor.

Thank you very much.

Let's protect our residents.

Thank you, uh Chairman Picardo.

First and foremost, I just want to thank you, um, the clerks, uh our policy team for this uh robust process.

Um this has been the most uh vetted uh uh piece of legislation that has ever uh come out of these chambers.

There has not been uh piece of legislation that has had multiple public hearings in this chamber and multiple uh uh sessions of uh public engagement um out in the community, and and that in a lot that in itself um is something that we need to uh be very uh grateful for and highlight and um want to thank all of our staff, not just our policy team.

I know constituent services uh helped our comms team has done a tremendous amount of work uh to engage our neighbors, and you know that that's why we're here in these positions.

We're here to represent our neighbors uh and all every neighbor, not just uh folks um in our specific wards, but every neighbor across the city uh that includes uh renters, that includes landlords, that includes uh folks that um don't have any housing.

And um with that last uh group of population, that's where I really um you know that that's where a lot of my motivation comes from uh as folks are aware.

I've worked with our unhoused population uh in the past uh couple years, and you know, you see the the reality, uh the consequences of inaction uh of uh legislation uh not helping our uh most needed uh folks.

And um if we're not helping uh the people that needed our help the most, um then what are we doing here as elected officials?

So that's always been my guiding principle is just to give uh people that that need uh help the most um as as much as possible because if if we help people that truly need help the most and and folks have a roof over their heads, something that we should all have uh in in this society.

If we're not doing that as a bare minimum, then then what are we doing?

Um and you know, folks have have shared that we've been very honest and upfront uh since the beginning of this process.

This isn't gonna solve our our housing crisis.

All of us um have said that from the from the beginning.

Uh we have pointed to the work that we've done the past couple years uh when it comes to zoning, when it comes to housing trust bonds.

Um and I've been at the front row, all of us have, uh, but I'll speak specifically for my experience.

I I've been a member of the Providence Redevelopment Agency where where we've seen um a lot of this work uh happen in terms of uh millions of dollars going to affordable housing, um, which is great.

Um in the comprehensive plan I pushed uh to remove uh the the exclusive uh single family zone in my ward.

And you know, obviously uh some neighbors weren't weren't too happy about that, but at the end of the day, it's it's the right thing to do uh to encourage uh development.

Um we've done other practices that as well.

Um, you know, we've supported a lot of work at the state house, uh, you know, give folks in the General Assembly a lot of credit the past couple years, they've been doing a lot in, and we've been very supportive of that work.

Uh but even all that work that that's being done is still not enough.

People that have called Providence home for for decades are being uh displaced at a at a rate that is um destroying the the fabric of the city, our neighborhoods, our communities that have called Providence uh home for for decades.

Um my family came here to Providence in the late 80s, um, you know, had that quote unquote American dream to start a small business, to buy property.

Um I've had family members uh you know own triple deckers and and and the fact that folks uh right now don't don't have that opportunity.

Um it's it's it's a disgrace, honestly.

And that's uh really unfortunate.

Um when when we have the tools uh available to us.

Um I've been as open as as possible in terms of listening to feedback and getting uh people's input.

Um but a lot of the input that's you know being shared with us is is people that are directly uh profiting uh unlimited amounts of money in the uh the this business model that they've carried for for decades.

And you know, coming from a family of small business entrepreneurs, I I I give people a lot of grace, you know, and and I I give people a lot of uh benefit of doubt when when it comes to their business models.

Uh but the reality is that we have constructed uh ordinance that still allows people to raise rents.

Uh what we're doing is limiting how much you can do that over a certain period of time.

Um someone that you know has multiple properties and is able to still raise rent uh by a four percent annual basis is still making money.

Um and the fact that we have uh mechanism and in place in this ordinance that if there's unexpected expenses, um if there's unexpected cost, uh there's they still have the mechanism to petition uh a board of appointed uh civic uh leaders uh to make their case on why maybe they need to raise the rent more.

Um so all that to say is that we have an opportunity here as a legislative body uh to really you know stand up and truly represent uh the people of Providence.

Um I think a lot of people in this chamber, uh of my colleagues at least, you know, are either supportive or or very open to at least engaging in it.

Um what's been really disappointing is folks that you know have shared concerns or have said things that you know that that might assume that you know they they had concerns um haven't really brought like amendments uh to uh this uh ordinance.

Um because at the end of the day, I I want to listen to everyone's ideas um as long as it moves us in in the right direction.

Um so obviously there's a lot of forces out there that you know don't want to see this happen uh because it impacts their unlimited ability to make as much money as possible.

And and I'm sorry, but what is happening right now is what we've seen this winter.

People are literally freezing uh to death in in our city.

And and you don't put a price on on human life.

Um that's why I'm supporting this piece of rent stabilization and I'm committed to uh every other uh proposal that moves us in a direction of having a more affordable uh city for for all.

Thank you, uh Chairman.

Thank you, Classman Miguel Sanchez.

Uh Consulman Roly.

Thank you, Chair.

I have so many thoughts uh circulating in my mind, and I share many uh of the same thoughts that my colleague has just shared.

Um I guess I want to uh just kind of you know, as we're about to take a vote, a neighbor in Ward for who I met several months ago at Dunkadonuts as much of that sounds like a Rhode Island story.

I was meeting with another constituent at that time, and this neighbor approached me, recognized me as the counselor, and uh had actually interrupted my conversation, which I didn't mind, but I could tell she was in uh a mo she was living through a moment of desperation, and she I learned a lot about her, and I obviously I won't uh she will remain nameless here, but um she had explained to me that uh she's she her only source of income was uh living on SSI.

Um and currently she was living in her GMC truck uh for about at that time eight months, and this is through the middle of the winter.

And she in she was living in her truck with her daughter.

And uh this neighbor was uh experiencing uh uh she she had cancer, and so she had a very difficult quality of life.

And she had explained to me when I asked her, you know, what uh what explained her circumstances she had said that her fixed income uh could not absorb the sudden ta uh uh rent increase uh that she had experienced by her landlord.

And it got me thinking about a lot of things, including that unfortunately this city did not pass for stabilization ten years ago.

And um, and she's still living in her car uh at and she purchases gasoline, uh, runs her truck at night and to stay warm.

And the most I could have done for her in that moment is help her create a GoFundMe.

I uh helped her apply for public housing, which she did, but she sits on she sits on a waiting list, thousands ahead of her.

And and so, you know, I wonder as we move in this process, and I've been very public about my stance.

I hope this passes the full the full council, but I just wish we had acted sooner.

Um so I want to share that because as as we're as I'm hearing everyone's thoughts and I'm thinking about that neighbor.

And I uh I want to thank uh the policy staff who worked so hard to craft this.

I want to thank our council leadership.

Um I want to thank the journalists who have covered this.

I want to thank the neighbors who have uh listened thoughtfully and challenged me and pushed back.

Um, but who have I bel I I think respected whether we agree or not, respected why I've arrived to this conclusion.

Um I you know, I also when um I'm also thinking about this theme um of making province.

We often hear it a lot in sort of the um the political ecosystem where politics often you know say we want province to turn into a world-class city, and I've probably said uh some similar thoughts about how I feel about that statement.

And I often when I hear that, I think of um you know public officials public officials wanting to wanting Province to be a city for outsiders when I hear this feeling of wanting to turn this city into a world-class city.

Um and I often find that when you speak to regular folks who have lived in the city for a long time, it's becoming increasingly difficult for them to access the amenities that maybe outsiders um love about province.

Maybe that's a dining on Fed Hill.

Maybe that's buying a ticket to watch the province college basketball game.

As folks become more rent-burdened, those amenities that outsiders enjoy in our own city become increasingly uh uh just simply a uh a dream.

And um, and so I believe that uh rent stabilization will begin to honor if we pass this, begin to honor the the residents that have lived here for a long time, and it sends a strong message that we want you to remain in the city.

Uh we we want your your family to remain in our neighborhoods and to not be displaced because we believe strongly uh that when neighbors um are not displaced, uh that what what we are protecting is the the trust, the relationships we built.

Um and and uh that I think speaks to the fabric of our neighborhoods, and I just believe, yes, this is not gonna solve the housing crisis, uh, but it's gonna it's gonna help uh protect the fabric of our neighborhoods.

Um I shared this in a video today um uh with the help of our our comms, but I I think it's worth mentioning, and I actually speaking to Shelley, I mean Shelley, excuse me, counselor Pearson about this, but even our children who attend our province public schools, uh about 40 uh 400 students currently in PPSD are experiencing homelessness.

And um, you know, there's often sort of this landlord talking point um that uh the reason why folks can't afford their rent is because they've mismanaged their money.

As if buying one less coffee at Dunkin' Donuts is going to keep you housed.

You know, there uh I would imagine that the majority of those 400 families who are experiencing homelessness and provenance, uh are not have not mismanaged their money.

Um and you know, I think about the the children who are impacted by that, who are living in crowded living rooms, potentially shelters, potentially cars.

Um I think about how difficult it is for them to receive their education, that anxiety, that depression, that trauma that they live through.

Um it's difficult for them to feel safe, for them to regulate their emotions, um, for them to be fully immersed in their coursework.

I've heard a lot by the real estate lobby that we should remove emotions from this.

Well, if we put that to aside for a second, which I I disagree with, but let's let's deal with deal in the data.

These are children, these are humans.

When we talk about edge the impact of edge educational outcomes when it comes to housing instability, those are real data points.

And I think there's a social cost to housing instability.

I think there's a social cost to displacement.

And again, I I uh when I when I speak about uh landlords, I'm really talking about the corporate landlords.

Um, and I think they have for a long time privatized the gains and socialize the cost to our city.

And unfortunately, there's not going to be one study to capture uh the social cost that our residents have experienced.

And so I'll end my remarks by just again thanking this committee.

I know we're it's the name is hope, and I will just say it's hard to be hopeful.

Um with everything happening from the federal government and down, I think it's hard to be hopeful these days, but as cliche as this may sound, I am very hopeful in this moment.

And I hope that if uh for colleagues who are on the fence about rent stabilization, I really hope uh that you will come around and um and resist the stubborn forces, uh resist the um the the uh resist the the can't paying contributions um uh because what's at stake right now are those 400 families, uh those 400 children who need us right now.

Um and so um I'll leave it at that.

Um but thank you, Chair, for allowing me to speak.

Thank you very much, uh Councilman Arroyas.

Councilman, councilwoman Shelley Peterson.

Thank you.

Um it's a little difficult to follow up with that.

Uh thank you, Councilman Reyes, for your words and um the conversation previous as we were preparing to come into committee.

Um as with everybody else, I want to make sure that I thank the policy team here.

Um we ask a lot of our policy team on many different fronts, and every single one of us has specific concerns that we bring forward to you, and every single one of you has always been very diligent and uh willing to work with us.

So thank you very much for all of that.

Um it means a lot to me.

Um I've spent a great deal of time listening to testimony on both sides of this ordinance, and um I I want to begin by acknowledging the work that has gone into it.

Um I've spoken with dozens of renters, landlords, and colleagues, and I'm grateful to all of them for sharing their perspectives and those perspectives, they all matter.

The landlord who worked hard to purchase a few properties and build generational wealth for their family is just as important in this conversation as the renter who is struggling to save while barely making ends meet.

This is a thoughtful proposal, and it's rooted in a very real concern about housing stability in our city.

If there's one consistent takeaway from every conversation that I've had is that people are genuinely worried about Providence and about their ability to move forward here.

Especially when they're not grounded in Providence's specific reality.

There are valid concerns about how rent control has played out in other cities, just as there are examples of stabilization policies working in places with similar size and demographics.

The truth is is that we can't really rely solely on the outcomes from elsewhere to guide decisions here at home.

As someone who came into this undecided, I take that responsibility very seriously.

This clown this council has taken meaningful steps to increase housing production.

We've expanded opportunities for development, approved projects intended to meet demand.

Since January 2025, nearly a thousand units have been are actively being built.

But when we actually take a closer look, only a small fraction of those units are single-family homes or homes accommodating families.

Much of the development that we're seeing is not geared towards long-term residents or families.

The reality across our neighborhoods is not the same.

In Elmhurst, the median household income is about 69,300 with a 37% renter occupancy.

In Wanscock, the median drops to roughly 39,400, with 66% of residents renting, and nearly half of each household, half of the households, excuse me, are cost burdened.

Cost burden meaning they have to expend or spend more than 30% of their monthly income just in rent, just to be able to put housing over their heads.

These are not actual abstract numbers.

They are city reported data, and it reflects the very real challenges people are facing right now.

The economic reality today is fundamentally different than it was 20 to 30 years ago.

The idea that a household can rely on a single income, save, and eventually purchase a home is out of reach for many.

This is not a single minimum, there is not, excuse me, a single minimum wage worker in this state who can afford the median rent.

That is not sustainable.

In Ward 14, we face an added challenge with the expansion of student housing.

Increased enrollment continues to put pressure on surrounding neighborhoods, bringing quality of life concerns, traffic, and a strain on housing availability.

Meanwhile, much of the development ties to this demand tied to this demand is not designed for families or long-term residents.

It reinforces a cycle that places the burden on existing neighbors while doing little to stabilize the broader housing market.

This is why I'm introducing two amendments to the ordinance tonight with support of the lead sponsors.

The first says that new construction exemption will not apply to any units within a college student residential overlay district, a clear signal to student housing developers that they need to operate within the needs with the needs of the surrounding neighbors in mind.

The second requires the city each year to request that our colleges and universities submit five-year enrollment projections, which the administration will then compile and share with our council.

This information can be used to inform housing policy, planning, and displacement mitigation efforts.

Alleviating university-driven development pressures and garnering the data necessary to make informed decisions needs to be part of this continued work.

We need to fully understand our rent trends, our vacancy rates, our eviction patterns, and how supply is changing across our neighborhoods.

If we're going to adopt a policy of this scale, it must be informed by the realities of Providence, not projections or comparisons.

Moving this ordinance forward tonight is not the end point for me, it's a step.

And as it moves forward, my continued support will depend on making sure this policy reflects the specific needs of our communities.

That includes better data on student housing impacts and ensuring that corporate-driven development doesn't continue to shape the market in the way that pushes residents out.

At the end of the day, this vote is about whether we are willing to act on the reality in front of us, not the assumptions around us, and take a measured step toward making Providence a city where people can afford to stay.

Thank you.

Thank you, Councilwoman Shelley Peterson.

See no further comment.

Yep.

I will entertain a motion to approve as amended.

As amended, so moved.

As amended, the Providence Rent Civilization Act.

The motion has been moved by Councilwoman Shelley Peterson.

Seconded by Councilman Miguel Luna.

And I mean me.

He's looking down.

Seconded by Miguel Sanchez and Councilman Royce.

Any discussion.

All those in favor?

Aye.

Any abstention?

The A's have it.

The Providence Rent Stabilization Act as amended passes.

Thank you.

We set out and we committed ourselves to an open, deliberate process, spending years listening to residents, engaging with stakeholders, and grounding our work in research.

The result is balanced ordinance.

We are proud to recommend to the full council, one that brings stability to renters by ensuring property owners can continue to maintain and invest in their buildings.

It responds with urgency that matches the scale of the housing crisis with a deep care for everyone affected, both renters and small local landlords.

Rent stabilization interrupts that cycle of speculation and wealth expectation that allows predatory lenders and investors and actors not to buy our communities.

This will move on to the full council, and we will be voting on the Providence Rent Stabilization Act.

Thank you.

There are motion to adjourn.

The motion has been made, second and any discussion.

No discussion.

All those approve?

All those in favor?

Aye.

Motion carries.

Meeting adjourned.

Thank you.