The latest example comes from Minnesota, where the Twin Cities gifted us with a natural experiment: A referendum in St. Paul imposed a draconian version of rent control—a maximum increase of 3 percent, even for vacant units and new construction—while Minneapolis made it easier to build housing.
The Wall Street Journal just published one story on the results. From 2022 to 2024, rents in capitalist Minneapolis rose just 0.7 percent, compared to 1.8 percent in rent-controlled St. Paul and 3.3 percent nationally.
Multifamily development in St. Paul also collapsed as investors and lenders avoided projects that couldn’t make money. Across the river in Minneapolis, housing permits nearly quadrupled in early 2022.
“Downtown hubs boomed as new apartments came onto the market and attracted young professionals,” the Journal wrote.
The article illustrated the data with real-world examples of people moving to downtown Minneapolis while market-rate projects were canceled in St. Paul.
The Journal story wasn’t perfect, however. It said: “The development boom has not been as good for lower- and middle-income residents, who cannot afford the new housing aimed primarily at the upper middle class.”
But lower earners can can afford the housing that higher income earners will leave as they move into the new buildings. The Minneapolis Fed documented this effect, called filter. The working class certainly benefited as rents in the city rose by just 0.7 percent, despite being almost five times higher nationally.
The Journal cited a curious statistic to support its claim that the new offering has “done less” for lower-income renters: “Eviction filings in Minneapolis were up about 68 percent from the pre-pandemic average between December 2024 and November this year, according to Eviction Lab data. In St. Paul, they were up 61 percent.”
What?
The eviction rate rose by about the same percentage in rent-controlled St. Paul as in free-market Minneapolis. In any case, this indicates that rent control has not slowed evictions and that new construction has not increased them.
Furthermore, expulsion rates are influenced by numerous factors. The Journal made no attempt to demonstrate a cause-and-effect relationship regarding rent control, the supply of new housing, and evictions.
We do know that rent collection fell during the pandemic and never fully recovered. Perhaps the eviction moratoria and “cancel rent” campaigns played a role. Be that as it may, virtually all evictions are the result of non-payment of rent. Evictions in Minneapolis and St. Paul likely increased because more tenants weren’t paying, not because of rent control or the lack thereof.
It’s possible the reporter or her editor was trying to tell the other side of the story. But if there is no other side, you can’t just think of one.
Overall, the article provides a reality check on the silly idea that the way to keep rents low is to make them illegal. Minnesotans quickly realized this: Last spring, two years after its failed experiment with rent control, St. Paul released properties built after 2004.
Then St. Paul and Minneapolis elected new mayors who opposed rent control. The socialist candidate in Minneapolis lost.
I emailed the Journal story to an urban planner I know in Minnesota.
“I hope this creates momentum for the city to continue to overturn the voters’ misguided referendum. I know quite a few people who voted for it when it happened,” she responded. “There was so little information, and to a liberal person it sounded like a good thing. None of those people would vote for it today with a better understanding now that it’s not a tool that works.”
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