ST PAUL, Minn. — Minnesota senior citizens on fixed incomes who are fed up with rent increases are trying once again to get relief from lawmakers. This year, they are backing a proposal that would limit rent hikes in affordable housing units to just below the rate of the annual federal Social Security increase.
Jan Bragelman is one person leading the effort. She and other residents of Dominium-owned senior housing buildings began organizing two years ago after a 12.5 precent rent hike forced some to consider moving out of their apartments. They’ve been fighting for policy changes ever since.
“We don't know if we have the energy to go on," she said, "and yet, we have to.”
She and thousands of other Minnesotans live in affordable senior apartments built by developers who get federal tax credits under the Low Income Housing Tax Credit (LIHTC) program.
In exchange for those tax credits, the developer agrees to keep the apartments affordable for low income residents making 60 percent of the Area Median Income (AMI) or less.
The problem for seniors is that many live on fixed incomes, but because the rent is based on AMI, every time that goes up, so do their monthly payments.
In recent years, rent hikes on these properties in the metro have been as high as 12 percent — far more than the Social Security increases.
“We're paying 70 percent or more of our income for housing alone,” Bragelman said. “That doesn't leave us much money for food, for phone, for electricity. We have medical bills."
She says it’s proof the current system isn’t working as intended.
“We're asking the government to fix a program that's very broke,” she said.
Senator Jim Abeler (R-Anoka) is part of a bi-partisan group of lawmakers who believe a fix is necessary.
Last year, Abeler and his colleagues Sen. John Hoffman (DFL-Champlin) and Rep. Zack Stephenson (DFL-Coon Rapids) failed in the effort to cap rent increases. This year, Abeler is more hopeful something will pass.
In the House, a bill would allow rent to increase only as much as social security increases. In the Senate, there is a proposal for the state to study the issue and come back with recommendations.
“It'd be nice if we could get the relief for these seniors,” Abeler said.
But there is strong opposition from developers and from some lawmakers, who fear greater rent restrictions will discourage badly needed housing development. Democratic Senator Ann Rest of New Hope called the rent restrictions “an unreasonable reaction.”
“Extreme rent control is not a solution,” said Sen. Eric Lucero (R-Saint Michael).
Dominium, one of the largest developers of LIHTC properties in the country, also opposes the efforts, which it elaborated on in a written statement obtained by KARE 11.
It read:
“Rent increases on senior affordable housing is already limited by the federal government. Additional rent controls don’t work as intended, as Minnesotans have recently seen in St. Paul. The economics of affordable housing are extremely challenging, not only for renters, but for providers, too, with rising costs for insurance, utilities, security and more.
"Rent control would have the net effect of diminishing the availability and quality of affordable housing for seniors. That’s why we have joined other housing providers, labor unions and concerned citizens in opposing this legislation. A better solution is targeted rental assistance for low-income seniors, which matches support with need.”
In response to arguments calling the proposals "extreme rent control," Abeler retorted, “Hogwash.”
“It's not extreme at all – it's reasonable. And when you accept that kind of federal and state help you should be actually kind to the people that we were hoping you'd be kind to. To provide affordable housing," he said.
For seniors living in these affordable, low-income apartments, a lot is riding on what happens in St. Paul.
“We’re not asking for rent money. We're asking just to be able to live on the money we're getting from Social Security,” said Bragelman.
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