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Lawmakers consider bill to cap rent hikes on low-income seniors

Residents of apartments owned by Minnesota-based Dominium properties rallied at the Capitol after their rents went up nearly 13 percent.

ST PAUL, Minn — Senior citizens rallied at the Capitol Tuesday warning that if caps on rent hikes aren’t enacted, many could find themselves homeless.

The demonstration was in support of a bipartisan bill that would limit rent increases in properties that accept certain state tax benefits to 5% per year. 

That bill is partly in response to large rent increases - as high as 12.5 percent - at Dominium properties in 2022.  The company, which claims to be the fourth largest developer of affordable housing in the country, owns several properties in Minnesota which are advertised for low-income seniors. Many of those properties are partially financed using federal and local tax credits and residents need to meet strict income limits to live there.

Jean Flores told the gathered crowd of seniors and lawmakers that she now worries she and the granddaughter she is raising will find themselves without a roof over their heads.

The rent increase at her building - Legends of Spring Lake Park - added up to an extra $167 per month. Flores says on her fixed income that amount means a lot. 

“Do I have a place to live? Do I take my medications or do I not take my medications?  What meals do I skip?,” she aksed.  Other seniors gathered in the Capitol rotunda said they are forced to ask and answer the same questions.

They fear another rent hike will force them out.  “I’m so stressed about if they raise the rent again,” said Jean.  “What are we going to do?”

Dominium is acting within the law. Federal tax credit rules allow them to raise the rent if the area median income (known as AMI) rises. Last year AMI in the Twin Cities rose 12.5%, and Dominium chose to impose the maximum increase.

“It's income limited but then to raise the rent the max they can - almost 13 percent last year - with people who can barely make ends meet already is unconscionable,” said Sen. Jim Abeler, R-Anoka, who addressed the crowd.

Abler joined Senator John Hoffman, DFL-Champlin in sponsoring a bill that would cap rent increases on properties that serve low-income communities and accept certain tax benefits.

Rep. Zack Stephenson has a similar bill in the House.

“It’s our greatest generation that is now hurting because of this so yes – something needs to get done this year,” said Hoffman who is optimistic his bill will pass in the Senate.

He and Abeler say the bill is targeted not to punish developers, but to ensure companies like Dominium don’t raise rents beyond tenants’ ability to pay.

“If you're going to take those state dollars in the form of a tax break then there should be some accountability there as well,” said Stephenson.

Dominium shared a statement with KARE 11 saying the company opposes the bill, arguing it would decrease the ability to build affordable housing.  

“Dominium recognizes residents across the state are concerned about rising housing costs. We agree that the lack of enough homes for Minnesotans, especially affordable homes for people with modest incomes is a challenge. Inflation, driven in part by a housing shortage, is causing rents to increase beyond some household budgets, even for residents living in already rent-capped apartments like those Dominium manages.”

The developer says it supports other proposals at the legislature that would increase rental assistance to fill the gap between capped rents and what residents can afford, and supports more money for infrastructure bonds to encourage new housing.

For current residents, the fear is that nothing will change before the next AMI increase comes out and rent goes up again. Most rely on minimal retirement savings and social security.

“We have all worked our entire lives,” Flores said of herself and her fellow tenants. “They have contributed their entire lives. And for what?”


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