​Networking is about building and maintaining relationships with others, and it’s an important part of professional life. These connections provide invaluable opportunities to exchange information, get advice, learn something new. But it’s not always easy.
 
As we continue to reconnect this year, many of you have been talking about the challenging transition back into the in-person networking environment.  Some of you are naturals; you didn’t skip a beat. In fact, you are SO GLAD to be back together! Others of you are slower to re-engage, partly due to the anxiety of the whole networking “thing.” Walking into a big room, needing to make a few new connections….. some of you tell me that you leave early or don’t even attend events at all! I get it. I’m in this second group and groups of new people are always challenging for me.  So I thought I’d share what I do to make it through networking events – and even enjoy them!
 
“Feel the fear and do it anyway!”

• Find your person. When I first get into the space, I step to the side and scope out the room.  Maybe I walk through a bit, see if I know anyone.  As I move through the room, I’m looking for the one person who looks as uncomfortable as I’m feeling. And that’s the person I introduce myself to.
• Seek to learn something.  Once I introduce myself, I actually want to know this person. My eyes don’t wander over the shoulder looking for someone else I’ve “simply got to meet.”  I focus my attention on the person in front of me.  Without fail, I learn something really interesting in these new conversations. Quick tip:  when talking to a businessperson, the easiest ice breaker is, “how is your business this year?”
• Make another introduction. If you see a friend pass by, stop him/her and introduce them to your new friend. If you’ve found someone who’s even more uncomfortable than you are, he/she will really appreciate another introduction!
• When it’s time, move on. If you need to move on, do so gracefully (or bring your new friend with you).  “It’s been a pleasure to meet you and I hope to see you again.”

 
This is what I do. I try to remember that other people struggle with this as well, so they’ll be patient with me if I’m clumsy.  And I also remind myself – really connecting with ONE person at an event is worth far more than a series of “grips and grins” that don’t add value to either of you. So I hope to see you sometime soon – and, please, introduce yourself. I’d love to meet you!
 
Oh, and one more note: Cat Video Festival 2022 is returning to CHS Field.  Not-to-miss event!
 
See you in the trenches.
B

​Regional

• St. Paul City Council to review ballot question funding low-income day care, pre-K on July 27.  The St. Paul City Council will consider a potential special election question that could be added to the Nov. 8 ballot asking voters whether to create a dedicated fund to back pre-kindergarten and home day care services for low-income 3- and 4-year-olds.

 
Election season is ramping up. Be sure to reference our East Metro Voter Guide to learn more about your candidates!
 
Subscribe to our Chamber Advocacy Update to keep up with advocacy news.

Last week St. Paul’s City Council held a public hearing on rent control, to receive both the rent control task force recommendations and public comment. I testified to our ongoing and deep concerns about the initiative in that it will actually slow down or even stop both new development of housing and investment in current properties. The issue remains divisive, though there is strong support across the community for the need for more affordable housing.  The challenge continues: how to do that?
 
The taskforce submitted its recommendations, most notably the 15-year exemption for new construction. The 3% annual cap remains unchanged, and other recommendations like vacancy decontrol were not well-clarified. The full report is available online.
 
My thoughts: As you know, the Chamber has been an outspoken opponent to the rent control ordinance.  I remain convinced that rent control will hurt the people it’s intended to help, and will halt more investment. I’ve written about it in former blog posts. I also recommend you read again Bill Lindeke’s blog post on its impact on property taxes – which, as we know, translates directly back to costs of housing.
 
Our ask of the City Council:

• 30-year exemption on new construction (to facilitate financing and mitigate risk);
• Clear vacancy decontrol allowance; and
• Annual cap that takes property taxes and inflation into consideration

 
Lindeke said it best in his Twin City Sidewalks posting, “Why the 3% cap stops new housing construction.” Here is an extended passage from his article:
 
Whether or not it’s possible [for landlords] to make money with a 3% rent cap in place is irrelevant.  It’s about the financing . . . It’s also not really about whether developers make money. . .  Ask anyone who does economic development, and they’ll tell you that developers have trouble getting financing for new housing in Saint Paul as it is.  It will become impossible to get loans to build when the city has become three times as risky as anywhere else in the country.  The people who finance construction have plenty of choices about where to [finance] build[ings].  When it comes to building new housing, St. Paul will basically be redlining itself.  
 
The last several years have seen unprecedented rental housing development in St. Paul.  New construction and renovated buildings – with both market rate and affordable rents – can be seen throughout the downtown and the west side river flats, along the University Avenue light rail corridor, on Snelling Avenue south of I-94, and now coming to Highland Bridge.  This list does not even include the Sears site or the former Hillcrest golf course.   Alarmingly, the rent control initiative is placing all these projects at risk.
 
The math is straightforward. This year alone is a striking example of how this ordinance must be improved to take inflation into account. Three factors are immediately before us:

1. According to the Mortenson Cost Index, construction costs rose 18.2% between Q1 2021 and Q1 2022 in Minneapolis. Those rising costs are being experienced across the construction market here and nationally.
2. The U.S. inflation rate, as of June 2022, is at 8.8%, the highest since December of 1981 – and even ahead of market forecasts. 
3. ​The City of Saint Paul is facing real budgetary challenges due to the recent lawsuit regarding how we handle street work assessments.  That alone represents a $15 million budget gap. There is significant possibility that a portion of that gap will be made up through increased property taxes.

 
The evidence:

• A recent Wall Street Journal editorial talks about St. Paul’s rent control backfire. Of special note: “Multifamily building permits in St. Paul have plummeted nearly 82% between November 2021 and January 2022, compared with the same period a year prior, according to data from the U.S. Department of Housing and Urban Development.”  If we account for anomalies of pandemic “rebound,” permitting is still down 55%.
• The National Bureau of Economic Research recently published a working paper on “The Redistribution of Wealth Caused by Rent Control.” In running economic projections, they found that “to the extent that rent control is intended to transfer wealth from high-income to low-income households, the realized impact of the law was the opposite of its intention.”  
• I’ve spoken with several renters in St. Paul:  non-rental fees are increasing, security is being reduced… real-life examples of how property owners will be forced to cut costs to meet mortgage payments, driving down the quality experience of existing housing.
• In previous issues of this blog, I’ve referenced several examples rental properties that were sold in the last year to out-of-state investors. In advance of rent control? For you to decide…

 
I’m not speaking in hyperbole here: rent control has caused property values to fall by 6-7% already, permits are down by 55%+, costs are up 18%+, inflation is at 8.8%, some existing property owners are selling, and future investors are moving on to more welcoming markets.
 
This impossible burden is weighing on the hearts and minds of good people who hear the very real testimony of people needing stable housing and who fear the problems will only get worse.

See you in the trenches.
B ​

Regional

• St. Paul’s rent control task force recommends 15-year exemptions for new construction. The task force submitted its wide-ranging recommendations to the mayor’s office in June, and the final report calls for maintaining the existing 3 percent cap on annual rent increases while adding a 15-year exemption for new construction. Beyond that, other recommendations are more general than some members would have liked (for example, vacancy decontrol remains unclear). 
  
  • Here is a recent Wall Street Journal opinion piece on St. Paul’s rent-control backfire: building permits are falling, and so will the supply of affordable housing.
    
  • Here is a working paper from the National Bureau of Economic Research, estimating the effects of St. Paul’s rent control on the value of real estate in St. Paul – and on the transfer of wealth across income groups.
• St. Paul City Council considers pre-K, childcare ballot proposal. This after an insufficient # of signatures were collected to push the issue through. The cost — $2.6 million in the first year, $5.2 million in the second year, $7.8 million in the third year and so on — would increase St. Paul property taxes $2.6 million each year for 10 years, at which point voters would be asked on the ballot to reauthorize the program. Here are the details.

 
Election season is ramping up. Be sure to reference our East Metro Voter Guide to learn more about your candidates!
 
Subscribe to our Chamber Advocacy Update to keep up with advocacy news.

It’s been a couple weeks since my last blog. I’ve missed you!
 
Our team is growing, and the beautiful new faces have given me pause to reflect on how best to engage them – and our entire team. Maybe you’re in a similar spot? The next generation of leaders is here, among us; how are we helping them plug in? I’ve been thinking about this whole idea of “passing the torch,” training up leaders and investing in their future. To add to the challenge, most of us are in some kind of hybrid work environment, making natural connections harder to develop. As a Chamber we’re actively wrestling with this, working hard to ensure our programming and resources provide what you and your team members need to build a strong future.
 
We’ve got free networking “Chamber Connect” events, to bring you all together.  Our Young Professionals events are intended to stretch across the East Metro. We’re investing in a Career Connect Day on October 18 to reach into the high schools with your career opportunities; more on that soon. And there’s even more: we want to be a resource for both career and personal development. Consider our equity leadership series, business education training, and recognition celebrations like our upcoming Foundation Luncheon (on July 19). We exist because of and for you; please let us know what else you may need to best serve your team members.
 
The Minneapolis Fed also is seeking your input: they are partnering across the Ninth District to get your insights and feedback on current business conditions. Please take this 5-minute survey to help Minneapolis Fed President
​Neel Kashkari and other leaders assess real-time business conditions in the region. Results will be shared with you once the survey is closed. All responses are anonymous. 
 
And one final note: in case you’d like to watch an interview I was a part of, on “Paving the way for equitable growth and strengthening economic competitiveness”!
 
See you in the trenches.
B​

​Federal

• Build Back Better: Optimism is growing that Senate Democrats could try again to pass President Biden’s Build Back Better plan. While environmental advocates expect the previous $1.75 trillion proposal to be significantly scaled back, hundreds of billions of dollars in climate funding could still be headed to states and local governments. 
• Senate Democrats are reportedly set to pitch a proposal to the Senate parliamentarian in the coming days to increase taxes on people earning more than $400,000 a year to generate $203 billion to extend the solvency of Medicare by three years, marking another step in an election-year bid to resurrect pieces of Biden's stalled domestic agenda (The Associated Press).

Regional

• St. Paul’s rent-control taskforce recommends 15-year exemptions for new construction. Also included in the final report is recommendation for maintaining the existing 3% cap on annual rent increases.
• St. Paul faces down $15 million budget gap. A recent courtruling related to street maintenance means the city no longer can assess property owners for work.
• St. Paul City Council member Dai Thao resigns, to take new position in FL. The city council will review applications and appoint an interim council member to complete the remainder of his term through 2023. A call for applications will soon be announced.
• Ramsey County is set to receive $6 million from state to address homelessness. Looks to secure 100-200 beds for this fall.

 
Election season is ramping up. Be sure to reference our East Metro Voter Guide to learn more about your candidates!
 
Subscribe to our Chamber Advocacy Update to keep up with advocacy news.