I got news late Sunday, news that marks the end of an era. George Latimer, Saint Paul’s longest serving mayor, passed away Sunday morning at the age of 89. The Pioneer Press wrote a nice piece on him.  

Take a moment and read the article – you’ll learn something. I sure did. Latimer’s service as Mayor preceded many of us here in Saint Paul; others have deeply treasured memories that extend to your own parents. What I have learned is that he brought innovative thinking coupled with a spirit that deeply cared about people as individuals. People have been telling me stories, about both his great successes (District Energy and the Ordway are but two) and his challenges. Most importantly, in each case people speak about how Latimer cared about people. What I appreciate the most about what I’ve learned about Latimer is his growth mindset. He focused on building up Saint Paul, on thinking bigger than we were, something we need to embrace today as well. We are at another inflection point, and downtown revitalization must remain front and center.

See you in the trenches,

​B

​First off, heads up that we are conducting another round of public safety surveying, August 20–September 6, measuring public perceptions of crime and safety in Saint Paul. If you’d like to participate, click here and opt in to the survey. We will have an analysis done by early October, in time to discuss the results in the context of city budget discussions. We hope you'll opt in and help us gather important data for our advocacy work!
 
Next: Mayor Carter presented his annual budget address today at noon, at the Ordway. His message carried three key themes: public safety (remains a top priority, more investments), housing (capitalizing on new metro wide sales tax to offer more resources); and a rather interesting proposal to consider regarding rent stabilization.
 
Rent control is a lightning rod issue, and I remain convinced this is bad policy. That said, Mayor Carter clearly is trying to make it work. And I applaud his creative thinking. His proposal is to maintain rent control for all rental housing units built before 2004 (which represents about 95% of our building stock).  All rental units built after 2004, then, would be exempt. He clearly is wanting to encourage more development, and this just might work. We still have more people than housing units. New housing permits have dropped precipitously since the adoption of rent stabilization. We continue to add people AND, if we aren’t building enough new units, the housing shortage will get worse. All while Highland Bridge is in flux and The Heights is on the horizon.
 
This is interesting to me. The Mayor is threading a delicate needle because he needs to balance the intent of a rent stabilization ordinance with the need to advance new development. I look forward to knowing more about this, in the hopes of finding a path forward that allows the City Council to exercise its values regarding fair rent increases while ensuring we can increase the housing supply. So stay tuned!
 
 
See you in the trenches,
 
B

Big news this morning with Governor Walz selected as Democratic presidential candidate Kamala Harris’ running mate! She has reached into the Midwest to select a “military veteran and union supporter.” Big news for Minnesota as well, of course, potentially shaping our own gubernatorial future. Stay tuned for more!

As we gear up for the end of summer (and the State Fair!), I also continue to track economic indicators. Prices continue to be uncomfortably high this year so far, likely reinforcing the Fed’s reluctance to cut interest rates anytime soon. But I keep watching. A recent NY Times article indicates that “The Fed Suggested That Rate Cuts Could Come Soon.” Chair Powell has said that a rate cut “could be on the table” at the next meeting. Let’s hope so. We were hoping for the same at the July FOMC meeting, but inflation remains above the 2% objective (according to Morningstar, inflation rate in the U.S. is expected to average 2.4% in 2024). For now, the Fed released a policy statement at the end of July indicating they will continue to hold the federal funds rate in a range of 5.25% - 5.5%, leaving it at its highest level in 23 years.  Of course, the timing of potential rate cuts will be of keen interest in the presidential election!

To my mind, what the Fed calls “somewhat elevated” prices feels, on the ground, to be hugely significant. Just talk to anyone who manages the family’s grocery budget on a monthly basis! And housing inflation is anticipated to remain elevated into 2025 as well.

The delicate balance of monetary policy: should the Fed move too slowly in reducing interest rates, they risk weakening the economy and even pushing the economy into recession. Some markers are indicating that already. Of particular concern is the U.S. ISM Manufacturing PMI (Purchasing Managers Index), an index that measures overall expansion or contraction in the manufacturing sector. Though manufacturing growth was positive through April, it’s been on a gentle but consistent trend downwards ever since. A second concern is the U.S. labor market: it slowed down notably last month and looked weaker than expected, creating just 114K new jobs. That’s down significantly from the average of 215K jobs/month over the past year. The unemployment rate ticked up again as well, to 4.3%. That’s the highest since late 2021. 

Some economists also saying that the Fed has waited too long. JP Morgan economists are anticipating that economic growth will decelerate and consumer spending to slow through 2024, as the effects of monetary policy continue to take a toll. Though all step away from anticipating a “recession,” referring instead to that “soft landing” we’ve been hoping for.

Morning Consult’s latest economics research: How a weaker labor market may impact U.S. consumers
Key Takeaways:

• The labor market remains strong, but is showing clear signs of cooling—including higher unemployment
• While job losses haven’t meaningfully picked up, consumers are reporting more slack in the workplace, suggesting companies may be carrying excess workers
• At the same time labor demand and wage pressures are cooling, consumers are relying more heavily on paychecks to cover rising costs

 
All this to say – much is still up in the air! Breathe thru the stock market corrections on Monday; things will smooth out again very soon. And we’ll keep tracking this and sharing what we learn!
 
See you in the trenches,

B