Saint Paul’s Housing Policies Yield Mixed Results

Last week the Minneapolis Federal Reserve published a paper reviewing Saint Paul’s housing/zoning policies over the last few years – and unveiled  its new Saint Paul Housing Dashboard.  Excellent data points.  This city must figure this one out – how to woo back private investors into housing development and turn around the current trajectory of declining rental property tax base.
 
Conclusion: mixed results. 

• 2026 zoning changes allowing for up to four to five units on formerly single-family lots. The outcome of that change will take time to play out, though is a positive opportunity to expand the “missing middle” market.
• 2021 rent stabilization: Saint Paul experienced a major drop in overall housing construction, from its peak of 2000+ units per year in 2020 and 2021, to 404 units in 2024 and 357 units in 2025.  Developers report ongoing and multiple headwinds, with financing being the biggest. 

 
Key takeaways for me: 

1. The city went from a construction boom to a sharp slowdown with the advent of rent stabilization (even with ensuing modifications), and its chilling effect on development continues.
2. The market shifted away from private market-rate development (80%+ pre-rent stabilization) toward subsidized housing (over 40% subsidized after implementation of rent stabilization). 
3. The data shows that after adjusting for inflation, typical rents in Saint Paul are falling. 
4. Higher property taxes/insurance/insurance costs matched with declining property values is a lose-lose economic environment (-36% drop in property value per unit from 2020 to 2025).
5. The city is now adjusting policies to regain balance between affordability and housing supply growth; time will tell. 
6. The city can turn this around. One affordable housing developer said they were “struggling to get a Low-Income Housing Tax Credit investor because syndicators are not interested in Minneapolis and Saint Paul.” This interviewee believes that syndicators, investors who purchase the tax credits, are “turned off by rent control and uncertainty over local governance and policies.” On the other hand, another affordable housing developer said that if the structure and underwriting are right, “[tax credit] investors will come to Saint Paul.”

 
See you in the trenches,
B

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