Rhode Island

St. Paul Ran Providence’s Rent-Cap Experiment—Builders Left, Politicians Backtracked

Virtue Forge briefing · Based on Reason / Stossel reporting (Sept. 2, 2026) and HUD/permit coverage of St. Paul’s rent-control aftermath; Providence context from the Sept. 2026 primary

What happened

In November 2021, St. Paul, Minnesota voters imposed a strict rent-stabilization regime—initially capping most annual rent increases at about 3% with no inflation allowance. Activists sold the ordinance as a curb on “unfair profiteering.” Builders treated it as a signal that City Hall would punish returns on new apartments.

They left. Twin City Minneapolis, which voted on rent control but did not impose the same strict regime, kept attracting construction. Early HUD/Census-based comparisons after St. Paul’s ordinance passed showed multifamily building permits collapsing—on the order of roughly 80% in some post-passage windows versus the prior year (MinnPost and Center of the American Experiment, citing HUD data). In a Sept. 2, 2026 Reason update, John Stossel cites about a 60% permit decline while pressing Minneapolis socialist councilmember Aisha Chughtai on the results. Four years on, Stossel reports St. Paul rolled most of the strict rent control back after new construction cratered; Minneapolis’s mayor pledges not to impose it.

Rhode Island relevance: On Sept. 9, 2026, Providence Democratic primary voters backed DSA-aligned State Rep. David Morales over Mayor Brett Smiley after Smiley vetoed a city ordinance capping many annual rent hikes at 4%. Reason’s Christian Britschgi (Sept. 11) notes Smiley cited St. Paul as a cautionary tale on the campaign trail. Voters chose the price-control candidate anyway. Virtue Forge covered that primary mandate separately; this briefing is the empirical preview Providence is ignoring.

Virtue Forge commentary

Price caps don’t build homes. They centralize housing power in City Hall, punish capital that would expand supply, and then blame “greedy landlords” for the shortage politics created. St. Paul’s experiment is not a mystery novel—it is a controlled comparison with Minneapolis next door. One city throttled returns; builders walked; politicians later walked back the ordinance.

Bias / fact check: Stossel’s “60%” figure is his video claim, not a single official St. Paul year-end statistic. Early post-passage HUD windows showed even steeper multifamily permit drops (~80%+). Later permit years also reflect high interest rates and regional conditions—rent control is a major incentive shock, not the sole cause of every later number. St. Paul later amended the ordinance (including new-construction exemptions) and rolled back much of the original strict regime after construction collapsed; say that plainly. National progressive coverage of Morales’s win frames rent caps as “housing justice” and underplays the supply tradeoff St. Paul already demonstrated.

Humble, competent governance expands the housing stock—faster permits, zoning that lets builders compete, rules that invite capital. Free enterprise and American cities grow when investors can earn a return. Cap that return by political fiat and you get fewer homes, worse maintenance, and a political class that doubles down on scarcity theater.

Providence just voted to import a policy St. Paul already tried and partly abandoned. That is not virtue. It is willful blindness dressed up as compassion.

Original reporting

Read the underlying articles:

Reason / John Stossel — How St. Paul’s rent control experiment backfired spectacularly (Sept. 2, 2026)

Reason / Christian Britschgi — DSA challenger unseats Providence mayor who’d vetoed rent control (Sept. 11, 2026)

MinnPost — Early St. Paul multifamily permit collapse after rent control (March 2022)