ST. PAUL / SACRAMENTO / DENVER — May 7 2025

Hotspot 2025 flashpoint Direction
St. Paul, MN Council to vote this month on permanent exemption for post‑2005 builds; permits already ‑80 % since cap passed. Likely loosen
California Voters rejected Prop 33 (61 % No), preserving Costa‑Hawkins limits on local rent control. Caps stalled
Minneapolis Charter‑authorized framework still stalled; staff reports warn caps could cut new supply 30 %. On ice
Colorado State p15 to let cities cap rents keeps resurfacing; 2025 version died in committee. No caps (for now)

Why it matters

  • Developers cite “policy risk” premiums of 50–150 bps on pro‑forma cap rates in rent‑control zones.
  • Tenant advocates are pivoting to algorithm‑ban bills (e.g., CO HB 25‑1004) after statewide defeats.
  • Expect court challenges: landlords in St. Paul argue the rollback violates promise clauses; renter groups plan equal‑protection suits if exemptions pass.

For renters & investors
Track exemption carve‑outs closely: a unit built after 2025 in St. Paul could see 8 % + CPI hikes annually versus 3 % for older stock—huge valuation swing in underwriting.