St. Paul, Minn., Legis. Code § 193A § 193A.07

(a) General. All Landlords shall be entitled to a reasonable return on investment based on the factors in section 193A.06 of this chapter. No provision of this chapter shall be construed as preventing a department determination, legislative hearing officer recommendation, or city council determination, or any final determination, that would grant a landlord a reasonable return on investment.
(1) The department shall establish an RROI application and complaint processes concerning this chapter. Landlords shall be entitled to apply for an exception to the three (3) percent cap by filing an RROI application.
(2) Tenants shall also be entitled to file a complaint contesting a rent increase issued by the landlord, except that no complaint may be made where the rent increase has been approved in a final determination.
(3) The department shall conduct a review of all RROI applications and complaints. The department may meet with landlords to provide technical assistance to complete an application, and the department may also provide technical assistance to tenants seeking to file a complaint.
(4) If the department requests additional information from the landlord related to an RROI application and the landlord does not respond within 60 days, the RROI application shall be considered withdrawn and no further action will be taken by the department.
(5) Upon receipt of a complete RROI application or complaint, the department shall conduct review of the RROI application or complaint and conduct any necessary investigation to determine whether rent conforms to the requirements of this chapter.
(6) Upon conclusion of the review of an RROI application, the department shall issue a department determination.
(7) Upon conclusion of the review of a tenant complaint, the department shall issue a letter to the landlord notifying the landlord of the tenant complaint.
(8) A landlord or tenant may appeal any department determination to the legislative hearing officer.
(9) Upon a final determination, there is no further right to appeal to the legislative hearing officer.
(b) All data collected by the city shall be governed by relevant state, local and federal laws concerning data privacy and disclosure. These laws include, but are not limited to, Minn. Stats. chapter 13, and chapter 94 of the Saint Paul Administrative Code.
(c) Landlord applications. A landlord seeking to increase rent more than three (3) percent must submit an RROI application. The landlord shall have the burden of demonstrating that the rent increase above three (3) percent is necessary for a reasonable return on investment.
(1) As part of an RROI application, the landlord must complete a rent increase exception form and maintenance of net operating income worksheet, except if the landlord is requesting an increase pursuant to section 193A.06 (a)(9)a. The RROI application must include the address and all unit numbers that are the subject of the RROI application for increased rent. If the landlord seeks to increase rent for the entire building, they must provide all rental unit numbers.
(2) Upon receipt of an RROI application, the city shall notify affected tenants of the landlord's application and that the tenant will have the right to appeal upon a department determination.
(3) Reasonable return on investment shall be calculated in a manner to ensure a landlord maintains their operating income in the base year in consideration of changes in the Consumer Price Index. The base year is 2019, subject to the following exceptions:
a. If an RROI application was previously approved for the rental unit(s), the base year shall be the year that was considered as the current year in the prior RROI application.
b. Unless otherwise exempted from the limitation on rent, if a rental unit enters the marketplace for the first time after 2019, the base year shall be the year the unit entered the marketplace.
c. The landlord or tenant demonstrates that the base year had exceptional expenses or exceptional circumstances, as described in section (e) below.
(4) The city shall notify affected tenants of a department determination approving an RROI application in conjunction with notification to the landlord of the approval in the department determination.
(5) The notice shall convey the following information in the city's limited English proficiency languages:
a. That an RROI application for a rent increase was filed with the city;
b. The department determination of the RROI application;
c. That the tenant has a right to appeal the department determination, the timeline for appeal, and the manner of submitting an appeal;
d. That a full translation of the notice will be provided, upon request, from the city;
e. That no rent increase may take effect until a final determination by the city, and that a final determination will not occur until after the tenant has had an opportunity to appeal;
f. Contact information for who the tenant may call for more information.
(d) Tenant complaints. Tenants may submit a complaint concerning a rent increase of more than three (3) percent in the absence of a final determination. Tenant complaints shall consist of a completed city-created complaint form and evidence concerning the complaint.
(e) Landlords or tenants may, as part of their respective RROI application, complaint, or appeal, present evidence to rebut the presumption that the base year net operating income provided a reasonable return. Grounds for rebuttal shall be based on at least one (1) of the following findings:
(1) Exceptional expenses in the base year. The landlord's operating expenses in the base year were unusually high or low in comparison to other years. In such instances, adjustments may be made in calculating operating expenses in order that the base year operating expenses reflect average expenses for the property over a reasonable period of time. The following factors shall be considered in making such a finding:
a. Extraordinary amounts were expended for necessary maintenance and repairs.
b. Maintenance and repair expenditures were exceptionally low so as to cause inadequate maintenance or significant deterioration in the quality of services provided.
c. Other expenses were unreasonably high or low notwithstanding the application of prudent business practices.
(2) Exceptional circumstances in the base year. The gross income during the base year was disproportionately low due to exceptional circumstances. In such instances, adjustments may be made in calculating base year gross rental income consistent with the purposes of this chapter. The following factors shall be considered in making such a finding:
a. The gross income during the base year was lower than it might have been because some residents were charged reduced rent.
b. The gross income during the base year was significantly lower than normal because of the destruction of the premises and/or temporary eviction for construction or repairs.
c. The pattern of rent increases in the years prior to the base year and whether those increases reflected increases in the Consumer Price Index.
d. Other exceptional circumstances.
(f) Department review. The department shall receive, review and process all RROI applications and complaints under this section and shall consider all factors established in section 193A.06 . The department may create and publish rules concerning the implementation of this chapter.
(1) The department shall create a process to receive RROI applications and tenant complaints.
(2) The department shall, upon completion of review of RROI application and complaints, issue a department determination along with all required notifications.
(3) For purposes of RROI applications based on capital improvements, such applications may be made to the department up to one (1) year in advance of the improvements being made. However, rent increases may not take effect until after the improvement is made the rental unit.
(g) Appeal process. The landlord or tenant shall have the right to appeal the department determination.
(1) Any appeals must be filed with the legislative hearing officer within forty-five (45) days of the department's determination.
(2) The legislative hearing officer shall notify the landlord of any appeal filed by a tenant, and any tenant whose rent may increase as a result of an appeal filed by a landlord, in accordance with timelines in Saint Paul Legis. Code Ch. 18.02.
(3) The legislative hearing officer shall have authority to review the RROI application and/or complaint, department determination, appeal documents, and any other records relevant to the appeal. The legislative hearing officer shall commence a public hearing and make a recommendation to council pursuant to chapter 18 of the Code.
(4) In accordance with section 193A.04 of the Code, any rent increase that is the subject of an appeal may not be imposed until final determination.
(h) Retaliation prohibited. In accordance with state law, a residential tenant may not be evicted, nor may the residential tenant's obligations under a lease be increased or the services decreased, if the eviction or increase of obligations or decrease of services is intended as a penalty for the residential tenant's or housing-related neighborhood organization's complaint of a violation. The burden of proving otherwise is on the landlord if the eviction or increase of obligations or decrease of services occurs within ninety (90) days after filing the complaint, unless the court finds that the complaint was not made in good faith. After ninety (90) days the burden of proof is on the residential tenant. Landlords who violate state law concerning this subsection shall be liable to any and all remedies available under state and federal law. To the extent that state law differs from this provision, state law controls.