renews June 30th. The fire happened July 8. So, it has nothing to do with the fire, it
has to do with the insurance industry not wanting to deal with multi-family units and
losses throughout the Country. The fire has not caused an increase. There was never a
discussion or requirement to update the fire suppression systems. As we rebuild that
other building, which isn’t part of this property, obviously as that is rebuilt it will be
brought up to code to current guidelines. There was no decision to take a risk or forgo
Moermond: Mr. Cresap, your argument was those improvements should have been
made to the building in order to prevent the fire, and the lack of those improvements
lead to the increase in the insurance rate and that was increasing your rent.
Cresap: any contractor that stays in business would look at those wall panels and
recommend replacing with drywall because they are a fire hazard.
Moermond: where I’m at with the building’s construction is that for all buildings in St.
Paul, whether built in 1850, 1950 or 2023 they needed to have built to code at time of
construction. There are very few items that have to be updated regardless.
Cresap: smoke detectors.
Moermond: right, gas shut off valves. A few things, not many. I hear you saying this is
best practice for current construction, which won’t get an argument from me. But I can
look at a building in 1870 and know there wasn’t a handrail requirement for the stairs,
just a requirement a wall be on one side. People have typically retrofitted in railings.
Retrofitting with current construction materials isn’t something the City can enforce.
Cresap: I understand, it isn’t about enforcement.
Moermond: I know you do; I want the whole story on the record. That being said, when
I looked at the numbers in the expense worksheet what I noticed is that I thought
repairs had really jumped. The cost of doing repairs had really jumped. Taxes have
jumped. The taxes are consistent with what I’ve seen on other properties. I have seen a
leveling between 2022 and 2023. But the last full year of data was 2022. The
Consumer Price Index (CPI) was very high. The CPI alone has been the driving factor
for documenting standard rent increases.
Moermond: taking nothing else into account besides CPI it is a tremendous increase.
What it does with the Rent Stabilization Ordinance is that the 3% the general
population voted for on the ballot measure, that 3%--because we have to take into
reasonable rate of return for a landlord—that 3% becomes almost meaningless if that
is the CPI. 3% was what the world had been experiencing at the point of the ballot
measure. It was voted on and then the pandemic happened and everything took off.
And I look at people in your circumstance and don’t even know what to tell you
because the numbers have gone through the roof, they just have. What also strikes
me is the increase in utility costs people are experiencing.
Cresap: my bill, I usually have a computer, energy inefficient appliances—which
makes a huge difference in the energy bill—a coil electric stove is 3x the cost than an
induction stove. With my two appliances and TV and computer my bill is between 40
and 50$ the first year. We have wall-mounted AC. Last August my bill went to nearly
Moermond: when I was speaking towards utilities, gas, electric actually went slightly
down, water went way up, sewer up, garbage and recycling almost doubled. Those are
all utilities that serve the site. Through your profession you understand the massive