Capitol Notebook: Lawmakers advance bill allowing Iowa cities to cap rent costs

DES MOINES — A panel of Iowa House lawmakers gave lukewarm approval Monday to legislation that would allow cities and counties to cap rent costs.

Iowa law prohibits a county or city from adopting or enforcing a rent control or rent stabilization ordinance. House File 2221 would remove the prohibition, giving cities and counties the option to adopt ordinances that would put a cap on residential rent increases.

Representatives with the Home Builders Association of Iowa, Greater Iowa Apartment Association, Iowa Association of Realtors and Iowa Manufactured Housing Association were adamantly opposed to the bill. Lobbyists for the group said a rent control ordinance, also known as rent stabilization, prevents them from adjusting prices amid changing circumstances and market conditions and substantially diminishes the value of their properties.

They said such measures also fail to take into account inflation, increased property taxes and higher insurance that are driving housing prices higher.

Opponents to the bill argued local rent control measures actually decrease affordability — artificially suppressing housing costs in one community while pushing rents higher in surrounding jurisdictions as landlords try to break even, and lead to the decay of buildings as owners have less to spend on maintenance and improvements.

They pointed to St. Paul, Minn., where voters in 2021 passed a rent control measure with a 53 percent majority. The ordinance limits residential rent increases to no more than 3 percent in a 12-month period, with exceptions. Landlords can request an exception to get a “reasonable return” on their investments. Landlords must fill out a self-certification form to increase rent up to 8 percent, and they can increase rent up to 15 percent with city approval.

Opponents argue the ordinance discouraged apartment construction and caused lenders to back out of financing deals, noting permits for multifamily buildings dropped 80 percent.

Supporters said the bill provides local communities the option to enact rent stabilization ordinances to address a shortage of affordable rental housing impacting Iowans young and old, including seniors.

A three-member subcommittee voted 2-0 to recommend passage and advanced the bill to the full House Local Government Committee for consideration. Rep. Jane Bloomingdale, R-Northwood, declined to sign the bill, echoing concerns raised by trade and industry groups.

Rep. Tom Determann, R-Camanche, a co-sponsor with Rep. Heather Matson, D-Ankeny, waffled on whether to send the bill to the full committee with or without a recommendation. Determann said the bill gives local governments an option to ensure housing is affordable and is “a conversation that needs to take place.”

Democrats question Koch acquisition of fertilizer plant

Iowa House Democrats sent a letter Monday to regulators asking them to take a closer look at the impacts of Koch Industries announced $3.6 billion purchase of Iowa Fertilizer Co., one of the world’s largest modern fertilizer companies, amid surging profits for the industry.

OCI Global, the parent company for the plant located in Southeast Iowa, announced the sale in December to Koch Ag & Energy Solutions, saying the transaction will reduce debt for OCI, make money for shareholders and allow future investment for the multinational firm. The sale is pending U.S. antitrust approval.

Rep. J.D. Scholten, D-Sioux City, and the rest of his caucus are asking regulators to investigate the impact consolidation could have on fertilizer prices.

Koch Ag & Energy, part of Koch Industries, is a holding company for Koch Fertilizer and several other subsidiaries. Koch Fertilizer already has eight production and trade sites in Iowa.

Four companies control 75 percent of the nitrogen fertilizer market in the United States, Scholten said.

“Ask any row crop farmer and fertilizer is one of the number one costs they’ll bring up as an issue,” he said. “This issue is not new and this is what Gov. (Terry) Branstad did when he gave to tax breaks to the Iowa Fertilizer Company over 10 years ago to create competition in the market.”

When Iowa signed a deal with Orascom, which changed its name to OCI Global, in 2012 to build the Wever plant, farm groups predicted having a large supplier in state would reduce fertilizer costs for Iowa farmers.

Rep. Megan Srinivas, D-Des Moines, said Iowans helped finance the more than $500 million in local, state and federal incentives to bring the plant online in 2017, and deserve answers about the future of the plant and its over 260 employees.

Rep. Elinor Levin, D-Iowa City, said state officials need to ensure Koch meets the terms for those incentives.

House Democrats outlined their concerns in a letter addressed to the Federal Trade Commission, the U.S. Department of Justice’s Antitrust Division and Iowa Attorney General Brenna Bird.

Koch Industries, based in Wichita, Kan., is one of the largest privately-owned companies in the world. It was founded by Fred Koch, father of brothers Charles and David Koch, who founded the right-leaning political group Americans for Prosperity.

Iowa to receive $2.5M as part of opioid settlement

A French advertising company that promoted sales of OxyContin has agreed to pay Iowa more than $2.5 million to address the opioid crisis.

Publicis, part of a French multinational advertising and public relations company, has agreed to pay $350 million overall in a nationwide settlement.

Iowa joined a bipartisan coalition of 53 attorneys general as part of a lawsuit accusing the marketing agency of downplaying the risks and addictive nature of OxyContin and other opioids.

“For Publicis to perpetuate the opioid by crisis by downplaying the risks of addictive drugs is flat wrong,” Iowa Attorney General Brenna Bird said in a statement. “This settlement holds Publicis accountable and secures critical funding for opioid treatment, recovery, and prevention efforts to save lives across Iowa.”

Publicis worked with Purdue Pharma from 2010 and 2019, and state prosecutors accused the firm of contacting doctors who had the highest volume of OxyContin prescriptions and encouraging them to increase the dosages for patients.

A statement from the company said the settlement is not an admission of wrongdoing. The marketing firm has agreed to give state prosecutors internal documents showing how it marketed opioids.

Gazette-Lee Des Moines Bureau