For the first time since 2011, when three Winona residents filed a lawsuit against the City of Winona over the controversial 30 percent rule, a request will come before the city council for a permit to rent a property in a rental-saturated neighborhood.
Frank G. Baures submitted an application to the city earlier this monthg to rent out his parents’ home in the 460 block of Center Street, a neighborhood that is already 69 percent rentals. Winona City Inspector Steve Carson explained that the home, formerly occupied by Baures’ parents, is currently on the market, but the owner is having a difficult time selling it.
“It’s [Baures’] parents’ home and evidently they are in an assisted living facility and need to get rid of the house,” Carson said.
Under current city rule language, homeowners cannot obtain a rental license if more than 30 percent of the dwellings on the block are already licensed. However, one exception to the rule was renewed in April 2012, allowing the homeowner to secure a temporary rental license as long as the home is both for sale and complies with rental housing standards.
Since the exception is granted on a 12-month basis and has been renewed several times, it doesn’t necessarily give homeowners assurance that the upgrades they must make to get the home rental-ready, such as installing egress windows, would be worth the investment.
While the Baures home is currently for sale and compliant with regulations under the exception language, Winona City Planner Mark Moeller said it still will be difficult to get the application approved. “We’ve had four or five requests come to the city in the past but none have been approved,” he said.
The Winona City Board of Adjustment will hear the Baures case Tuesday night. If the board approves the request, and if neighboring residents opposed the decision, a 10-day appeal period would begin. Moeller said if the request is approved, it could set in motion a filing of more variance requests by other homeowners in similar situations. However, if the variance request is denied, Baures can file an appeal to the City Council, in which case the petition would go before the council for final say.
“Either way, I’m fairly certain the final decision will ultimately be up to the council,” Moeller said.
The public hearing regarding the variance request is Tuesday, November 20, at 5 p.m. in Council Chambers at City Hall.
In October 2011, four Winona citizens stepped forward to challenge the controversial 30 percent rule on the basis that it infringes on their rights as property owners. Winona homeowners Ethan Dean, Holly Richard, and Ted and Lauren Dzierzbicki claimed the rule violates the Minnesota Constitution and unfairly offers rental rights to only certain property owners, depending solely on whether their neighbors have permits.
Since the suit was filed more than a year ago, the attorney for the property owners, Anthony B. Sanders of the Institute for Justice Minnesota Chapter, has been gathering evidence on behalf of his clients, and is ready for court in late January.
“I can say that what we have found in the evidence that we have gathered confirms our claims that this law unfairly affects our clients and doesn’t help others in the neighborhood,” Sanders said. “We continue on with the message that the city is playing musical chairs with everyone’s property rights.”
Shortly after the lawsuit was filed, petitioner Holly Richard secured a permanent rental license for her home. According to Sanders, evidence of an outdated rental map was found during the investigation process of the case.
“She was actually eligible for a rental license because another license on the block had expired in March 2008 and was never renewed,” Sanders explained. “The city never updated the rental map. We discovered this lapse and when Holly contacted the city, they said she was right and granted her a license.”
Even though Richard was able to obtain a rental license, she is continuing on with the suit “because it’s the principle of the thing that matters,” Sanders said, and she had still incurred the cost of lost tenants, and an expensive citation. “She is renting the home to a couple of college professors and is very happy she can rent it out. But, she is still outraged at the prior treatment.”
Ethan Dean, on active duty in the military, sought a rental license because he was away for months at a time on tours in the Middle East. Dean took advantage of the 30 percent rule exception, and even though it was renewed, he doesn’t have a secure grasp on the license, as the exception expires in April 2013. Ted and Lauren Dzierzbicki bought a home for their daughter while she attended Winona State University. The couple paid $40,000 to fix up the home, but after their daughter finished college, they were left with a home they couldn’t sell or rent.
Another discovery made during Sanders’ investigation of the case was what he calls a “jarring loophole.” Under the 30 percent rule, rental license holders aren’t prohibited from expanding their license to other units in an already 30 percent rental neighborhood, which adds even more renters in an area that may meet or exceed the rule.
“Say for example we’re dealing with a duplex,” Sanders queried. “The owner lives in the duplex and rents out the other unit. He is only licensed for one unit. But, under the 30 percent rule, he can move out of the duplex, expand the license to the now unoccupied unit and have additional renters move in, even though the block is above 30 percent.”
At the same time, Sanders further explained, no one else on the block is allowed to obtain a rental license because the neighborhood is at, or as in the case above, over capacity. “The loopholes are for those who are privileged with the licenses, but if you don’t have a license, you can’t do anything with your property. There is absolutely no justification for that aspect,” Sanders said. Sanders has confirmed by talking to local property owners that this does, in fact, occur within the City of Winona.
The evidence gathered during his investigation will be part of his clients’ case, which is to go before a judge on January 23. “We will be asking for the court to strike down the rule as applied to everyone in Winona,” Sanders said. “Even if the judge rules that just our clients should be able to get rental licenses, that small move could still have a wider impact.”