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300-foot rule special edition
Who will ‘win’ or ‘lose’ ?
BY Ray Peterson
Community Member
The 300-foot ordinance states that there may only be one rental license for a single family dwelling per each city block. I am opposed to this ordinance because it does not remedy the issues it purports to address and severely impinges on the rights of those it does not intend to target. I am a current property owner living only three blocks from the UMD campus, I grew up only two blocks from the UMD campus, I am a landlord who rents to UMD college students and I am an attorney, so I feel I can address this issue from several different perspectives.
In analyzing this ordinance, I ask the question who will “win” and who will “lose” by its existence. The question of who will “win” from this ordinance is easy to answer – current landlords. The city has eliminated any future competition for landlords by capping the number of rental licenses available. In addition, current rental licenses are “grandfathered” in and subject to the old ordinance regulating rental licenses, so the license remains transferable to a future owner. This means the value of the property with a license has significantly increased. Further, assuming our student population continues to grow and we have eliminated the increase (or even decreased) supply to meet the needs of students, economics state that rents will increase.
So who will “lose” from the proposed ordinance? Clearly, the losers will be persons who rent (i.e., students) and current property owners who do not hold a rental license for their property. Students will be directly affected by higher rents. Current property owners will see the value of their property decrease because the local governing body has mandated they can only sell their property to a single family who will occupy it as a residence. The current property owner cannot sell the property for more value (in some cases up to 50 percent) to a person who may rent it out to fulfill a market need for housing.
In addition, current property owners may have believed they would see a decrease in houses that are rented in their neighborhoods due to this ordinance. However, the ordinance only eliminates any houses from being converted to a rental and does not eliminate any current rental licenses. Because current rental licenses are subject to the old ordinance and freely transferable, current landlords have a greater incentive to hang on to their licensed property. In addition, because of the increased value of the property as a rental, in the future, it is very unlikely a single family wishing to reside in the property would ever be able to match the offer of a person viewing the property as a rental investment. Thus, there is a very high probability that existing rental properties will always continue to be rentals and neighborhoods that are “college” rental areas will remain so for decades to come.
If the proponents of this ordinance desire certain social behavioral changes in certain areas of our city, there are numerous ordinances in our city code that directly deal with such issues as noise, underage drinking, littering and parking. Utilize the existing tools we already have before designing a new tool. In other words, don’t use a hammer to fix a leaky pipe.
Who will ‘win’ or ‘lose’ ?
By Rodger Reinert
Duluth City Council
Duluth has a lot of mysteries. Is Glensheen Mansion really haunted? What really sunk the “Edmund Fitzgerald?” Are there really UFOs buried under Enger Tower? But one of the ones that continually stumps me is why Duluth is unwilling to acknowledge that we are a college town. Higher Education is one of our most important, and fastest growing, economic sectors. The presence of the University of Minnesota – Duluth, The College of St. Scholastica, Lake Superior College, The University of Wisconsin – Superior, and Fond du Lac Tribal and Community College all positively shape our community. The faculty and staff give Duluth an above-average education rate. The graduates give Duluth a well-qualified workforce. And the campus community gives Duluth a culture and arts scene that is only found elsewhere in communities of much greater size. All because we are a college town.
Yet when it comes to the 16,000 or so students that live in Duluth, we do things to single these residents out and tell them they are not welcome. Additionally, we take actions that foster bad will amongst the rest of the community towards our student residents. The citywide 300’ Rule is the most obvious example.
There is no question in my mind that we have as serious issue in the near-campus neighborhoods. A substantial number of single-family homes have been converted to rental property and let’s be honest – it’s student rental property. This has been devastating to the stability of these neighborhoods and needs to be aggressively addressed. However, a rule that applies to the entire city because of problems in specific neighborhoods is not the solution. It’s like using a sledgehammer to try and fix your Ipod. It’s not the right tool.
When you look at the community as a whole, the 300’ Rule has hurt as many people as it has potentially helped. Even worse, it actually increased the number of rentals overall by nearly an extra 500, and grandfathered in every existing rental holding at least a temporary license. This means that renters and homeowners who live next to a problem property will continue to live next to a problem property. It also ensures that neighborhoods with a high percentage of rental property will always be neighborhoods with a high percentage of rental property. These are the very reasons I have consistently fought against a citywide proposal like the 300’ Rule and will continue to advocate other solutions.
So what other solutions are available to us? In March 2008, I brought to the Council several proposals. These proposals were the result of nearly five years of work by myself, as well as two taskforces and three committees.
Advocates for the citywide 300’ Rule, led by Councilor Jim Stauber, managed to defeat these proposals. However, I remain convinced that this course of action is the sophisticated, multi-faceted approach that our community needs and will continue to advocate for it. If the latest “blue ribbon committee” does not bring suggestions similar to these forward, I will.
Time and time again Duluth talks about how important it is for young people to stay in our community. Time and time again individuals speak about how important it is to retain the incredible talent represented in our local college graduates. If people actually mean these things when they say them, then the time to act is now.
Let’s take actions that sustain a healthy rental and homeowner mix around our campuses. Let’s take actions that develop vibrant student and young professional districts that include shopping, eating, and socializing venues near the campuses. And let’s take action that clearly tells our student residents, “You are welcome here.” Thanks for making Duluth your home. We hope you stay for a long while.
• Shrinking the 300’ Rule to a “greater campus neighborhood” and a moratorium on new rental licenses in that area until a new zoning code is written and implemented by the city. RFPs are currently being let to begin the zoning code process. The City expects to begin that process this summer and have the new code in place within 24 months. Nearly everyone agrees that this new code must include tools like a university district or campus overlay district – special zoning rules and regulations that apply to the near-campus neighborhoods. Likely this would include rules about the number of occupants in a home, off-street parking, on-street parking, alcohol use, and party behavior.
• Aggressively addressing nuisance and neighborhood quality of life violations. The 300’ Rule does not address these problem behaviors. We must tighten our ordinances and then enforce them vigorously. And we need help from both UMD and CSS to do this. But in doing so we as a community must remember that being a student does not equate to being a bad renter. And being a renter does not equate to being a bad resident. The problem house in my block is a homeowner.
• Supporting and actively pursuing the development of one, or more, student and young professional housing districts. Places in our community where we clearly welcome our student residents and provide the quality housing, eating, retail, and social businesses students and young professionals tell us repeatedly that Duluth lacks, and cite as a reason for not staying in Duluth after graduation.
• Encouraging homeowners who took out a rental license for their home when the 300’ Rule went into affect, to return these licenses and get a refund for their fee from the city. Many of these owners have no intention of ever renting their home. They are simply trying to protect the value of their single largest investment given the 300’ Rule. However, it makes the problem worse, by nearly 500 homes, for many years to come. An incredible unintended, but predictable, outcome of the 300’ Rule.
• Supporting the new Housing Redevelopment Authorities (HRA) Buyback program. This program is designed to purchase vacant and dilapidated rental property on the open market, rehabilitate this property, and sell it on the open market to homeowners. The title for these properties will include a restriction against rental of the property for the next twenty years. This step is vital in drawing down the single-family rental inventory in the near-campus neighborhoods and re-establishing a healthier rental to homeowner mix.
• Much more aggressively addressing the relative homestead issue. Relative homesteads fall into this grey area in between rental and owner-occupied. For all practical purposes in Duluth, they are rentals. Especially in the near campuses neighborhoods. We need to license and inspect them as such, and we need the State Legislature to tighten the loophole which makes relative homesteads a serious housing issue in college communities across the state.
