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City council to vote on another rental restriction

When George Hanson bought the Victorian home (built in 1892) on Woodland Avenue, the roof leaked. When it rained, the water would run down the hill, straight into the basement. The sidewalks around the house were collapsed and leaning in toward the house. There were bats and squirrels living in the home, in addition to the four renters who were leasing the home from an absentee landlord.

Hanson bought the home and brought it up to code, investing lots of sweat and tens of thousands of dollars over the years to restore the home. He had to replace 39 broken windows and even more screens, in addition to fixing the roof and other items mentioned above.

Now the home is a duplex, with six renters on one side and three on the other. There are nine off-street parking places, nine bedrooms and three bathrooms.

"The place is huge," said Hanson.

Hanson, along with many others who own rental properties in Duluth, is hoping the Duluth City Council will keep landlords like him in mind when it votes on a change to city code that would reduce the number of unrelated people who can rent a home in Duluth from six to four.

If the city passes the ordinance Monday, Hanson will have to figure out how to make up the lost income.

"My ownership of that building predates every single other person who owns a home on that block," he said. "Now they want to take away my income -- when they knew it was a rental property when they bought their own homes. I have rules for my tenants, a kegger clause, another clause requesting they be good neighbors. If there are police calls, I can keep their whole deposit. And I'm part of the half of the block that actually mows their lawn going toward Woodland Avenue."

There are valid arguments on both sides of the issue: Landlords feel the city is taking away part of their livelihood, homeowners who live near unkempt or rowdy rental properties believe those homes have a negative effect on their neighborhood and quality of life.

Council member Jim Stauber is proposing the law. He said the move was prompted by concerns from two directions: safety of renters and hundreds of complaints about how certain neighborhoods have been taken over by rentals.

"I can show you city blocks where there are three, four, five and even six rental properties," said Stauber. "It changes the character of the neighborhood. ... This could also encourage similar development to Boulder Ridge (recently built student apartments)."

Hanson pointed out that not every student is interested in living in an apartment complex.

" A lot of students want to live in a house, one that's close enough so they can walk to class," he said.

Several landlords who were interviewed said a major problem with the proposed change is its lack of a grandfather clause -- which would exempt existing rentals -- something that was included in both the other recent city code changes (one added off-street parking requirements for rental properties; the other limited the number of rental properties to one for every 300 feet).

"It amounts to a 'taking of property,'" said Jim Gruba, who owns a number of rental properties, a six-bedroom Victorian home among them. "I invested in these properties, brought them up to code -- everything I've done is legal. ... It's unfair, for the city to tell us: 'Legally you can make this investment, but now we're going to take away the value.' If this passes, it will be open season for people who are already renting out illegally -- those of us who play by the rules will be the ones negatively affected."

Gruba also believes the proposed law could create a human rights issue, because it would require landlords and code enforcement officials to determine who is and isn't related.

"You can't discriminate on the basis of familial status, so I could have to decide which law to break," he said.

Many of the problems surrounding rental properties are already addressed in the building code or other city codes, said Jim Mlodozyniec, lead housing inspector for the city of Duluth. For example, square footage for bedrooms: Mlodozyniec said, by law, a bedroom for a single occupant has to be at least 70 square feet; if two or more are occupying the room, it has to be 50 square feet per person.

"The bedrooms must be legal," Mlodozyniec said. "That's an ordinance we enforce when we go in to license a property. ... Sometimes we find illegal attic and basement bedrooms (without proper egress or too small, for example) and we don't license them."

In some ways, he noted, the changes to city code are having the opposite of the intended effect: Instead of decreasing the number of rental properties, the number of applications for rental licenses has actually jumped dramatically. However, he figured the bulk of those are people getting licenses before the new laws take effect.

Mlodozyniec said more than 300 new applications have come into his department in the month since the parking and the 300-foot dispersal ordinances were passed; he said the applicants are both landlords and residents trying to protect the value of their property.

Stauber says the recent changes -- along with Monday's proposed change -- will give city officials "a bigger stick."

"Should a landlord lose his or her license to rent now, the odds are good he won't get it back under the new rules," the at-large councilor said.

The change has support from more than Stauber on the council; he said two other councilors would like to see the number reduced to three unrelated occupants.

Andy Peterson believes the council would be wise to tread carefully, because of what he calls "the law of unintended consequences."

"This (proposed) law is fraught with that," said Peterson, the director of public policy for the Duluth Area Chamber of Commerce. "Will rentals get more or less expensive? I think they'll get more expensive. ... I understand politicians -- you want to do what your constituents want, they live next door to these properties -- but when you enact the law of unintended consequences, God knows where it will go."

Hanson would like to see the council enforce its existing laws.

"The proposal does nothing to improve safety at properly licensed properties. They have to be inspected and safe to be licensed," he said. "Enforcement of current parking, noise, blight and garbage laws would do far more to address neighbor complaints than the proposal. Do you think a four-person house party will be any smaller than a six-person house party?"

A second Jim Gruba, not a landlord, but a Duluthian who has lived in a college neighborhood, questioned the proposed law as well.

"It seems like the intent is good, but I don't know if the mechanism works," he said. "How do you define unrelated?

"The real issue is if the (renters) interfere with the neighborhood -- if they make too much noise or park where they shouldn't."

News to Use

The Duluth City Council will meet at 7 p.m. Monday, Sept. 24, in Council Chambers on the third floor of City Hall, 411 West First Street, Duluth.

There are also plans for a student rally outside City Hall, to begin at 4:45 p.m. Monday.

By the Numbers

Exactly how many new, single-family rental licenses does the city grant each year?

Here it is, by the numbers:

2003* - 432

2004 - 243

2005 - 162

2006 - 289

2007 - Until last month's ordinances were passed, the city was at 174 new licenses, but lead housing inspector Jim Mlodozyniec said close to 300 have come in over the past month.

*A similar ordinance to the one passed last month, limiting the number of rental properties per block, was considered by the city council in 2003, but wasn't passed.