Rental Reform – Read first, then substantiate your hatred

First of all, you can find the full summary and the proposed ordinance here.

The primary purpose of this ordinance is to acknowledge that it has become a business to convert single family homes into multi-tenant boarding homes in a way that maximizes income for the business owner.  That business model also puts stress onto the neighborhood because these homes and these lots were (in many cases) not designed to hold 5 or 6 college students each with their own car.  This business model is at the core of the student / resident conflicts.

The problem is not students, rentals, or renters.  I personally believe that we should have more of each in Duluth.  The problem is that when a person converts a 3-br single family home into a 5-br apartment building, they are maximizing income and externalizing the costs onto the rest of the neighborhood.

The proposed ordinance limits the number of rentable bedrooms to the number of bedrooms on the assessor’s records.  It then limits the number of tenants to the number of bedrooms.  A tenant is defined as an individual or a family unit.  One family, couple, or significant other and any kids they might have would be one tenant.  And yes, if a couple of frat guys want to share a bed in order to get around the spirit of the law, it is certainly their right to claim that they have a significant romantic relationship with one another.

One of the reasons that rental rates are so high in Duluth is because the standard is being set by the income that can be generated from 5 students living in a house.  If I can get $1500 renting to 5 students or $1000 renting to one family, the economics are clear.

We need to get rid of the 300′ rule in order to restore the property rights of these home-owners and allow for more rental opportunities in Duluth.  But, to do that, we need to define the path to which a person can reasonably rent the house without putting an unfair burden on their neighbors.

By getting rid of the 300′ rule we will allow more homes to become rentals – which we should do – the question is do those new rentals become 5-tenant mini-apartment buildings or are they now available to be rented as a single-family residence?

With massive student loans, higher down-payment requirements, and a soft job market, the path to home ownership is much more difficult.  We’ve got to start thinking about how these young would-be-homeowners can afford to rent in Duluth.  This ordinance, combined with the repeal of the 300’ rule is good for those who 5 years ago would have bought their own home, but that option is not available to them today.

Students are going to live in our neighborhoods.  I have no problem with that, my block has a lot of them and we get along just fine.  But, for those in the business of making boarding homes out of a single family house, I think it is reasonable that the business owner provide off-street parking, that they limit the density of who lives there so it doesn’t negatively impact the neighbors, and I think it is reasonable to expect accountability for how that business is being operated.

A hillside traditional with alley parking and 3 students living in it isn’t a problem.  We should encourage that.

A hillside traditional with two extra bedrooms in the basement, with 5 car-driving students with no off-street parking options, is much more likely to negatively affect their neighbors.  I think it is reasonable for a community to limit this type of conversion.

Let’s assume that students are willing to pay $300 for a bedroom and let’s say that a young family is willing to pay $1000 for a home.  In the first scenario the home could be used for either potential renter.  In the second scenario, the family either comes up with $1500 to rent that house or they look elsewhere.

Here’s an example:  I own a 3 bedroom Hillside traditional with a finished basement.  With a little sheet-rock, it would be very easy for me to convert that home into a 5-bedroom rental.  But I also don’t have any off-street parking and only 50 feet of frontage.  Should I have the ability to rent a 5-bedroom home knowing that by doing so I am taking any street parking away from my neighbors?

I could make $500/mo more than my mortgage.  Pretty good deal for me, pretty bad deal for my neighbors.

This proposal regulates the physical characteristics of the property and based on that, determines the appropriate use.  It’s not about limiting rentals and it’s not about some artificial standard of how far apart rentals should be from one another.  What it says is if you are going to rent in Duluth, we expect the property that you are renting to be adequate enough to avoid putting a burden on your neighbors.

I think that’s a reasonable standard.

You are now all free to “substantiate your hatred.”  (ha – I love that – thanks Paul!)

There are no shortage of counter-points out there and folks who will be upset with the proposal, but hopefully this gives a little context to what the proposal attempts to accomplish.  Thanks for hearing me out…

25 Comments

conrad

about 4 years ago

We could fix our problems with parking by banning cars in the city limits and all ride bikes. Best idea ever.

Eric

about 4 years ago

Thank you Mayor Ness for responding. I love the new ordinance! Something needed to be done to prevent some of the greedy landlords from maximizing their profits and minimizing their upkeep to the property/neighborhood.

conrad

about 4 years ago

Sorry Morgan Park. Suckaaaaaas!!!!

Claire

about 4 years ago

Sounds good to me, thanks for explaining the ordinance, Don. Just hope you all can enforce it.

CeeGee

about 4 years ago

Thanks, Don. Duluth is fortunate to have a mayor willing to reach out in a public forum such as this. Question: Does the proposed ordinance -- or any current one -- prevent a landlord from simply slapping some asphalt in the front lawn in order to meet the parking requirement? That certainly would be an easy out -- and the first option -- for any prospective landlord who doesn't have room in the back of the lot.

Danny G

about 4 years ago

Wait just one second here. Was this PDD post written using a city government computer?

baci

about 4 years ago

As the anointed 300' king, I hereby fully endorse this as reasonable and prudent management of our shared resources! If it's in place and fully enforced, I'll be the first say b'bye 300'rule. It's worked to restore equity and fairness and MANAGED GROWTH to other communities, we should support it now. Thanks for sharing your thoughts Don!

@ndy

about 4 years ago

The proposal is well thought out and I think many of the necessary components are there, but I have a few concerns. First, how does this increase the size of Duluth's rental stock? If part of the problem is high rental rates, I don't see an increase in licensing fees, inspection fees, non-compliance fees, etc., not to mention the reduction of rentable rooms for some landlords, as a wise way to help a single family (or anyone else) find a cheap apartment. Second, what is to prevent a landlord with a home such as yours from creating a few bedrooms in the basement that barely meet the legal criteria in order to comply with the ordinance and thus perpetuate the problems you've cited? Assuming some of the most problematic landlords are those seeking to maximize their profit, they will surely not delay in turning basements and dining rooms into bedrooms, seeking out tenants who are shacking up with their significant other, cramming families with a young child into a single bedroom if possible, etc. It's my understanding that there will be a maximum number of bedrooms based on square footage and I think that the ordinance's effectiveness will rest pretty heavily on that standard. Third, not that this is all that important, but will my friend technically have to have a rental license in order to let me crash on his couch for the night? On a more serious note, the "What is a tenant" section needs to be far more detailed. As written, that definition could include people staying at a motel, at CHUM, an individual leasing office space or a foreign exchange student living with her host family as renters under the ordinance. Lastly, could you explain the parking regulations a bit more? The wording makes it sound as though existing rental properties are grandfathered in. Is that correct? And if so, how are parking issues going to be remedied (assuming landlords see it as more cost effective to leave their tenants parking on the street rather than creating off-street parking)?

The Big E

about 4 years ago

Chapel Hill, NC dealt with the "yard-full-of-cars" some years ago. [See Section 5.9.9.] I don't know how well this has worked out over the years, but it's one potential model for that particular issue.

Nobody

about 4 years ago

Where I live (big city suburb not in MN), they limit the amount of front lawn that can be paved/used as driveway. For R1-R2 the max is 25%, for R3-R4 it is 30%.

B-man

about 4 years ago

I have a rental license for my house and one of the requirements for being approved was having a parking space for each bedroom. soooo? How about we hire one police officer to respond to all the complaints caused by; non-licensed rentals, parking issues (not just students), and parties/ disturbances, all of the revenue from that officers effort will pay for his/ her salary and benefits. I'm going to guess that if someone is focused on these issues daily there would be no lack of opportunities to give ordnance violations which as we all know = $ Rules without enforcement is useless. Rules without enforcement is useless. Rules without enforcement is useless. Rules without enforcement is useless. Rules without enforcement is useless.

linda

about 4 years ago

I am grateful to hear a reasonable approach to our neighborhood issues that does not involve homeowners losing both their ability to rent (if need be) and to sell their house at fair market value. As I approach retirement I would like to know I can rent while we try out the 'snowbird' lifestyle or not have difficulty selling my wonderful home because of the 300 ft rule. Also, I find a need to comment that our neighborhood (which is pretty darn close to both 'colleges') has never had a problem with renters. I resent that we have to live under some 'rule' that is supposedly for our benefit when we have none of the issues it supposedly addresses. Let's move this along so we can get rid of the 300 ft rule ASAP!

Terry G.

about 4 years ago

I also live near both colleges and, based on the Mayor's comments, like the ordinance. However, enforcement will be the key. Even enforcing so-called little things like shoveling sidewalks (someone should count all the year-round walking commuters in that area!) will be huge.

Don Ness

about 4 years ago

Thanks for the comments - a couple quick responses: 1) Enforcement is key. The additional fees will be directed specifically to additional housing inspectors and a police officer who will be dedicated to these issues. 2) The 300' rule has created empty homes - lift that restriction, you will have more supply. 3) Parking rules - a current rental would have to pay a fee for the spaces that they cannot provide for their tenants. Any NEW rental would be required to provide off-street parking. 4) Any addition of bedrooms would trigger full compliance with the per unit parking rules. So, if you have a 3-br traditional and want to add two more bedrooms. You can do that as long as you can provide 5 off street parking spaces. 5) Yes, there are standards as to how and where parking can be created - the parking would have to be legal to qualify. You can't blacktop your front yard. 6) No, you don't need a license for the person who is temporarily crashing on your couch.

Bad Cat!

about 4 years ago

Agreed about the 300' rule creating empty houses. A few years ago I was forced to foreclose on a house that I couldn't afford to live in, and wasn't able to rent out. Well, I'd say the blame is about 40% 300' rule, and 60% idiot ex who emptied the banking account then moved away.

thedud

about 4 years ago

Mayor Ness - if you plan on getting rid of the 300' rule once this legislation passes, why isn't that being done at the same time? I'd hate to see the new rule pass and the 300' rule left in place...

The Breck Girl

about 4 years ago

Thanks Don, well said. I completely agree with you. Please run for Gov next round. (I know you already stated you wouldn't but c'mon)

Pl

about 4 years ago

The 300 foot rule is the worst piece of legislation Duluth has come up with to date.

ian

about 4 years ago

"3) Parking rules – a current rental would have to pay a fee for the spaces that they cannot provide for their tenants. Any NEW rental would be required to provide off-street parking." Just curious, what is the fee going to be? What about tenants don't have cars? Does the landlord still get penalized by the city?

zra

about 4 years ago

No cars = no penalty. However, if we are to understand this correctly, if the house is a licensed rental, the number of parking spaces provided will be equal to the number of bedrooms?

Scott Burnes

about 4 years ago

That all sounds fine and dandy, but speaking as one of those family renters you're referring to I'd like to ask if you think it's fair to single out renters when the city refuses to address parking burdens created by hospital employees in the neighborhoods surrounding the hospitals? We have a one-stall garage, but two cars. If we need to run an errand during the day starting about 8am and running til after 3pm I can almost guarantee that we will have to park away from our home because parking in front gets taken over by hospital employees not wanting to pay for parking at the hospital. Until you can address that problem, stop going after the renters. I've proposed that Duluth looks at the example Robinsdale uses in the area surrounding North Memorial hospital to city officials. Although the mayor thought it was a good idea, the city official he handed me off to simply gave me the runaround.

zra

about 4 years ago

Nobody is suggesting persecuting renters, Scott. We're talking about the people you rent your house from. Sucks that you've been caught up in all of this, really, but you have to realize this isn't about you. It's probably not even about your landlord. Most landlords are all too eager to follow the guidelines, whatever they may be. There are those others, however, who seek only to fatten their wallets by stuffing as many renters into one dwelling as possible. Those, Scott, are the ones that are the target of all this. Sounds like your parking beef is with the hospitals' inability to provide adequate parking for their employees, which is another issue entirely.

Barbara Montee

about 4 years ago

Kudos on a great idea! Let's make it happen. You'be got my support. I'm one of those landlords some would call greedy. I also encourage other Duluthians to become landlords. In these challenging economic times, many of us have lost our steady paycheck (my story). You might be feeling forced to move to another city with more job opportunities. However, by using the equity you have in your own home, you might be able to buy that house in your neighborhood that is an eye-sore. Put in some sweat equity, rent to a family, and you have partially replaced the salary that you no longer have. Put your old budget on a diet and you might be able to continue living in this great city of Duluth that you have come to love! Then you can join me in working to make "landlord" an honorable profession.

Denette

about 4 years ago

This article makes it sound like a no-brainer to pass. However, the new rule also affects my West Duluth 95-year-old duplex at which I live in one unit (originally built as a duplex) with 1) an increase in inspection fee, 2) an increase in per bedroom/unit fee, 3) for single family homes and duplex only we are charged per bedroom (instead of per unit as all the other rentals are charged) and 4) even though I am not required to provide off-street parking I am subject to an as-yet-unspecified "fee" for each "non-conforming" off-street parking spot. Or, of course, I can remove the garden to add off-street parking to avoid the fee even though legally I am not required to provide off street parking since the duplex was licensed prior to the 2007 off-street parking rule. 5) Plus it restricts who I can rent the apartment to as regards to family units.

Sandy Robinson

about 4 years ago

Is is frustrating to see the word "hatred" used when it is not about hatred, but it is about self-interest. Landlords and realtors want to make money, students want cheap rent, long term neighbors want a stable, or at least semi-stable, neighborhood. If there is such a demand for more rental, why are houses with licenses not rented, not selling and some (two on my block) in foreclosure? When we went to refinance our mortgage in Feb 2009, the appraised amount was the same as what we paid for it in 2004, in spite of $20,000 of improvements. The appraiser said the lower values were due the foreclosures nearby (which were licensed rentals!) Everybody has a story I guess.

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