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…
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