The neighborhood seemed like a good place to raise a family. When Kevin Ryan and his wife bought their house at 157 W. Wabasha St. in 1990, the home's location on the edge of the Winona State University campus was a big factor. It was conveniently located near the university, Central Elementary School, Winona Public Library and downtown businesses. 

The Ryans' young son and daughter joined about two dozen children already living in the area stretching from Main to Huff streets.

But the neighborhood changed over the years. Some families moved out, and landlords snatched up single-family homes and converted them to rentals. The same situation repeated itself in other nearby neighborhoods; in some cases, rental permits were being issued for three or four homes at a time.

City Council members responded by voting in 2005 to institute the "30 percent rule," which prevents new rental permits from being issued to homes on blocks where at least 30 percent of the homes already are rental-certified.

Five years later, the rule still has its critics, including a handful of homeowners who have been denied variances from the measure. But city leaders and other residents say the ordinance has worked, preserving neighborhoods by preventing homes from being chopped into rentals.

Recent indications show Winona's rental market may be saturated, and supporters of the rule hope some rental homes will become available for families once more.

"I think some of these properties will swing back," said council member Deb Salyards, whose district includes WSU's campus and many of the surrounding neighborhoods. "The whole goal is to get families in and lower the density."

 

Any discussion of rentals in Winona invariably turns to college students, particularly those enrolled at WSU.

Students represented 25 percent of the city's population in 2000, a figure officials say has only increased since. Enrollment at WSU's Winona campus climbed by more than 950 since 2002, reaching record levels last fall, according to university statistics.

That growth, combined with the rental regulations in effect until 2005, led landlords to swoop in and buy homes near campus.

As student rentals stacked up, so did complaints to council members from permanent residents living near campus - loud parties late at night, beer cans littering yards and dilapidated rental homes.

City leaders responded in December 2004, voting for a moratorium on issuing any new rental licenses. They followed the recommendations of an appointed task force and voted the next year for a new rental ordinance that created the 30 percent rule and limited the number of unrelated people in a rental home at three.

"Everybody said enough was enough," said Salyards, the task force chairwoman.

Under the ordinance, any existing rental licenses were grandfathered in.

Meanwhile, the total number of rentals has continued to climb.

City officials estimate Winona has about 4,600 rental units today, up from just more than 4,000 in 2000. The number of rental units at a licensed property can range from one for a single-family home to 20 or more for big complexes.

About 42 percent of housing units citywide were rentals in 2009, an increase from about 39 percent in 2000 and 36 percent in 1990.

 

City inspector Greg Olson remembers, prior to the ordinance's implementation, often going out to perform a rental inspection and noticing that another group of houses near campus had been bought up for rental.

"I'd go back to the office and say, ‘Well, we lost another block," he recalls.

That changed with the 30 percent rule. Swaths of structures near WSU were no longer being scooped up by landlords.

The rule has stabilized those neighborhoods, said Olson, Mayor Jerry Miller and representatives from the Winona Central City Neighborhood Association. Complaints from homeowners in those areas dropped, city officials said, and the general appearance of many rental homes improved, Miller said.

The change in the number of unrelated people who could live together also helped prospective homeowners, City Planner Mark Moeller said. By lowering that limit, the city also decreased the number of properties in town that landlords could purchase and rent out at a profit - making more mid-range priced homes available to single families.

But the rule had other effects, too - like spreading rentals throughout the city. More than 90 full city blocks are at or over the 30 percent mark, including most of the area closest to campus, so new rental units get pushed farther away.

About 200 rental units have been added since the measure went into effect.

Some homeowners have also apparently found a way to use the system to keep rentals out. City inspectors said they've heard of owners obtaining rental licenses with no intention of renting their homes - simply to drive up the rental percentage on their block. The city does not keep track of how many rental properties are occupied, just the number of licenses issued.

But the biggest objections to the ordinance have come from a few property owners closest to campus.

 

Arnold and Dorothy Ahern bought their home near WSU in 1950.

They and their children lived in one-half of the duplex at 423 Center St., while the children's grandmother stayed in the other half. The block was dominated by large families, the last names of which Diane Holzworth, one of their daughters, can still reel off with ease.

Following the death of the grandmother, the Aherns rented out half of the duplex to another elderly lady, and later a pair of high school teachers. But as their children moved out and the couple aged, they decided to stop renewing their rental license.

The neighborhood went down a familiar path. Families moved out; renters moved in.

The Aherns didn't have a rental license when city council approved the 30 percent rule. As an unlicensed house on a block over the rental limit, Dorothy Ahern, whose husband had passed away, had missed her chance.

The 96-year-old now lives in an assisted-living facility, and her children are struggling to find a buyer for a duplex that can't be rented, they said.

"The house is just sitting there, and you can't even keep a for-sale sign in the yard," Holzworth said, referencing an incident where someone stole the sign. "It's just a disaster."

The family requested a variance allowing the home to be rented, but it was denied by the Winona Board of Adjustment in January. Council members upheld the decision when it was appealed to them in March.

The city has not approved a single variance request since the 30 percent rule was instituted, denying at least six appeals.

Council members have often cited the ability to appeal the ordinance when justifying the rule, but Miller and others have given no indication of what it would take to win an appeal.

During the council's discussion of Holzworth's appeal in March, members said it was necessary to preserve the rule without exceptions.

Council member Gerry Krage even cautioned comments by his colleagues about the family re-appealing the decision if the house didn't sell, saying, "Let's not give this family any false hope."

 

Crews spent a sweltering Wednesday working on the city's newest rental structure at 50 West Mark St.

The new 20-unit dormitory owned by Bluff City Properties will open this fall, according to company promotional materials. Just across the street is Shorty's Greenhouse, a 19-unit building that Bluff City opened last year.

The city of Winona now has rental licenses issued to 1,515 properties, up from about 1,400 when the 30 percent rule went into effect. And City Planner Moeller said he still regularly receives calls from interested parties asking about the rental status of homes.

Much of that can be tied to increased demand by WSU students. The Winona campus has grown by about 700 students since the fall semester of 2005, but the number of students living on-campus has increased only by 139.

The university will open two more residence halls to students this fall, but that won't dramatically affect the number of students living on campus, said Paula Scheevel, director of Housing and Residence Life. Rather, student housing space is simply being shifted, she said.

Nevertheless, WSU's rate of 34 percent of students living on campus is higher than four out of five other universities in the Minnesota State Colleges & Universities system, MnSCU statistics show.

WSU wants that figure to rise to 50 percent over the next 50 years, said Kurt Lohide, the university's vice president for finance and administrative services. The school's master plan calls for new residence halls and additional parking to reach that target.

Meanwhile, officials project "steady but not significant" growth, predicting an increase in enrollment at the Winona campus by fewer than 700 students during the next half-century. Any increases would fall well short of the large enrollment up-ticks of the past decade, said Connie Gores, WSU's vice president of student life and development.

 

For-rent signs dot the neighborhoods surrounding campus, more than inspector Olson can recall seeing in years. Recently, he noticed vacant rental properties in three directions from the corner of Center and King streets, just one block from campus.

The off-campus rental market may be saturated, multiple city officials said.

Bluff City owner Kevin Brady told board of adjustment members last month that his company, which has more than 400 units in the city, had a 9 percent student vacancy rate. And city inspectors report seeing far more rentals still available at this point in the summer than in years past.

"Before you didn't see for-rent signs out by the time college gets out," city inspector Steve Carson said.

The abundance of properties, and choices for potential renters, raises the ante for landlords to maintain their properties, the mayor said.

If homes sit empty because the supply has exceeded the demand, maybe those houses' owners will convert them back to single-family dwellings or put them up for sale, Salyards said. In a best-case scenario, families would buy the properties.

It's the reclamation plan many long-time residents of those campus neighborhoods have talked about since the 30 percent rule was enacted.

"That's kind of my hope," said Ryan, the Wabasha Street homeowner. "I'd like to see those homes converted back."

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