Winona’s 30 percent rule, which limits rental properties on city blocks, will come before the Minnesota Supreme Court Thursday in what will likely be the ordinance’s final test.
The legality of the ordinance has already been upheld at the district and state appeals court levels, so its fate before the state’s highest court is not clear. The case is scheduled to be heard shortly after 11 a.m. at Hamline Law School in St. Paul instead of at the Minnesota Judicial Center; the court occasionally hears cases outside its traditional venue as a way to engage both law students and the broader public in its work.
The court is scheduled to hear oral arguments Thursday, and issue its opinion at a later date.
The ordinance establishing the 30 percent rule was enacted by the Winona City Council in 2005 with the intent of limiting the conversion of owner-occupied homes to rentals and reducing the concentration of rental properties in some neighborhoods, particularly those close to the Winona State University campus.
In October 2011, Holly Richard, Ethan Dean, and Lauren and Ted Dzierzbicki, with the support of the self-described libertarian-oriented Institute of Justice, filed a civil suit challenging the ordinance. The plaintiffs purchased residential properties near Winona State University on blocks at or above 30 percent rental after the ordinance was passed. They claimed that without a rental license, their ability to sell their properties was significantly hindered and the value of their properties was lowered.
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Winona County District Court judge Jeff Thompson denied the challenge in April 2013, ruling that the ordinance was “a good faith attempt to address real problems.” The plaintiffs then brought the case to the state appeals court, which agreed with Thompson’s ruling in February 2014.
“We easily conclude that the public has a sufficient interest in rental housing to justify a municipality’s use of police power as a means of regulating such housing,” Judge Michelle Larkin wrote in that court’s opinion. The court determined that the city was within its rights to adopt the ordinance, because it’s applied equally citywide and does not discriminate against any class of property owners.
The 30 percent rule also became a minor issue in a Winona City Council race this fall, with 2nd Ward incumbent Gerry Krage defending it and challenger Ted Hazelton arguing that the city should get rid of it.
Winona’s cap on rental properties on any given block isn’t the only in the state; Mankato, West St. Paul and Northfield have all approved similar ordinances.