NORTH MANKATO — Amid vocal protest, the North Mankato City Council approved on Tuesday a series of rental code reforms that includes a controversial cap on the amount of rental properties within a given city block.

The council voted 4-1, with Council Member Kim Spears dissenting, to cap rental property density to no more than 10 percent in single-family and duplex-zoned neighborhoods.

More than 40 people came to the meeting to express concerns about the cap.

Some took issue with the cap's 10 percent threshold, while others worried the cap would cause rents to rise and rental options to become scarce. And some were concerned with the way city officials conducted its public meetings on the cap issue.

Many of them spoke out at a public hearing in opposition to the cap.

"The problem lies in the zoning codes and the land use regulations," said Matthias Leyrer.

Leyrer, a City Council candidate who blogs on urban planning and architecture, believed the council's decision would negatively affect the local housing market.

He wasn't the only one. Local realtors representing the Realtors Association of Southern Minnesota Board of Directors publicly opposed the cap, as did a representative of the American Civil Liberties Union of Minnesota.

"We see that historically these initiatives, these ordinances, have been used to exclude minorities in cities or neighborhoods," said Julio Zelaya, a coordinator of ACLU's Greater Minnesota Racial Justice Project.

Only two people spoke in favor of the cap at the meeting. Both urged the council to pursue more enforcement efforts and be more strict on bad landlords.

Part of the cap proposal included several reforms expanding the city's rental code enforcement efforts. Those reforms include allowing police to give a civil citation, or a "strike," against a landlord's license even if officers don't issue a criminal citation.

North Mankato also will issue fines and mandatory inspections for every strike, as well as a new stipulation requiring rental properties to have tenants. The city also requires a minimum of two off-street parking stalls for all rental licenses issued, as well as additional parking requirements for properties with more bedrooms.

There are exceptions to the city's cap. All current rental licenses are grandfathered in under city code, and rental licenses will also transfer if the properties are sold. Homeowners can apply for temporary rental licenses good for up to two years if they're trying to sell their house, and the cap doesn't apply to landlords who live on their rental property.

The city will put together a task force to review the rental code reforms and report on them in 18 months.

Most of the council supported the reforms, as well as the rental density cap. Council Member Diane Norland, who owns rental property in North Mankato and Mankato, voted in favor of the cap in part because it helps protect housing stock in places like lower North Mankato, which contains the majority of single-family rental properties in the city.

"It's time that we stop the trend of these houses turning over into rentals," she said.

No other council member owns rental properties.

Only Spears voted against the cap. He said during the meeting the cap would be unconstitutional if enacted and would open the city up to potential lawsuits.

"If rental of your property is a legitimate use of your property, then somebody saying you can't do that is arbitrarily a taking of your property," Spears said.

Spears also tried and failed to amend the proposal to take out the cap and parking restrictions.

Mayor Mark Dehen supported the reforms but didn't support the cap. He said after the meeting he heard overwhelming opposition to the cap at the city's public meetings. He also took issue with the cap's 10 percent threshold.

Yet he voted for the proposals in part because of the city's task force, which he sees as a stopgap against the cap should it prove detrimental to the city.

"It's about trying to find a balance," he said. "Respecting the rights of landlords, respecting the rights of renters, respecting the homeowners, it's about trying to find a balance between all of them."

Behind the process

Dehen was the only member of the council to attend both public meetings on the rental cap, which took place last month.

Those meetings drew controversy after City Administrator John Harrenstein argued with one local property owner for more than five minutes during the first meeting over whether people should ask questions in a large group or break into smaller groups where more city officials could answer concerns.

Harrenstein said at the time the meeting was disrupted by a small group of people seeking to "hijack public meetings" for their own purposes. 

The city brought in Envision Lab, a local creative workshop company, to run the second meeting. Residents spent the first 45 minutes of that two-hour meeting discussing how they felt the first meeting had gone wrong.

Mayoral candidate Tom Hagen, who has had issues in the past with the city of North Mankato over its handling of noise complaints, took the city to task for the way city officials handled the rental density cap issue. While the public meetings were open to everyone, city officials only mailed meeting notices to property owners. 

"You need to get the citizens of this community involved in this process, everyone who's here, and come up with a reasonable process that works for all of us," he said.

Harrenstein said last month he felt the public meetings were very positive and would assist the council moving forward. He pointed out several public suggestions that eventually became part of the set of rental code reforms the council passed Tuesday.

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