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Minnesota Supreme Court Refuses to Rule on Constitutionality of Winona’s Rental Ban

Decision upholds rental ban, but leaves its constitutionality an open question at state’s highest court.

Winona, Minn.—Today the Minnesota Supreme Court dodged the issue of whether cities can prevent people from living in perfectly safe homes simply because they are renters. The court’s opinion allows the city of Winona to continue denying hundreds of its homeowners the right to rent out their homes through the city’s “30% rule.”  Because the homeowners no longer owned their homes or were no longer seeking rental licenses, the court decided it would not rule on the law’s constitutionality or legal status.

“The Minnesota Constitution protects your right to rent your property,” said IJ Senior Attorney and lead counsel in the case Anthony Sanders. “ The Minnesota Supreme Court has failed to decide whether Winona violated that fundamental safeguard.”

A coalition of homeowners challenged the law as violating the Minnesota Constitution. They were represented by lawyers from the Institute for Justice, a nationwide public interest firm with an office in Minnesota.

Under Winona’s rental ban, the government allows only 30 percent of homeowners on any given block to rent out their homes. Whether someone gets a license is the luck of the draw. In areas with few renters, some get new licenses. In areas with more renters, no one gets a new license. Other Minnesota cities have similar, and even more restrictive laws, including Mankato (which has a 25 percent rule), Northfield (20 percent rule), and West St. Paul (10 percent rule).

The ruling allows for another challenge to either Winona’s law or the laws in other cities. Because the court did not address the constitutionality of the law, it remains an open question of whether cities can forbid renters from living in perfectly safe homes, simply because they are renters.

“The government cannot arbitrarily restrict the property rights of some but not others,” said IJ Attorney Diana Simpson. “Life circumstances change. In Winona, the rental ban is forcing people into foreclosure by forbidding them from renting out their homes while they are away or trying to sell their homes. The Court could have put an end to cities violating the right to be secure in your property. Instead they sidestepped that fundamental issue.”

The case was filed almost four years ago when the homeowners sued in October 2011. All of them remained in the case out of principle. One of them is Ethan Dean, who worked for the U.S. government in five different stints in Iraq and Afghanistan while he tried to rent his house back in Winona. Dean actually lost his house to his bank during the course of the case and has only remained in the lawsuit  to sue for a dollar of damages.

“It’s unfortunate that the court has not enforced one of my most fundamental property rights. I am proud to have fought this important fight. But I’m also frustrated that the court did not answer the fundamental question about the ban’s constitutionality,” said Dean.

Another set of homeowners in the lawsuit, Ted and Lauren Dzierzbicki, were unable to sell their home for over four years, and only just sold it in March 2014. The other client, Holly Richard, was told she could not obtain a rental license for over two years before the city admitted she had been wrongfully denied her license as it had miscounted the number of licensed properties on her block.

Because none of the plaintiffs still wanted to rent their homes, the court said the case was “moot” and they did not have to decide it. Instead, other homeowners, faced with the same problem, will have to bring another lawsuit.

The Institute for Justice is the national law firm for liberty. For more on this lawsuit and today’s decision, visit http://www.ij.org/mn-rental-caps.

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