Minnesota Trial Court Slams Door on Property Rights

Minneapolis—A Minnesota trial judge today upheld the city of Winona’s rental ban, which arbitrarily allows only 30 percent of property owners on a given block to rent out their homes. The rental ban is forcing neighbors to play musical chairs with their property rights—some are allowed to sit down and rent their property and some are left standing with an empty house. The Institute for Justice (IJ) represents the plaintiffs in the case, Dean v. City of Winona. The plaintiffs plan to appeal the ruling.

Under Winona’s rental ban—locally known as the “30 percent rule”—the government gives only 30 percent of homeowners on any given block permission to rent out their homes. Whether someone gets a license is just luck of the draw. In areas with few renters, some get new licenses. In areas with more renters, no one gets a new license.

“Renting your property is a legitimate and historical property right,” said IJ Attorney Anthony Sanders, lead counsel in the case. “Today’s decision denies Winona homeowners that right in violation of the Minnesota Constitution’s guarantee to be secure in one’s property.”

The rental ban exacted a heavy financial toll upon IJ clients Ethan Dean, Holly Richard and Ted and Lauren Dzierzbicki. Each put their homes on the market hoping to sell them, but the economic climate has made it difficult, if not impossible, to sell. They want to rent out their homes to help make their mortgage payments. But because Winona has imposed the rental ban, and they live on blocks where at least 30 percent of the block was granted licenses, they cannot. Ethan Dean has lost his house to his bank because the rental ban made it impossible to sell.

“This fight is far from over,” said Dean. “I am eager to continue the fight for my property rights in a higher court.” The homeowners plan to appeal the ruling to the Minnesota Court of Appeals.

The appeal will have statewide implications because Winona is not the only city in Minnesota to pass a rental ban law. Mankato, Northfield and, more recently, West Saint Paul now forbid many people from renting their homes. So far these laws are unique to Minnesota, but cities in other states may soon follow the state’s lead.

“The Minnesota Constitution and Minnesota courts have traditionally protected basic property rights,” said IJ Attorney Katelynn McBride. “We intend to vindicate those rights for our clients and for all property owners in Minnesota.”

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