In a case being followed by many college towns across the state, the Minnesota Court of Appeals recently upheld a City of Winona ordinance limiting rental licenses. The ordinance caps the number of properties elgible for rental certifcation to 30% of the properties on a block. Licenses are granted on a first-come first-served basis. Rental properties existing prior to the adoption of the ordinance are exempt from the requirement.
The ordinance was adopted in 2005 as a result of an increase in the number of rental properties and concerns about off-street parking. A City task force found that rental housing comprised about 39% of Winona’s housing units, but were resonsible for 52% of complaints. The task force paid special attention to neighborhoods surrounding Winona State University, which has enrollment of 8,900 students, and found that rental properties tended to “become run-down and unnatractive.”
The appellants in the case are the owners of three house who were each denied rental licenses due to the 30% cap. One homeowner wished to rent his home while he was on military duty in Afgahnistan, while another sought to rent his property out after he was unable to afford his mortgage payments. Their attorney Anthony Sanders stated their case as “an issue of whether you can take a perfectly safe home and rent it out to perfectly safe tenants, of whether you can be denied that right because your neighbor’s already done it.” According the Sanders the plaintiffs will ask the Minnesota Supreme Court to consider the case.
In its ruling the MN Court of Appeals found that it could “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.” In upholding the lower court’s decision, the Court of Appeals found that the 30% rule was rational, and did “not delegate legislative power to other property owners,” it affirmed the district court’s award of summary judgment to the City.
10,000 Retiring Baby Boomers every day. Every Day, for the next 20 years. Locally and nationally, even globally, this is our new demographic normal – an aging population with fewer and what baby boomers would have you believe, “less talented” workers to replace them.
United States birth rate (births per 1000 population). The red segment from 1946 to 1964 is the postwar baby boom.
Bigger than huge, this is a monumental generational shift that will affect numerous aspects of our lives – opportunities, obligations, and financials. State Economist, Dr. Stinson, recently spoke on the new normal in his Economic Outlook, noting “As a significant portion of our [Minnesota’s] population ages, there is not much in the way of labor force growth to replace these individuals.”
The Dinkydome was renovated by Doran Companies and converted into loft-style apartments.
Kelly Doran knows retail. He knows it so well, in fact, that he recognized when retail would begin to decline, and he had the vision to exit retail development and shift his focus to multifamily before it was a hot commodity. The question that resounded with Doran, was how to apply decades of retail experience to a new product, multifamily? “What are shoppers looking for?” asks Doran. “Convenience, security, and a pleasant atmosphere.” These factors can make or break even the best retail centers. Coincidentally, these happen to be the same attributes that urban renters are looking for in their new homes.
Applying this philosophy to his student housing projects near the University of Minnesota in Dinkytown, Minneapolis, Doran has brought online hundreds of new high-end market rate units in the last several years. When Doran first recognized the need for student housing, he pursued the Dinkydome site. Not listed on any historic registry, Doran figured the project would be a relatively straight-forward venture. However, like many development projects in recent years, there were entitlement challenges, lawsuits, and at one point, financing was completely unavailable.
In late 2008, soon after purchasing all 3 parcels for the project which included both the Dinkydome site and the future site of Sydney Hall Apartments, Doran’s 9 million dollar loan disappeared, and he had already invested 3 million. “We sat around and drank for a couple of months,” jokes Doran, “Then we had to find a solution.” The size of the Sydney Hall building was scaled back from a high rise to a 6-story midrise building to cut costs. The Dinkydome, which before the recession had potential interest from the University as office space, was converted into 2-story loft-style homes.
As a reminder, the 2011 Minnesota Real Estate Hall of Fame Induction Ceremony is being held at the University of St. Thomas Minneapolis campus on Wednesday, October 26, beginning at 5:30 p.m.
Kelly Doran, Principal, Doran Companies
Adapting to the current market conditions is something that Kelly Doran, Principle of Doran Companies has been successful in doing. Transitioning from the development, construction, and management of retail mixed-use properties to student and urban residential housing, Kelly Doran will share his experience.
Kelly Doran is the founder and principal of the Doran Companies, a diversified commercial real estate company that provides development, finance, construction, and property management services. Doran has been involved in the real estate development business for nearly twenty-five years, after an earlier career in commercial banking. In the past twenty years Doran has developed, constructed, leased and managed many projects that comprise millions of square feet of commercial real estate, including projects such as Woodbury Commons and Tamarack Village, in Woodbury, the Village of Blaine, in Blaine, Silver Lake Village, in St. Anthony and many others. Currently, Doran owns in whole or part several million square feet of commercial space. Most recently, Kelly developed the Sydney Hall Apartments and renovated the historic Dinkydome building adjacent to the University of Minnesota. His second student housing development, near Dinkytown at the University of Minnesota, will open this fall.
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