Government

Iowa City looks anew for way to regulate rentals

New plan draws support from homeowners, worry from students

Christopher Warnock walks past a rental property Thursday as he talks about the makeup of owner-occupied houses and rent
Christopher Warnock walks past a rental property Thursday as he talks about the makeup of owner-occupied houses and rental properties in the Goosetown neighborhood where he lives in Iowa City. The neighborhood would be included in a plan the city is et to take a final vote on this week that cap permits for certain rental properties. (Jim Slosiarek/The Gazette)
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IOWA CITY — While Iowa City’s infamously tight rental housing market is growing with new apartment buildings, it likely won’t see gains in another type of housing — rental homes and duplexes near downtown.

The Iowa City Council is set to vote Tuesday on the third and final consideration of rules to strengthen minimum rental housing requirements and effectively stop any increase in the number of rental homes and duplexes, stabilizing some of the most popular rental neighborhoods.

The move is in direct response to a new state law passed earlier this year that said cities could no longer regulate the number of people living in a given unit based on their family status.

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The new law threw a wrench in how college towns like Iowa City legally could deal with teeming rentals — and the noise and traffic they can create — as students seek temporary places to live close to campus, including in established neighborhoods.

“You’ve got this ecosystem that’s got a very delicate balance,” said Christopher Warnock, a member of the Goosetown Neighborhood Association, which is northeast of downtown. “From a student perspective, I’m sure they’re frustrated because they’re like, ‘Well, we don’t have enough places to live’ ... But nevertheless, there has to be some kind of balancing of the interests and I think that’s what this probably does.”

If passed, the ordinance would not allow the city to grant any new rental permits for single-family homes or duplexes in certain neighborhoods where 30 percent or more of those structures already are rentals. The ordinance also would strengthen some minimum requirements for the structures themselves.

It would not apply to apartment complexes and those landlords who already have permits, as long as they stay in good standing with the city.

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“Just because we put a cap in place doesn’t mean that all these rental properties are going to go away,” said Stan Laverman, senior housing inspector. “We did the research and we kind of have these expectations of what a healthy neighborhood looks like, and a healthy balance.”

The final reading of the ordinance is scheduled for 7 p.m. Tuesday in City Hall. The first passed 7-0 and the second passed 6-0, with member Pauline Taylor absent.

The city used long-standing boundaries to define the neighborhoods around the University of Iowa. Districts with the highest percentages of home and duplex rentals also had the highest number of nuisance and noise complaints, according to the proposed ordinance.

These include the east-of-downtown neighborhoods of Bowery at just over 76 percent rentals, and College Green at 54 percent rentals, among others, according to data in memo from Karen Howard, city planner.

Additionally, the city would include adjacent neighborhoods under the cap to avoid any rush by landlords or investors hoping to convert properties just outside the major nuisance zones, according to the proposed ordinance.

City officials believe a cap would help neighborhoods avoid a tipping point where “nuisance and noise complaints reach a level that compromises the health and stability of the subject neighborhood districts,” according to the proposed ordinance.

FACING A PROBLEM

Previously, Iowa City had permitted only three non-related people to live together in a dwelling. This code was a “an important tool to promote peaceful habitation in residential areas,” especially those around the UI, according to the code.

But House File 134, which goes into effect in the new year, eliminates that tool for cities.

While the new law presented an obstacle to Iowa City, it gained the support of the ACLU of Iowa and other civil rights groups. In an April statement, the ACLU said the new law allowed Iowans to define their owns families, and city restrictions could no longer “severely harm moderate-income homeowners who rely on sharing their homes with unrelated renters to meet their monthly mortgage payments.”

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“They have operated as highly restrictive planning devices that sweep too broadly in an attempt to solve student rental problems in predominantly single-family neighborhoods,” said Rita Bettis, legal director, in the statement.

In response to the new law, Iowa City placed a moratorium on new rental and building permits for single-family homes and duplexes in areas around the UI in June, set to expire Jan. 1.

“I was always very uncomfortable with that because it seemed somewhat discriminatory to me. I didn’t like that,” said Warnock, of the Goosetown neighborhood, adding he supports the permit cap instead.

Immediately following the bill’s adoption into law, the city received about 40 building permit applications to add more bedrooms onto rental single-family homes and duplexes. In earlier years, the city usually got fewer than five of those applications, according to the ordinance.

“They could’ve handled that through a building and zoning code more than a rental permit change,” said Chris Villhauer, president of the Greater Iowa City Apartment Association. “The city is frustrated. ... And now they’re looking at a way to not necessarily make it mutually beneficial for everybody to solve the problem.”

AIRING CONCERNS

At recent council meetings, multiple UI students expressed concern the ordinance was not addressing the proper issues, could spike rental prices and limit walkability,

Austin Wu, a UI sophomore from Cedar Rapids studying public health, worried the ordinance would push many students farther away from campus and take away their ability to walk to class.

Benjamin Nelson, UI Student Government’s city liaison, said he doesn’t believe the rental cap ordinance would solve the real issues.

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“I was concerned because it’s not addressing the root of the problem. To me, it’s putting a Band-Aid on what the bigger issue is, and it’s a lack of affordable housing on campus,” he said. “We’re always advocating for higher and denser buildings. Create more supply; students can live closer to campus.”

Nelson said that in the long term, the ordinance could restrict the housing supply for students.

“Whether or not this policy proves either detrimental or largely irrelevant to the student housing market is only if Iowa City continues to promote growth in the apartment complex areas,” Nelson said. “If no further action is taken, then I think this will prove detrimental in the long run. ...”

Wu said the ordinance “inherently” restricts the housing supply in the city, which has potential to drive up rents. He said he’s already worried that apartment units being built are too expensive for many students.

Council member Susan Mims said during the first consideration of the ordinance that she wanted students to understand the city isn’t taking away any current housing. She said she does, however, see it as a “living document,” or one that should be reviewed by the staff and council on a regular basis.

Mims pointed to a memo from City Manager Geoff Fruin to the council, which outlined the recent and future apartment complexes coming to Iowa City and targeted for students. In 2018 or later, 886 new bedrooms are planned for the city.

“I think we’re going to see that that’s going to make a difference,” Mims said at the meeting. “The goal of this policy, in my mind and I believe in council’s collective belief, is that this is neighborhood stabilization ... It’s important to have that balance between owner-occupied and rental.”

SEEKING SOLUTIONS

For the Greater Iowa City Apartment Association, Villhauer said it’d be more ideal if the city approached policy to regulate occupancy in a different way.

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“Logic says that, supply and demand, that, yeah, if there’s less supply, the prices will probably go up,” Villhauer said. “It also means, though, if you’re a small-business person and want to buy a rental property or buy property that’s not a rental but make it into a rental to make extra income, your choices have dwindled.”

He pointed instead to the International Property Maintenance Code as a potential guideline.

It recommends basing the number of people who should live in a dwelling based on the number of square feet, sleeping areas and combined spaces.

“For the most part, landlords aren’t against a max of some sort. Most landlords don’t want to have overcrowding in their apartments. It’s not good for the apartments; it’s not good for the living arrangements,” Villhauer said.

For students, Wu he said he believes part of the problem is that students don’t have a sense of ownership of their rentals so they often bounce around from year to year. He said some of the responsibility falls to landlords in encouraging students to rent a unit for more that a year.

Warnock, who has represented both tenants and landlords as an attorney, said that as a homeowner, he appreciates how diverse his neighborhood is.

Goosetown, established in the 1850s, is lumped in with the Northside neighborhood in Howard’s memo. The district has more than half its single-family homes and duplexes as rental properties.

“There was always this sense of like, we value the diversity and the incredible vibrant mix of the neighborhood and we don’t want to see that destroyed because of these developers,” Warnock said, adding he asked the city to include Goosetown under the cap. “We need a livable city, not just a city full of expensive properties.”

IF YOU GO

What: Iowa City Council vote on rental housing permit cap

When: 7 p.m. Tuesday

Where: City Hall, 410 E. Washington St

Key facts

• The potential rental permit cap ordinance would limit the number of rental permits to 30 percent of single-family and duplex homes in the neighborhoods around the University of Iowa.

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• The ordinance is in response to a new state law, House File 134, which made it illegal to regulate rental occupancy based on familial status. Previously, Iowa City allowed only three non-related people to live together.

• City officials are hoping the rental permit cap would ensure neighborhood stabilization around the city.

• University students and landlords are concerned about the ordinance’s potential impacts, such as limiting housing supply or increasing the difficulty of entering the rental market.

l Comments: (319) 339-3172; maddy.arnold@thegazette.com

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