Iowa City is firing back in what is now a yearslong feud with state lawmakers.
It started in 2017, when the Iowa Legislature passed a law barring cities from regulating housing based on familial status. For years prior, college towns had used such ordinances to restrict housing choices for young people.
To adapt, Iowa City developed a series of new rental housing regulations under the banner of “neighborhood stability.” The worst of it was a cap on rental permits in certain neighborhoods.
In turn, the Legislature approved a bill that will outlaw municipal rental permit caps, if Gov. Kim Reynolds signs it. City leaders have already vowed to develop a new set of regulations to soften the impact.
On Tuesday, the City Council gave initial approval for a 10-month rental permit moratorium, meant to give staff time to devise new rules governing rental properties.
Council heard from more than a dozen community members who explained how rental restrictions impose burdens on renters and landlords alike. Some property owners invest in their homes for decades, but when they want to sell, they find the market value is greatly reduced by the inability of prospective buyers to obtain a rental permit. One woman said the policy cost her tens of thousands of dollars.
City leaders spent a little bit of their time discussing the merits of rental restrictions, but they seemed more interested in wagging fingers at state lawmakers, who they accused of “blindsliding” them with the bill.
That was a surprising characterization since I published a column back in December 2017 quoting an influential Republican lawmaker who told me the Legislature might reexamine the issue, and that Iowa City was going “against the original intent of the law.”
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“The good news is the impact of the misguided rental cap may be short-lived. Don’t be surprised if it is tested by the courts or the legislature,” I wrote in 2017.
And by the way, this year’s bill to ban permit limits was first introduced in early March and earned final House approval nearly seven weeks later, plenty of time to air grievances. Notice of the city’s moratorium was first announced this week, but it could earn final approval as soon as next week if council members vote to collapse the required second and third readings.
As I understand it, lawmakers’ intent has been to protect property owners and renters alike from local government intervention beyond basic health and safety regulations. If it’s local control you want, there is no level more local than the individual.
Local governments had directed their professional lobbyists to sink the Legislature’s ban on rental caps, or at least try to weaken it. Rep. Mary Mascher, D-Iowa City, put forth an amendment that would have allowed for some sort of friendlier rental permit caps. Republican colleagues weren’t interested.
Iowa City officials may be disappointed with the results, but it was a predictable outcome, not a legislative sneak attack.
As the city looks to design new rental rules, administrators should remember government regulations are more like a hammer than a surgical tool. Hit property rights too hard and you can expect the Legislature will respond once again.
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