After hearing the case of three Winona property owners fighting the city’s cap on rental houses, the Minnesota Supreme Court decided not to decide.
In a ruling issued Wednesday, the high court found that the case was moot because each homeowner had already resolved their fight, either by selling their house, letting it go back to the bank or gaining a rental license. The order left the city’s law in place.
The homeowners were challenging the city’s 2005 ordinance limiting the number of rental properties to 30 percent per block in some neighborhoods. The rule was meant to ease parking problems and protect the neighborhoods from decline, but property owners who were denied long-term rental licenses sued, arguing the rule infringed on their property rights.
The case was being watched around the state to see whether governments could limit house rentals in specific areas to preserve neighborhood livability. Both the district court and state court of appeals ruled in favor of the city.
Mankato, Northfield and West St. Paul had similar caps in varying percentages.
The court acknowledged that other municipalities have similar regulations, but said they did not operate in an identical fashion and would require independent consideration. “This case does not present an urgent question of statewide significance,” the court found.
George Hoff, an attorney for the city, said the ruling importantly leaves in place the appeals court’s analysis of city power to tackle livability issues. The cap was “the product of a long process that included several studies,” he said.
Plaintiffs, represented by lawyers from the Institute for Justice, a national libertarian nonprofit with an office in Minnesota, argued that the law treats homeowners unfairly. They appealed on grounds of constitutional due process, equal protection and other arguments.