I wrote about this subject in my book, Neighbors At War, but now that the court cases are before the Minnesota Court of Appeals, it’s worth discussing again.
At issue is an ordinance in the college town of Winona, Minnesota, which prohibits some property owners from renting out their properties. Landlords have to register their properties with the city. But once a ratio of renters to homeowners is approached, property owners are prohibited from leasing their properties to others. That means that in some neighborhoods, owners are prohibited from leasing their properties, while people on the adjacent block are allowed to lease. It’s apparently the first case in the nation where property owners are prohibited from exercising their historic rights.
If this law is ruled constitutional, the implications are enormous.
(click here for FoxNews story on rental property rights in Minnesota)
FHA has been preventing homeowners from renting their homes for years. In order to obtain and maintain an FHA Certification for your HOA community, FHA requires 51% owner occupancy. Many HOA’s have “capped” or have “disallowed” homeowners from renting their homes, just to keep their property FHA certified.
FHA approved properties are a good thing. First and foremost, FHA approved properties helps the first time home buyer get into a home with a small 3.5% down payment. FHA really needs to lower this 51% homeowner to rental ratio, or get rid of it all together.