CEDAR FALLS | Landlords and real estate agents are gearing up for a legal battle with City Hall over a series of new regulations designed to stem the flow of rental properties into single-family neighborhoods.
Specifics on where, when and how that legal battle will be waged are unclear at this point, but the effort is serious enough to warrant the creation of a “legal defense” fund to which interested parties can donate.
The general aim would be to slow down the City Council, poised to hold a final vote Monday on a controversial ordinance reducing maximum occupancy for certain types of rental properties.
All of this according to Mark Pregler, president of the Landlords of Black Hawk County.
“Several lawyers -- including one or two who own properties about to be affected -- are working in conjunction with a paid legal counsel, doing their research through the legal minefield Cedar Falls has set up,” Pregler wrote in an email sent to the members of his organization on Friday.
One of the lawyers Pregler and his group have approached is Waterloo attorney Rick Morris.
“We have discussed it with some of our clients and have been approached on a general level about whether our firm would be interested in taking some action, but no decision has been made,” Morris said.
At issue is a complicated ordinance that will, for certain existing rental properties, reduce the rental occupancy limit from four unrelated people to three per dwelling unit. The same ordinance would reduce the occupancy limit for newly created rental properties depending on lot and house size and traffic capacity of the adjacent street.
Some homeowners in Cedar Falls argue the ordinance is necessary to crack down on what they perceive to be nuisance-prone rental properties in single-family neighborhoods.
Reducing occupancy limits based on relation is standard practice in Iowa’s college towns, but landlords have resisted such measures in the past. In 2007, the Iowa Supreme Court’s upheld the right of cities to place maximum occupancy limits on rental properties based on familial status in a case involving the city of Ames and landlords there.
A bill sponsored by Republican Rep. Chip Baltimore of Boone would override that decision, which heartens Pregler's supporters.
Daryl Kruse, president of the Landlords of Iowa, favors pursuing litigation against Cedar Falls, arguing some of the new rental rules the council has passed amount to “administrative eminent domain.”
“If a city can’t outright take your property and pay for it the way they’re supposed to, they will change city code to make it obsolete or worthless,” Kruse said. “And that’s what they’re doing.”
Several landlords and real estate agents in Cedar Falls have argued a six-month moratorium on the conversion of homes into rental properties has already negatively impacted the city’s housing market.
For Pregler, legal action would represent a final and desperate attempt to get the City Council to listen to those concerns.
“Walking in the door, the word ‘landlord’ gets the door slammed in our face,” Pregler said. “Landlords before me have burned too many bridges, and every time I try to rebuild the bridge it gets gasoline thrown on it.”