Local rental units: How much is too much?
The subject of rental property in River Falls usually prompts interesting discussion.
The topic surfaced in 2011 after citizens and a council member expressed concerns about how rental properties affect the value of surrounding property and neighborhoods.
The city completed an extensive study late this year and is due to release a technical document that summarizes that study. The efforts basically resulted in the decision to take no action at this time.
The concerns raised included property deterioration, increased density, congestion, traffic, loss of homeowners and families, trash, unkempt yards, and home exteriors and increased noise.
That led to the city adding a goal to its work plan: Research rental property effects.
In 2012, that goal emerged as "Analysis of Impact of Rental Housing on Single-Family Neighborhoods."
A collective decision by the Plan Commission, City Council and city administrator added the study to a list of things to do.
Next members from the planning department gathered information and presented findings -- mostly Development Assistant David Hovel and Community Development Director Buddy Lucero.
They contacted other municipalities to compare rental policies, picked sample areas of the community, created and analyzed maps and pulled and measured different data, such as percentages of rental housing and its history, numbers of complaint calls and information from comparable cities.
The city questioned: What affect do rentals have on the city and is there cause for concern? Is there a tipping point to the number of rentals on a block or in a neighborhood?
A rental-housing study in the 1960s showed that about 34% of the housing units in River Falls were rentals; in the 1970s it was 39%. The city implemented a rental-inspection and licensing program in the 1980s.
The city analyzed rental data for six decades:
- In 1960, there were 1,411 total housing units, with renters occupying 481.
- In 1970, there were 1,835 total housing units, with renters occupying 707.
- In 1980, there were 2,694 total housing units, with renters occupying 1,214.
- In 1990, there were 3,525 total housing units, with renters occupying 1,679.
- In 2000, there were 4,345 total housing units, with renters occupying 2,092.
- In 2010, there were 5,499 total housing units, with renters occupying 2,311
Of the rentals in 2011, 192 were single-family homes, 335 were duplexes, 70 were twinhomes, 26 were townhomes and 91 were condos. The counts did not include apartments.
The data says the national average of owner-occupied housing for a community is 65 percent. Respective percentages of owner-occupied housing in River Falls over the six decades studied were 66, 61, 55, 52, 52 and 58.
River Falls' report says it is difficult to measure 'cause and effect' of rentals on something as subjective as property values, therefore making it a challenge to answer the question: "How much is too much?"
An Urban Institute study showed that homes sell for around 6% less in areas that have more than a 30% concentration of rental homes.
Another study by the Georgia Institute of Technology says the conditions of unkempt yards, noisy lifestyle and lack of maintenance aren't restricted to rental properties.
It says conditions such as peeling paint, overgrown yards and clutter can decrease a home's value by 10%.
Most available data agrees that rental-occupied properties are better for everyone than a street full of foreclosed and vacant homes.
One of the cities with which River Falls checked had just implemented restrictions on rental units, with strong pushback from citizens that includes legal action.
The River Falls study team also observed and reported that the city has laws to address most noise, nuisance and aesthetic concerns.
The report conclusion says: "There are both pros and cons to rental property. The pros being, you are allowed to rent property if you are unable to sell, it provides homes for families who are starting out or lost their homes, keeps rental rates competitive, forces landlords to maintain property due to competition, and it could increase or stabilize property values either due to the demand or to keep properties from becoming vacant."
Potential action the city could take included requiring a buffer between rental properties, restricting the number of rentals per block, asking for a conditional permit for rentals, establishing restrictions within a certain area, enforce the current housing code more actively, and nothing.
The city chose to take no action, acknowledging that its rental policies are comparable to similar communities and that one option to curb complaints would be tougher enforcement existing ordinances, including stiffer penalties.