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Bemidji City Council: Public protests rental ban

Jenilynn Bohm, a former Bemidji State University student, said she is feeling almost discriminated against by the city of Bemidji in regard to its proposal to temporarily halt the conversion of single-family homes to rental properties.

"I kind of feel picked on," Bohm said Monday during a public hearing on a proposed rental ban.

The Bemidji City Council is considering a moratorium that would halt for up to one year all new rental registrations for single-family homes converted into rental properties.

Bohm was one of 19 people who addressed the City Council, the majority of whom were real-estate agents or real-estate investors. Seventeen of those who spoke were against the moratorium; one person was in favor and one was on the fence.

"It's kind of offensive," Bohm said of the moratorium.

College students can't afford to buy permanent homes, and they depend on low rental rates, which she fears may rise due to limited opportunities in the future, Bohm said.

The public hearing was held in conjunction with the second reading of the ordinance that would enact the moratorium.

The first reading of the ordinance was held July 6. A third reading would be in August, and, if supported by the majority of the council, the moratorium would go into effect 30 days after legal publication.

The moratorium could last up to one year, but the council could choose to lift it at any time.

The first person to address the council was Andy Thienes, president of the Bemidji Board of Realtors, who urged the council to oppose the ban.

"We believe now is not the time to cut off this important part of the real-estate market," he said.

Thienes said that investors, who are the ones who typically have the cash flow available to rehabilitate and improve sub-standard housing, would back away from Bemidji opportunities and focus their efforts elsewhere.

Rather than a proliferation of rental properties, Bemidji would see a dramatic increase in vacant homes, he said.

He brought with him statistics based on the Multiple Listing Service for Bemidji, which states that as of Monday:

- There were 150 active residential listings in the city of Bemidji.

- Bemidji homes are spending an average of 155 days on the market.

- 76 homes have been sold in Bemidji since Jan. 1.

- Of those, 21 percent were foreclosures.

Thienes stressed following the meeting that there were even more foreclosures on the horizon, and others have been sold or transferred in means other than through traditional sales, such as through auctions, which were not included in the MLS statistics.

The city of Bemidji has seen a 40 to 50 percent increase in the number of single-family homes converted to rental units since 2005.

That statistic, along with concerns about the loss of neighborhood character, led the council to consider the moratorium in hopes of assessing the possibility.

A recent tabulation of single-family-homes-turned-rental-units showed that the number is highest in Ward 1, near the BSU campus, where blocks often has a percentage higher than 60. In fact, one block has an 80 percent density; 50.4 percent of all single-family homes in Ward 1 are rentals.

In Ward 2, 20.10 percent of all single-family homes are rentals. Ward 3 has a 17.73 percent, Ward 4 has 19.13 percent and Ward 5 has 10.61 percent.

But select city councilors said it is not the increased density alone that is leading to their current support of the moratorium.

"Density is just one piece of a very big problem," said Councilor Ron Johnson.

Johnson said the moratorium would allow the city time to conduct some studies and carefully examine the issues affecting Bemidji neighborhoods.

"Unfortunately, it's a lack of pride many people have in their own homes," said Councilor Greg Negard.

Councilor Jerry Downs, who did not attend the July 6 meeting at which the first reading was held, said Bemidji is experiencing "urban blight."

That was a sentiment echoed by Jerry Schnabel, a former BSU professor, who supported the moratorium as presented.

"This city is in trouble because it's beginning to look like a slum," he said.

Many of those who spoke against the moratorium urged the council instead to enforce its rental codes and hold all property owners responsible for the continued upkeep of their properties, whether rentals or single-family owner-occupied houses.

Others said the moratorium would take away a property owner's rights.

Darla Desautel, a real-estate agent with SUN Real Estate, told the story of a Bemidji man who lost his job when the Ainsworth plant closed. He has since been forced to relocate out of town and his Bemidji home is in danger of foreclosure.

The moratorium, Desautel said, would force those already in an unfortunate position to have even fewer options available.

"These are real people," she said.

Mayor Richard Lehmann said the proposed ordinance includes language that allows for a new rental permit, if a hardship is demonstrated.