Leaders pivot on rental house restrictions

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HANCOCK COUNTY — Officials are having second thoughts on using government to restrict rental houses in new subdivisions, but they want to make it easier for neighborhood leaders to do so.

The lawyer for those officials, however, foresees the same problems even if they head in that different direction.

The pivot follows concerns shared earlier this fall over rental companies buying up entire neighborhoods, reducing the supply of available homeowner-occupied houses, and attracting residents who don’t take as good of care of properties as owner-residents.

But since then, Gregg Morelock, lawyer for the Hancock County Area Plan Commission, has cautioned planners.

“I understand you want to protect property values and so forth, but the fact is that I’m concerned that we would be discriminating against the rental segment of the population,” Morelock told officials at a recent plan commission meeting.

“…I think it would be subject to challenge and be very difficult to defend on a constitutional basis in terms of equal rights for property owners.”

Mike Dale, executive director of the plan commission, suggested making it more feasible for homeowners associations to curtail rentals in their neighborhoods.

“The county perhaps should not be in the business of prohibiting the sale of homes to these companies that rent,” Dale said. “However, if the HOA would want a covenant that regulated rental housing within their subdivision, then maybe what we could do is make that easier for HOAs to amend their covenants to regulate rental housing.”

He went on to suggest setting a rule allowing 60% of lot owners in a homeowners association to change a neighborhood’s covenants, including limiting rental houses. Thresholds for changing covenants are often much higher than that, Dale noted, making changes difficult to achieve.

But reservations remain for Morelock.

“That’s still us telling the developer what he has to do,” he said. “We don’t tell him any other way. You can do whatever, and I guess we’ll find out if it’s held up in the court system. That’s what I tell all my clients: You can do whatever you want until a court tells you otherwise. Just be ready, because someday, somewhere, somebody’s going to challenge that.”

Scott Wooldridge, president of the homeowners association for The Havens, a neighborhood in Sugar Creek Township, said practical challenges abound even if the threshold for changing covenants is reduced.

“We have problems getting 5% or 10% to show up at our annual meetings,” he said. “You have to pretty much go door to door like you’re campaigning to get everybody in the neighborhood to vote, and it has to be something that’s very powerful.”

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