EDITORIAL: Flip-flops discourage investment

How many economic developers does it take to revitalize the Duluth-Superior market? Not enough to overcome bad decisions made by local government.

City councils in both cities this week are in the process of rewriting earlier rules governing the rental property market. In both situations, councilors initially acted too quickly and without sufficient information; now they’re picking up the pieces.

In Superior, they created rental unit inspection requirements. Landlords were to pay a fee that would offset program costs. Federally subsidized properties, which are already inspected, were exempted from local inspections. But city officials vastly underestimated the number of those exempt properties. In the end, the remaining number of private properties produced insufficient fee revenue to pay the city’s inspection costs. The ordinance was repealed and now is being recrafted.

In Duluth, city councilors sway with the wind. Earlier, facing pressure to limit the growth of off-campus college housing, they ruled no additional units could be added within 300 feet of existing ones. Monday, they overturned that decision.

For many people, these governmental flip flops are little more than a soap opera. For investors, they represent a “Proceed with Caution” sign or, even worse, a “Stop” sign.

Before investors buy a business, they go through a process called “due diligence” to ensure they don’t encounter unforeseen problems later on. It’s a very thorough process that banks require before they provide business loans. Local government should go through the same thorough process before enacting costly, controversial rules. It’s the least they can do for residents and investors.

Tags: government, city, council, rental