[StBernard] Judge blocks rental ordinance

[Westley Annis]

Judge blocks rental ordinance
St. Bernard restriction is on hold, for now Wednesday, April 09, 2008By Paul
Rioux

A federal judge has issued a temporary restraining order prohibiting St.
Bernard Parish from enforcing an ordinance requiring special permits to rent
out houses that weren't rentals before Hurricane Katrina. 

U.S. District Court Judge Sarah Vance's order bars the parish from evicting
dozens of tenants by shutting off utilities at homes rented by a group of
out-of-state investors who filed a lawsuit claiming the ordinance violates
their property rights. 

Vance, who issued the order Thursday, scheduled a May 1 hearing on the
investors' motion for an injunction to suspend enforcement of the ordinance
while the lawsuit is pending. 

The 25 investors, most of them Florida residents, filed the suit March 17
after the parish posted violation notices on houses the investors were
renting without permits. The notices indicated that electricity and water
would be cut off in 30 days and said the property owners faced fines of up
to $250 a day. 

"The restraining order is an important first step, but it's temporary and
the tenants are still in a panic," said Henry Klein, a New Orleans attorney
who filed the suit. "They're counting the days until the lights go out and
are trying to decide where they would go." 

David Peralta, the parish's chief administrative officer, declined to
comment, citing the ongoing litigation. 

Doing business as Your Home Solution Louisiana, the investors said they
bought and renovated about 80 flood-damaged St. Bernard houses with the
intention of selling them. 

Citing the soft real estate market in St. Bernard, the investors decided to
rent out the houses until the market recovers. But they did not obtain
permits in compliance with a December 2006 ordinance that requires
homeowners to get Parish Council approval before renting out any house that
was not a rental before Katrina. 

St. Bernard officials have said the ordinance is intended to protect
post-Katrina property values by preventing developers from buying tracts of
flooded homes, making minimal repairs and turning them into cheap rentals. 

But Klein said the ordinance is so restrictive that it represents an
unconstitutional public seizure of property rights without compensation. 

In February, the parish paid $32,500 in damages to settle a lawsuit filed by
the Greater New Orleans Fair Housing Action Center alleging that an earlier
version of the rental housing ordinance was racially discriminatory. 

The council never enforced the blood-relative clause and removed it when it
amended the ordinance three months after its adoption. 

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Paul Rioux can be reached at prioux at timespicayune.com or at (504) 826-3321.