Front Porches Now Ground Zero in Property Rights Fight

From Minnesota to New Mexico, overreaching regulators are violating property rights.

During five tours as a U.S. adviser in Iraq and Afghanistan, Ethan Dean considered it part of his mission to model and promote basic democratic values in the war-torn nations. Ink-stained purple finger principles like free elections, universal education, and individual rights the rest of us often take for granted.

As did Dean, until he got a "Dear John" letter of sorts during his fourth deployment — not from a wife or girlfriend, but the City of Winona, Minnesota.

Authorities in the southeastern Minnesota city informed Dean that he was breaking a law he'd never heard of: Renting his house without a permit in contravention of an ordinance capping rental properties at 30 percent of homes per block.

"This property is on a block that is over 30 (percent) which would mean that it cannot be certified for rental," the city's "Dear John" letter stated. "IT IS A VIOLATION OF WINONA CITY CODE CHAPTER 33A TO ALLOW OCCUPANCY OF A RENTAL DWELLING WITHOUT OBTAINING A HOUSING LICENSE."

Dean's property rights became collateral damage when Winona implemented what's believed to be the nation's first comprehensive rental cap ordinance . The 2006 law restricts rentals to 30 percent of properties per block to curb "excessive on-street parking, anti-social behavior and deteriorating housing conditions" in the college community. In reality, however, 75 percent of Dean's neighbors had rental licenses, grandfathered in when the ordinance took effect.

Suddenly, one of the bedrock democratic principles Dean was introducing overseas — property rights — was under fire, not in the war zone but back home in the Midwest.

"If they realize they can get away with taking these rights away, what are they going to do next? How far are they going to go until it's not the good, old USA anymore?" Dean asked.

Dean's campaign on the home front, now in the courts, illustrates a widening divide over the purpose and primacy of property rights. As copycat rental caps soon passed in three more Minnesota cities and beyond, homeowners' front porches have become the front lines in what's turning into a definitive local property rights dispute.

Dean bought the 1800s Victorian house in 2007 to start a nonprofit recovery home for returning troops, the Welcome Home of Winona. Ultimately, he rented out the residence during deployments to help meet his mortgage payments.

Via email from Al Asad-Anbar Province in Iraq, Dean begged the city to allow him to continue receiving his vital $1,050 monthly rental check.

"If I cannot rent my home, it will be extremely difficult financially to make the monthly mortgage, as well as maintaining the utilities and upkeep," Dean wrote in a letter presented to the Winona City Council in May 2010.

Under the radar, Dean chafed over city interference in email correspondence with a reporter at the time.

"I am currently on my fourth mission in Iraq," Dean wrote from his post with the U.S. Army Human Terrain Team 3-7 infantry. "It kills me to defend our freedoms, when my own home is subject to some 1944 Berlin Nazi BS…I don't care what the city says, THEY do NOT own MY house…why the hell do I need THEIR permission?????"

Wary of a public relations minefield, the Winona City Council granted Dean a waiver, but only until he returned stateside. For his service, Dean was welcomed home in 2011 with an upside-down mortgage and no more breaks from the city. Besides the loss of thousands of dollars in rental income, without a license to attract buyers interested in rental investments the market value of Dean's house plummeted by an estimated $25,000. He had a house that could neither be rented nor sold.

"It's gotten to the point now that something really central to the use of our property rights, being able to rent out your home, is being taken away," said Anthony Sanders, Dean's attorney with the Institute for Justice. "I think we have a really good shot at fighting back because people understand this is just such a central component to owning property."

Peter and Frankie Smith fit the part perfectly in a newly contested case in New Mexico. The Army Corps of Engineers accused the retired couple of violating the Clean Water Act in mid-2011, declaring their parched desert property a water of the United States based on aerial photos, maps, and surveillance from a neighbor's yard. According to the feds, the Smiths owned the proverbial waterfront property, classifying dry land as wet.

"They never phoned me, knocked on the door or anything like that," said Peter Smith, a 65-year-old retiree. "They just wrote me this letter basically saying 'you're guilty' and that's all there is to it."

The Smiths built their retirement home on 20 acres of bone-dry scrub brush and sand south of Santa Fe. In the process of cleaning up the place, Peter cleared out hundreds of dead trees and trash littering a dry ditch the feds dubbed the Gallina Arroyo. Acting on an alleged complaint, the Army Corps shot off a violation notice warning against "conducting any additional work in any stream, arroyo or wetland" without federal permission, stunning and stopping Smith in his tractor tracks.

"Somebody's got to stop these regulators from taking people's rights away," Smith said. "Sitting here looking out my window, I can see probably 15-20 little beds and banks all with dead trees and garbage sitting in them."

A retired surveyor who made his living sizing up land, Smith says the arroyo is a drainage ditch that's dry year-around except for the rare storm in which the precipitation evaporates or seeps into the dry sand almost instantaneously. To the Army Corps, however, it's a tributary that theoretically drains into the Rio Grande River 25 miles away, threatening the silvery minnow, a fish on the endangered species list.

"It sure appears to me they're just after control of land," Smith said. "They're using the excuse it's a water of the United States. If I went to the real estate salesman and said, 'OK, the government has now declared I have waterfront property', they'd laugh at me!"

A year and a half into their ordeal, the Smiths finally turned to the Pacific Legal Foundation, filing a lawsuit against the Army Corps in December 2012. The case accused the Corps of acting as a national zoning board with unlimited control over Americans' land use, aiming for nothing short of a nationwide precedent to curtail Clean Water Act regulators.

"If the Smith's dry creek bed really is a water of the United States under the Clean Water Act, then so is the drain in your front yard and so is the ditch in my back yard. If this is under their authority, then so is every square inch of America and legally speaking, that is not what Congress intended," said Jennifer Fry, the Smiths' PLF attorney.

The Albuquerque office of Army Corps of Engineers did not respond to requests for comment. Yet soon after the Smiths case went public, the Army Corps claim came and went as abruptly as a desert derecho. In March the agency withdrew its classification of the Smiths' property.

"This episode should put the federal government on notice," Fry said. "If they try this ploy again — if they try, in effect, to seize private property by conjuring up a mirage of water where there isn't any — PLF is ready to fight them in court, anywhere in the country."

Increasingly, the case can be made that like politics, all property rights are local, regardless of the level of government jurisdiction involved. No wonder that city, state, and federal authorities across the county are closely tracking a Minnesota court ruling expected soon on the constitutional challenge brought by Dean and two other homeowners in January.

Win or lose, Dean will never get back his foreclosed house or an estimated $50,000 he invested.
"I've lost my house, I've lost my equity, that can't be reversed and I understand and realize that," Dean said. "The lawsuit is to bring justice back to the citizens of Winona."

This article originally appeared at Watchdog.org.