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County staff to draft ordinance changes after committee flags legal risks in using restrictive covenants on tax-foreclosed lots
Summary
Committee members asked staff to refine a proposal to place restrictive covenants on tax-foreclosed properties to preserve them for workforce housing, citing the need for appraisals and legal review after the Tyler v. Hennepin County decision and related litigation.
Committee members and county staff discussed whether Marathon County can impose restrictive covenants on properties acquired through tax foreclosure to preserve parcels for workforce housing and how to limit fiscal and legal risk.
Supervisor Lemmer summarized HR Finance and Property Committee concerns: the draft language appeared to apply covenants broadly to “all buildable” lots and raised questions about agricultural and forestry land, municipal and county zoning differences, and whether mandatory covenants could reduce a parcel’s resale value. “We wanna think this through before we make any snap judgments,” Lemmer said.
Administrator Leinart and staff described plans to work with Corporation Counsel, the Treasurer’s Office and other departments to propose focused ordinance amendments to Marathon County Code section 3.2. Staff recommended requiring appraisals for parcels considered for covenants and using a more selective, parcel-by-parcel approach rather than a blanket rule. Leinart said the county would likely adapt a template ordinance circulated by the Wisconsin Counties Association and that responsibility for parts of the process might be moved from the Treasurer’s Office to Administration and Corporation Counsel for legal oversight and timelier execution.
Chair Robinson and other supervisors cautioned about statutory timelines for tax-deed processes and about properties with environmental liabilities; Robinson said counties historically were slow to pursue tax deeds, but quicker management of delinquent parcels increases the chance that sale proceeds exceed owed amounts and thereby raises potential takings claims. Staff noted ongoing statewide litigation that seeks retrospective recovery tied to the U.S. Supreme Court’s Tyler v. Hennepin County case; committee members discussed that plaintiffs in similar suits have sought recovery going back multiple decades.
No ordinance or resolution was adopted at the meeting. Staff were directed to draft recommended amendments to section 3.2, incorporate appraisal requirements and a process for parcel triage, and return with proposals for committee and county-board consideration within the coming weeks.
