Tenant restrictions for College rental property

[Jamie Waugh]

Wondering if any of you have had similar experiences. 

Here in Pittsburgh there is a community organization that is "policing" student rental properties and reporting landlords to the City zoning officials. 

There was a law/ordinance put in place a few years ago that states there cannot be more than three unrelated tenants living in the same single family home. On the surface, this seems like a way for long time residents to control who is living in their neighborhood (University of Pittsburgh is right in the middle of the city and investors are buying up old homes from long time residents and changing the community). I can appreciate residents wanting to keep the neighborhood clean, etc.. but it's hurting investors. We have a number of houses in the area which are between 4-6 bedrooms that we can either no longer get tenants for (students fear they will get kicked out mid year - which has actually happened a couple times) or we are renting a 6 bedroom house to only 3 tenants for half the rent. We have two houses where we are pretty much just covering our monthly expenses. My partner has talked to an architect who is familiar with changing single family homes to multi-family in the city and he thinks that a petition to change the zoning of the house will fall on deaf ears and we don't have much of a hope for that.

Although the 3 tenant rule has been around for a while, it has only really started to be enforced recently. So with that knowledge, it will become hard to sell the houses for the amount of money we have put into them. Regular families typically are not moving into these areas, and no investor is going to pay full price for a house they can only get half rent from. 

We are feeling stuck right now and looking for any possible solution to this ordeal. Any input would be greatly appreciated!