Construction Permit denied for a DIY Landlord?

[Jeffery Smyter]

I currently own a single family rental in a suburban neighborhood.  Recently I went to obtain a permit to make some improvements to the property.  I was told that permits are only issued to owners who reside at the property or to contractors.  Since I do not fit either criteria, I was unable to obtain a permit.  There are many other rental properties on my block, and all too often improvements are made by the homeowners without a permit.  Now I am understanding why.

My questions: Is this a common scenario?  Do other localities have the same stipulation?  What is the rationale behind this?