I’m finding some interesting arguments on the topic. This one from Washington State that says chartered cities like Sioux Falls could implement the rule, especially for APPOINTED positions (Like City Attorney, Finance director, etc);
Most cities probably do not have residency requirements for their employees, even if they can. Is it a good idea to require residency? Residency helps build a bond between employees and the community they serve. The public may expect city employees face the same restrictions, taxes, policies that they do, and that’s only possible if employees live within the same community where they work. On the other hand, requiring residency limits the size of the pool from which good employees come – probably the strongest argument against requiring residency. The smaller the city, of course, the more that becomes an issue. Ultimately, it is a policy decision, one that needs to be carefully considered.
Finally, note that, if the affected employees of a proposed residency or response time requirement are members of a union, this would be a matter that would need to be bargained.
I also find this argument from Minnesota about elected officials being required to live within the jurisdiction, then why not the employees?
Elected officials must maintain a city residency. Under the Minnesota Constitution, a candidate must live in the city for at least 30 days before a city election in order to serve as a mayor or councilmember. If a mayor or councilmember fails to maintain a city residency, state statute provides that a vacancy in office is created.
There are a ton of reasons for and against, I guess my argument would be ‘customer service’. Wouldn’t a city employee who lives in that community have more pride in the job they do? This would be an interesting debate to take up with the Charter Revision Commission and a possible ordinance change.