Rental Inspections: Good Idea, Wrong Implementation

Seems like a slippery slope to us libertarian types. Are there any cities that do this type of mandatory repair?

Dave

Quite a few, actually - mostly the older, losing population rust belt cities.

But I don't see the libertarian argument - how is repairing the code violation more of an infringement of property rights than demolishing the property (current practice)? In the former, you've either maintained or improved the person's property value - in the latter, you've taken whatever value was in the structure (and then charged the owner for doing so via a lien.)

I think the broader question for libertarians is how to deal with neighborhood externalities. Because positive and negative externalities abound with property/neighborhoods, the market is imperfect. For instance, the house next to me has been a slumlord house for the 10 years I've lived here. The owners think the land is going to be worth something someday. So the place looks tired and unkempt and lowers my property value. Because the owner cares little about the house, and mostly about what he perceives the property value to be in 10 years (exorbitant, i've asked) he might let the city tear it down rather than repair it. And then my property value is lowered even further, because I've got an unencumbered view of a parking lot (across a likely poorly maintained vacant lot from my backyard.)These situations abound in our older neighborhoods, where so many of our property owners are looking to hit the lottery someday on their property values.

If his idea of what the property value is going to be were right, perhaps this would work fine for me from a market perspective. But he is dictating the value that I can get from my property, regardless of what I do, and dictating the timeline of when I can get maximal value for my property. Similarly, if he did a beautiful renovation on that house, I would benefit, despite having done none of that work myself.

It's odd to me that we just think of this as normal market behavior when our property market is rife with people waging negative externality wars and trying to capture other people's positive externalities while minimizing their own costs. I would think libertarians would be appalled that the benefits of a person's individual labor acrue to others who do no labor, while the lazy individual's costs acrue to the laborer. (To loosely capture Adam Smith's notion that private property value is ownership + work).

So I think 'imposed repair' is the ideal remedy - one which fixes the market failure without causing other negative externalities.

GK

I believe you have over-simplified the City's ability to repair the houses that it has slated for demolition. Look at the Habitat "restorations" in the Golden Belt district. They tried unsuccesfully to strip the properties down to the "good" wood but one house collapsed on itself while the other was deemed too far gone and suffered the same fate.

If a house is deemed repairable it is taken to Community Life Court where a judge can issue an order to repair. This represents the majority of cases that come through the NIS department. There are several houses and buildings that are too far gone to repair. There are some that $50-60K would not even bring it up to MINIMUM Housing Code.

Also be careful when referring to the ways cities in other states handle code enforcement. We are limited at times by our own State Statutes. Some ideas may be worth pursuing within defined parameters but it still has to pass the political waters (there are legislators state-wide that have property some which can be considered slumlords).

In essence, NIS does everything it can to save houses in Durham but you are basically asking the police to keep the criminal from going to jail. There are people who dedicate their life to that task. Preservation Durham is that group and they are notified of properties that are on the demolition list. They have put options on properties ...they contact the owners...they ask the Housing Appeals Board for extensions (sometimes for owners who choose not to appear at the hearing).

NIS has entered into MOUs (Memorandum of Understanding) on properties throughout Durham from Stuart Dr. to Fayetteville St. to Duke University Rd. We give the owner or purchaser of the property the opportunity to make repairs based on a timeline and securing financing and permits. The goal is to get the properties repaired without the process dragging out for three more years of continued deterioration.

Most of these properties should have been in code enforcement years ago when they could be reasonably repaired. But then again we've had former council members who have owned their share of derelict properties.

I apologize for the length...I have still left out some specifics, but I wanted to fill in some of the blanks in your argument.

The focus should be on building a private Housing Preservation fund, advocating for making the Rental Inspection and Neighborhood Revitalization plans as effective and progressive as possible and involving the stakeholders within the communities as much as possible.

Anon

Thanks for your comment.

I don't believe I have oversimplified the current ability of the city to repair houses. I acknowledge that it is currently a complicated morass of regulatory dead ends. But the point, and this is my same point in response to 'being careful' about referrring to other cities, is that our regulatory environment is not etched on stone tablets. Too often, it seems that too much time entrenched in bureaucracy leaves folks who work in these departments arguing that This Is The Way It Is. As you point out, state enabling legislation is necessary for some more creative practice to be put in place. But that too can be accomplished.

I think you've oversimplified the capability of Preservation Durham to effect preservation and the willingness of NIS to help. I know because I did all my work through Preservation Durham to save houses for 5 years, and had my fair share of dealings with (then) Housing and Community Development. That PD is notified of properties on the demolition list is simply not true. We struggled to get information out of H&CD/NIS that would have helped us save houses. There were specific instances where we entered into agreements with H&CD - such as 618 Arnette, but that was a case where we owned the house, and so H&CD had a legal obligation to talk to us.

I make no excuses for Habitat's inability to do historic renovation - it isn't what they do, and I've documented what they are doing to the houses over in Golden Belt. Removing everything but the the studs, roof, and weatherboards and letting a ~100 year old house sit open like that is not best practice if you are actually trying to save it. "Too far gone" is a hopelessly subjective phrase - anything can be repaired for a price, and folks in gov't should resist letting their own biases color whether a house is 'worth it'.

My point is the exact opposite of 'letting the criminals go free'. It is that NIS does just that, through policy that destroys the house instead of addressing the real problem - the owner (the 'criminal' in your analogy). I argue for policy that punishes the owner and saves the house, because historic housing belongs to all of us as part of our history. That is, in particular, the entire legal framework behind historic districts.

A private renovation fund is a worthwhile tool, generally speaking, but unless the legal/regulatory environment changes, it won't do much, because of the reluctance of slumlords to sell. This reluctance continues to amaze me, but having beaten my head against it for years, I've accepted that slumlords do not follow market rational behavior. A private renovation fund helps with the more rational folks, but they don't tend to own the most threatened houses.

Finally, although I harp on NIS a lot, they are not in-and-of-themselves the problem. If we want to make more than token efforts to save historic housing (which is how I would describe the process of giving more time to problem property owners who have let a house sit abandoned for 30 years and then saying -
"we tried to save it by waiting") we need to change the policy environment, which requires some useful policy from council and state.

GK

Its too bad that there is no accounting for the zoning of a piece of property. I live in an old house on 6+ac with I-2 zoning and the city is now telling me to spend money to paint and fix it up. Now, the house does need repairs to meet the code, BUT, I chose to stay in it in hopes that I will soon sell the property. The zoning makes it impractical to fix it. Again, as owner, I chose to live in it, but now I will leave it this year. When I leave, I will tear the house down.