Just a Landlord

I walk the neighborhoods where are properties are located as often as I can. My walks are in the two to five mile range. It is a good way to combine some light exercise with managerial work.     We also do exterior surveys every spring to set the agenda for our summer efforts.  I try to combine the surveys and walks as much as possible.

You can learn things about a neighborhood on foot that you would never see driving through at 25 MPH. This gives me a more insightful way of checking up on maintenance crews, properties and deciding on properties to purchase. Yes, we are buying again, but that is another story for another day.

I noticed two major things this spring while doing my neighborhood walks/exterior surveys of our properties.

Vacant and abandoned housing

The first is there is a large number of vacant/abandoned/foreclosed properties throughout the Southside (53204 & 53215) that are not listed for sale on MLS and do not have for sale signs.

I began writing down the some of the addresses. When I get back to the office I look to see if they are listed for sale on MLS.  If not I will run ownership on a few of them.

For those not listed on MLS, almost inevitably ownership records show that they are owner occupied.  More times than not they are not registered as vacant buildings with the Department of Neighborhood Services.  Ironically a few had Christmas decorations in their windows.  Many had orange electric company shut off tags on their front doors.

Being a curious lad I look up a few of the listed owners on the court system.  A lot of them show no foreclosure actions naming the listed owners.  Perhaps the owners received notices from their lender and just assumed they were going to be put out on the street?  Who knows.

While my little bit of info gathering during my walks is by no means a statistically correct study, it certainly appears to me that the foreclosure mess is larger that reported and  we are not anywhere near the bottom of the crisis.

Condition of owner occupied housing compared to rentals

The other thing I noticed is if a house is in truly deplorable condition or needs major repairs such as failed roofs or porches,  it is almost always owner occupied or an abandoned formerly owner occupied property .

Inspectors doing fire inspections etc on our rentals will see a couple of blown off shingle tabs or a downspout that isn’t sealed to the sewer and write an order. Yet the owner occupied properties will have failed porches, missing siding, roofs that needed to be replaced five years ago, yet no city orders.

I am not the only one who witnessed this phenomena.  Click here to listen to Mary Hennen, Senior City Assessor’s take on the difference of conditions between owner occupied and rental housing.

We need to assure all properties are held to the same standards by code enforcement, not just rentals.

http://www.twincities.com/stpaul/ci_20410240/u-s-house-committee-seeking-details-over-st

With apologies to the Steve Miller Band for the title …

This past week we received a notice of  a $52.05 “fee” being assessed for “improper care of a discarded electronic device” at one of our properties.  Wow! They revert to five dollar words to say you put a radio in the garbage can.

Upon review it seems  our tenant put a radio/CD player in the green garbage cart.   Either a scavenger or DPW took it out of the cart and left it in the alley.

As I drove around the Southside this weekend I noticed a bunch of small electronics laying next to garbage carts with little orange stickers. So despite the bill saying the property was posted, it appears the only posting were these stickers that mostly face away from the house.  To make it worse the property owner does not get notice by mail until the fee is assessed.

This must be one helluva profit center for the city.

I really wish city officials were there to hear the tenant’s reaction to having this charge passed on to them.

Milwaukee Code:

79-2-13-b. No person may place an electronic device in mixed municipal solid waste or discard or otherwise dispose of an electronic device except by delivery to an electronic device collection or recycling facility.

State law that defines what an electronic device that is prohibited from being placed in the garbage:

1. A peripheral, as defined in s. 287.17 (1) (j).

3. A facsimile machine.

4. A digital video disc player.

5. A digital video player that does not use a disc and that is not a camera, as defined in s. 287.17 (1) (a).

6. A video cassette recorder.

7. A video recorder that does not use a cassette and that is not a camera, as defined in s. 287.17 (1) (a).

8. A covered electronic device, as defined in s. 287.17 (1) (f).

9. A telephone with a video display.

10. Another kind of electronic device identified by the department under s. 287.17 (10) (i).

The Wall Street Journal Reports on the dismissal of Manger v. Gallagher:

How far will the Obama Administration go to impose racial lending quotas for banks? Far enough to lean on St. Paul, Minnesota to deny the Supreme Court the chance to rule on whether the government’s actions are legal.

The city of St Paul withdrew their petition to have the US Supreme Court intervene and stop the case over their alleged discriminatory housing code enforcement. This, less than three weeks before the Court was to hear oral arguments.

From an article in the St Paul Star Tribune:

If you have been a reader for a while you are aware of the St Paul landlords’ case against their city’s code enforcement department.  The case is now at the US Supreme Court.  Here are a few updates and articles:

The following article is from RoofLines

At issue in the case, Magner v. Gallagher, is whether the Fair Housing Act prohibits the full range of discrimination in housing that many Americans still face in the 21st Century.

The case comes out of St. Paul, Minnesota, where a group of landlords who rent affordable homes to racially diverse tenants say the city is driving them and their tenants out of town in favor of less affordable and less diverse owner-occupied housing. The Supreme Court took the case to decide, not whether these facts are true but, rather, assuming they are true, whether the city’s alleged conduct violates the Fair Housing Act absent proof that the city purposefully intended to exclude people of color from its borders.

The Supreme Court Briefs and commentary are posted on Ademocracy

II. Factual Background

…..

This case arises from the City’s adoption of a policy to nonetheless limit its stock of private low-income housing, including by forcing respondents to abandon or sell the housing they provided, in favor of owner-occupied housing. The City pursued that specific policy through the selective and often illegal application of its housing code in a manner designed to produce the closure or abandonment of private low-income rental properties either directly, through condemnation, or indirectly, by rendering the maintenance of the properties uneconomical.

The City’s actions included targeting respondents’ properties for “code to the max” and “forced sale” treatment, falsely labeling those properties as “problem” and “distressed” housing, charging those properties with false code violations, failing to provide respondents with timely notice of claimed code violations, and condemning the properties without a sufficient basis.

Sound similar to Milwaukee’s  UWM rental inspection program

The city of Red Wing, Minn. is enforcing a rental property inspection law that requires landlords and tenants to open their doors and submit to inspections of their private property in order for the landlord to receive a license to rent the property.

Under Red Wing’s rental inspection ordinance, it is easier for the government to force its way into the homes of law-abiding citizens than it is to search the home of a suspected criminal.  But the U.S. and Minnesota constitutions protect everyone, not just criminals.  Red Wing’s inspection mandate is unconstitutional.

via The Institute For Justice

A reader of the ApartmentAssoc Yahoo Group asks:

Am I correct when I say a 2 story 4 unit building w/ a basement would need 7 co detectors installed.  Can they be combo smoke/co detectors or do we need separate detectors for each function?  Any help would be appreciated…..Thanks

My reply cleaned up a bit from the original is below As of April 1st, 2010 Wisconsin began requiring CO detectors in all multifamily buildings. As of February 1st, 2011 the requirement expanded to all residential buildings including owner occupied single families.  There are a few exceptions such as units that have electric heat AND do not have attached garages AND do not have gas stoves; as well as those with sealed combustion furnaces and water heaters that are inspected regularly.But most WI residential buildings now must have carbon monoxide detectors.

Where to install and how many carbon monoxide detectors are required depends on a number of factors. Continue reading »

It is a sad reality that many communities use code enforcement to promote an illegal racially motivated agenda.  The ACLU outlines their view of the problem in an article, Renting While Black.

We see it here in Milwaukee where at least one Alderman appears to use Aldermanic Service Requests in a way that only the ku klux klan would be proud of.

Even if so called community leaders are not actively involved in the racially motivated inspections, a complaint based code enforcement  that permits anonymous exterior complaints opens the door for neighbors to promote their biases through code enforcement

There have been a number of federal lawsuits over the years alleging racially motivated code enforcement.  A list of some of those cases can be found here.

Typically if a case gets to the point that the  property owners may win the municipality quickly and quietly settles.  Usually not for the full compensation for the harm caused by the racially motivated enforcement.  But lets face it, it takes a lot of financial and mental tenacity for a small landlord to slug it out against cities with seemingly endless resources to defend their bad behavior.

However there is one such case that the landlords have held on for something like eight years now.  After the Federal Eighth CIrcuit Court of Appeals issued an opinion favorable to the landlords, the city of St Paul has petitioned the US Supreme Court for review (link to petition for review).  You can read the amended original complaint that started this case here.

If the Supreme Court hears this case it will have a huge impact on all landlords who follow fair housing practices, i.e. don’t reject tenants tenants simply because they are a different color, nationality, religion, etc than their neighbors.  One must really respect these property owners for the amount of sacrifice they have made to get this far.

The case alleges that St Paul housing inspection programs were used in a racially motivated manner to force racial minorities out of St Paul and that such actions violated the Fair Housing rights of the occupants.  A very interesting point is a number of city employees including inspectors are on the hook personally in this suit.  From a legal perspective they must defend themselves as they and their employer have disparate interest; for the city to win if the allegations are proven true they must claim rogue employees acting outside of the law.  For the inspectors to win they must argue that they were following instructions that they believed were legal. The inspectors may have a hard time claiming ignorance however as the owners had provided the inspectors with documentation that the inspectors’ acts were contrary to Fair Housing, yet the inspectors continued with their agenda.  At some point the inspectors will have to name their union as third party defendants as the union failed to stop management from allowing/forcing them to violate the rights of the tenants and owners

From my conversations with two of the plaintiffs over the past six or seven years they seem to be just a handful of hard working landlords who independently found themselves on the losing end of government behaving badly.  The current case is a consolidation of three or four cases that started independent of each other, but the claims were so similar that the federal court combined them.

Most of the cases claimed RICO (racketeering) on the part of the city employees. The RICO elements were dismissed due to procedural errors.  I’m certain that some future case will go to trial on that issue, whether in St Paul or somewhere else.

With very few exceptions, all single family and duplexes in Wisconsin will be required to have carbon monoxide detectors installed as of February 1st 2011. You can read about the multi unit building version of the CO detector law here

The important part of the law for most of us is:

“101.647(3)(a) The owner of a dwelling shall install a functional carbon monoxide detector in the basement of the dwelling and on each floor level except the attic, garage, or storage area of each dwelling unit. A carbon monoxide detector wired to the dwelling’s electrical wiring system shall have a backup battery power supply. Except as provided under par. (b), the occupant of the dwelling unit shall maintain any carbon monoxide detector in that unit. This paragraph does not apply to the owner of a dwelling that has no attached garage, no fireplace, and no fuel-burning appliance.”

“(b) If any occupant who is not the owner of a dwelling, or any person authorized by state law or by city, village, town, or county ordinance or resolution to exercise powers or duties involving inspection of real or personal property, gives written notice to the owner that the carbon monoxide detector is not functional, the owner shall provide, within 5 days after receipt of that notice, any maintenance necessary to make that carbon monoxide detector functional.”

While the law does not contain a penalty for not complying, failing to have a working CO detector may result in additional liability should a problem occur at your property.. The law was passed and signed into law last year.