Presale home inspection possible

7/31/2006

The signs of exterior decay are easy to detect in the old neighborhoods around Toledo's core - houses settling into their foundations, gutters dangling, grass growing tall in the yard.

Less easy to see, but probably more important for health and safety, are the conditions found inside Toledo's aging housing stock.

A proposed law that has been under consideration by a housing task force since last summer would require the city to certify homes as "habitable" before the deed can be transferred.

The proposed ordinance - known either as "point-of-sale" or "minimum habitability" - was scheduled for a vote of Toledo City Council last Tuesday but was pulled at the last minute and referred back to Mayor Carty Finkbeiner, who vowed to work with advocates on both sides to find a compromise.

The controversy over the proposed ordinance has split the housing community with advocates for the poor on one side and the real estate industry on the other.

Supporters of the ordinance say Toledo's current laws aren't adequate to protect people from unscrupulous property owners and landlords.

"For a community like Lagrange that's an active group, this would be a godsend," said Terry Glazer, the executive director of the Lagrange Development Corp., and the chairman of the Greater Toledo Housing Coalition, which proposed the law.

But advocates for the real estate industry say the problem has never been quantified - and neither has the cost of the new bureaucratic burden on Toledo taxpayers.

"We're interested in a good, healthy housing stock," said Paula Hiett, chief executive officer of the Toledo Board of Realtors.

"If we're talking about 100 homes out of 5,000 - and I'm just pulling this out of the clouds - you have to wonder how much effort should be put into this," she said.

Patty Camacho, the lobbyist for the Property Rights Coalition, which represents the Realtors and other business groups, said the city does not have enough inspectors to enforce current codes.

"The administration and enforcement scheme of the ordinance is overly cumbersome and will require added staff and expense that the city can ill afford," she said.

The proposed law would require sellers to obtain a private inspection, at an estimated cost of $200 to $300, and then have the city issue a certificate of minimum habitability, for a fee estimated at $50. Officials said the standards would be minimal, focusing on good structural condition, and furnace, plumbing, and electrical systems in good working order.

As originally submitted by former Mayor Jack Ford to city council last year, the ordinance would have applied only to homes being sold by nonoccupants.

The intent was to protect unsuspecting or desperate homebuyers from unscrupulous sellers, or to protect renters by making sure homes traded among investors are in good condition.

A Rental Housing Task Force, appointed last year to draft a compromise ordinance, met over an eight-month period and produced a revised version, renamed the "minimum habitability" ordinance - but without agreement from the Property Rights Coalition.

Ironically, the major difference in the new version was a change sought by the Property Rights Coalition - that it would apply to all residential property transactions, not just nonoccupant sales.

The measure was set for a vote of council last Tuesday, where it appeared headed for certain defeat. However, Mr. Finkbeiner, who has not taken a stand on the proposed law, asked to have the ordinance referred to him so he could try again to find common ground among housing and real estate advocates.

"I'm really shocked that we've got the mayor's ear," said Kim Cutcher, executive director of the NorthRiver Development Corp., which represents the historic Vistula area and many of the modest low-income neighborhoods of North Toledo.

"I'm thrilled. The mayor has talked about how he wants to create pride in the community. This is speaking to creating pride in the community," she said.

Toledo would not be the first to require presale inspections.

Detroit has had a presale inspection law in place since the 1970s.

The inspection is performed by a city inspector, at a fee of $295. An official of Detroit's buildings department acknowledged that it is sometimes ignored - exactly the outcome local opponents predict for Toledo.

Some other Midwestern cities with presale inspection laws are Milwaukee, St. Paul, and St. Louis.

St. Louis' law requires inspections for all changes of ownership or tenancy in any of its "housing conservation districts," which account for about two-thirds of the city.

The fee is $70 for an unoccupied unit, and $110 for an occupied unit.

In Ohio, several Cleveland suburbs require presale inspections: Cleveland Heights, University Heights, and Bratenahl.

In University Heights, the seller pays $75 for a single-family home inspection, and must be present or have a representative present for the one to two-hour inspection.

If there are violations, either the buyer or seller must repair the violation or put enough money in an escrow account to cover the cost of repairs.

A request from The Blade to Mayor Finkbeiner for a comment on his plans for the ordinance was referred to Tom Kroma, the mayor's director of the Department of Neighborhoods, which enforces the city's housing code.

"It's not going to be the fix-all," Mr. Kroma said. "It's going to be a tool that should improve over time the housing stock.

"We would like to see something developed that's going to help the neighborhoods," he said. "At the same time, we don't want to see a disincentive."

The costs to the city and to property owners are two major issues raised by real estate investors and representatives.

They point out that the city would have to get in the potentially costly business of certifying inspectors, and then would have the responsibility of issuing the new certificate of compliance or habitability.

Council has never been given a clear explanation of the costs of a presale inspection program - even though it was on council's agenda for a vote last week.

A law requiring all homes to be inspected would be a daunting undertaking: In 2005, there were 4,787 dwellings of one to three-family residences sold in Toledo, according to the Lucas County Auditor's office.

The Greater Toledo Housing Coalition said its original plan was more workable - to require inspections only of properties being sold by investors. The exact number of those was not known.

But Linda Furney, a lobbyist for the housing coalition, estimated it would require only the equivalent of a half-day employee to manage the inspection certificates.

Contact Tom Troy at: tomtroy@theblade.com or 419-724-6058.