December 21, 2014

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South Euclid blazes way with housing registry

SOUTH EUCLID — On a well-kept block, the vacant, foreclosed house at 14121 Harwood Road stands out.

On the front porch, unused phone books are rotting, and the grass on the front lawn is nearly a foot high. Copper piping in the basement has been stripped, and plywood on the basement walls is buckling. A dusty property tax bill in the mail slot says $28,730 is due by July, 14, 2010.

In contrast, next door and down the block, contractors are mowing residents’ lawns.

“It’s hard for them, probably, to justify spending money on their house when they see the house next to them falling apart,” said Sally Martin, South Euclid’s housing director, as she stood in the vacant house on a recent day.

Supporters of South Euclid’s vacant house registry credit it with giving residents more incentive to improve their homes despite nearby foreclosures and for improving neighborhoods.

“The idea is to create stable neighborhoods and inspire confidence in the residents,” Martin said. “So that they feel they can invest in their homes and that it’s a good investment to stay in South Euclid.”

Partly because of the registry, the Harwood Road house, vacant since 2008, is not a lost cause. Improvements are scheduled to be made by the buyer or seller through the registry. The registry — credited with bringing 200 houses up to code and another 100 into stages of compliance since its enactment in March 2010 — is the first in Ohio and a model for a registry expected to be approved in Lorain soon.

An April 2 vote on the registry by Lorain City Council members was delayed due to concerns of local bankers about how application and enforcement would affect them. Mayor Chase Ritenauer said wording of the ordinance is being tweaked and it may be voted on next month.

“We want to make sure it’s the right medication for the symptom,” he said.

South Euclid’s registry requires owners, lessees or parties in control of vacant homes to pay an annual $200 registration fee and be responsible for keeping properties in good condition. That includes making monthly property inspections, according to the registry ordinance.

Before the property can be sold, the entity controlling the property must obtain an inspection certificate to be given to the buyer. If the property is not up to code and the buyer agrees to make repairs, an escrow account of at least $1,000 must be paid by the buyer to fix violations. Violators of registry provisions face fines of between $200 and $1,000 per violation.

Title transfers are blocked until the accounts are set up. If the property meets minimum requirements, an occupancy certificate is issued and the buyer has six months from the title transfer to make repairs.

Compared with Lorain, South Euclid’s foreclosure problems can seem tame. With about 22,000 people, the city has approximately one-third of Lorain’s population.

In March, 459 homes in Lorain were in foreclosure, according to RealtyTrac, a real estate website that tracks foreclosures. RealtyTrac didn’t have statistics for South Euclid, but a Case Western Reserve University website that tracks Cuyahoga County foreclosures reported the city had 49 foreclosure filings in February, a rate of one in 190 homes. South Euclid had 299 filings last year.

Despite its relatively small size, foreclosures had become a big problem in South Euclid by 2006, the year before the housing collapse and the start of the recession, said Paul Kowalczyk, the city’s building commissioner. Rather than deny the problem like some communities, Kowalczyk said city officials spent the next four years devising ways to reduce it, including creating Martin’s job in 2008 and eventually creating the registry.

“It’s taken a lot of years to get where we’re at,” Kowalczyk said. “It’s a big undertaking.”

A side benefit to the registry has been an increase in construction permits for work on existing residential homes since the registry was passed, Martin said. In 2009, the year before the registry passage, 889 building permits were issued with total construction valuation of nearly $4.2 million. Last year 1,845 building permits were issued with a total valuation of about $6.6 million, increases of 107 percent and nearly 58 percent respectively.

Whereas a seller might have just slapped a coat of paint over a moldy home in the past, sellers now realize homes must be up to code before sales can go through. The escrow money also weeded out incompetent contractors.

A few banks or their middlemen, concerned about their reputations, are bringing homes up to code before sales since the registry’s passage.

“That was unheard of,” Martin said.

Kowalczyk credits the success of the registry to strict enforcement. He said buyers and sellers frequently seek exceptions.

“If you don’t waive anything for anybody, words gets out, this is the way the ordinance is written (and) this is the way it is going to be administered and we’re not making special exceptions for anybody,” he said. “You really do have to take a hard line.”

Strict enforcement also includes follow-up inspections. Two building inspectors spend about 30 percent of their day doing vacant building inspections and issuing occupancy certificates, according to Martin. One administrative assistant does paperwork and fields calls regarding the registry, about 65 percent of his day. About one house is inspected, or re-inspected, each day.

Kowalczyk said for Lorain’s registry to be successful, city officials must provide adequate staffing.

“A lot of people feel, OK, you passed an ordinance and everything will be fine, but it takes a lot of resources out of your department,” he said.

Lorain’s Building and Engineering Department has three building inspectors, one electrical inspector and two administrative assistants, according to Richard Klinar, acting chief building official.

Ritenauer said if the registry is approved he’d consider hiring additional inspectors with federal taxpayer money through Lorain’s Community Development Department. Councilman Dan Given, D-at large, proposed the registry. He said council members are willing to spend money to hire additional inspectors if that’s what it takes.

Given, a councilman since 1994, said he hopes the registry will hold buyers and sellers of vacant properties accountable while inspiring homeowners to improve their residences.

“I challenge anybody to drive through the city of Lorain and say that the way the community is right now is acceptable,” he said. “It’s not. We need to do something about it.”

Good housekeeping

Begun in 2010, South Euclid’s first in Ohio vacant housing registry seeks to keep foreclosed homes up to code by holding buyers or sellers responsible for upkeep and is a model for a proposed registry in Lorain. Among the registry requirements:

• All vacant buildings are registered annually and must be kept in acceptable condition and regularly inspected.

• Violations are corrected by the seller or assumed by the buyer.

• If the buyer assumes responsibility for repairing violations, an escrow account must be set up with a title company to ensure work is done. Funds are released after the city confirms the violations are repaired.

• Properties with violations cannot be occupied, and title transfers are blocked to ensure compliance.

To see a copy of South Euclid’s vacant housing registry, go to www.cityofsoutheuclid.com/building-housing/housing-news.html and click on the vacant property registry ordinance.

Source: City of South Euclid

Contact Evan Goodenow at 329-7129 or egoodenow@chroniclet.com.