I attended a meeting regarding the soon to be expiring rental property ordinance last evening here in Battle Creek. There was much talk about this ordinance, and without getting into the details of the ordinance or its purpose, l feel it is important that one first take a few steps back and examine the condition as a whole, and look at the larger picture on the road to municiple prosperity in Battle Creek.
On a national level, we have several issues creating a major shift in our economy. We have a landslide of foreclosures in the past 5 years across the country. On top of that we have a whole generation of people that put their retirement future in the hands of Wall Street, and they are now stymied and reeling with an uncertain future.
The huge numbers of foreclosures has resulted in a large populace that will not qualify for a mortgage for several years, and the vagaries and roller coaster of stock investing have investors looking elsewhere than Wall Street.
These two factors together create a perfect environment for the Real Estate property investors. Prices on Real Estate have never been lower, and nor has the demand for rental property been higher due to displaced former homeowners.
Now let's examine the mindset of a residential property investor. They want to place their investment
money in something safe, and something that will not only create income, but offer a return on investment not seen elsewhere. It is long term investment plan. When one is looking to acquire a foreclosed home for this purpose, they are looking as remodeling expenses, as well as marketing expenses and general cost of operation as a landlord.
When a City introduces a rental property ordinance, and other neighboring cities within close proximity do not, the natural inclination for a property investor buying new property is to acquire property where such ordinances do not exist. This is happening to Battle Creek as we speak.
Prior to the existing ordinance, there was a rental property ordinance numbered 1460 which was in existence, yet not enforced by the City. Without enforcing the existing ordinance, the City sought to introduce a new ordinance numbered 1463 which had more restrictions on landlords and placed the responsibility for a tenants conduct on the shoulders of the landlord.
Over protest from landlord associations in the area, the ordinance was passed and went into effect. However a sunset clause was written into it to have it expire or be reviewed for renewal in January 2011.
Over the course of the few years this ordinance has been in existence, the increase of vacant homes in Battle Creek as been on the rise, much higher than in neighboring areas such as Pennfield, Harper Creek, and other communities such as Athens and Marshall. Investors finding it easier to place their dollars outside of Battle Creek and in other parts of the County have done so.
Following on the heels of this economic change, the same department that enforces the rental property ordinance began aggressively enforcing the Vacant and Abandoned Property ordinance within the last year. Why? Because there has been an increase in these types of properties since the introduction of 1463, and much of the blame is placed on the rise of foreclosures, rather than look at the introduction and enforcement of this ordinance and how it has impacted the sale of Real Estate in our City. 
When a bank selling a foreclosure has difficulty selling the home, they do not invest money into fixing the place up. Instead, they reduce the price, and continue to do so until they finally sell it. This practice results in lower property values and assessments in the long run for surrounding homes, and paints a dark future economy for the City that depends on part of its revenue from property taxes.
So, at this time it would perhaps be better to retire the Rental Housing Ordinance 1463, and return to a more open and welcome system to encourage investors to spend their dollars here and improve our community. This could even open the doorway to new construction projects, and development, thus creating more tax revenue in the City's future. As a local Realtor, I am concerned about the prosperity of my community, and I would like to see all doors open to investors and owner occupant buyers alike, as it keeps the properties in use and occupied, and is far superior to having them vacant and unused.
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