Only a few times in my life have I gotten riled up enough to attend a public hearing about an ordinance change.  This week has joined one of those occasions.  One of the council members for the city of St. Paul has proposed a change to the city's current vacant housing ordinance.  A change that I believe is going to really hurt the housing climate in St. Paul.

St. Paul currently requires vacant buildings to be registered with the City.  There is an annual fee assessed if your house gets on the vacant building list.  Two levels of vacant buildings are defined, one is "condemned" and needs a code compliance to be habitable again.   This code compliance requires a $5000 bond to even get the city inspectors out to determine what has to be done to upgrade the home.

I like to give people the benefit of the doubt, so my assumption is that this vacant building ordinance was designed to help the City identify problem properties or those likely to become so.  An effort is being made to keep the housing in good repair by the vacant building regulation.

The new proposal would modify the vacant building ordinance to require a certificate of occupancy or compliance be issued by the City before the title can be transferred.  My mind always goes to practical application.  Now this year, in our area, we are experiencing one of the highest markets of foreclosed and vacant properties ever.  These homes have been abandoned by their former owners and taken over by lending companies who know nothing about property management and many times nothing about the effect of cold on St. Paul houses.  Many of these properties are landing on the registered vacant buildings list.  With the new proposal, the banks are stuck with the houses unless they jump through the hoops the City of St. Paul requires for the house to be given a certificate of occupancy or compliance.  

Does it make sense that lenders who have already lost thousands of dollars would pour thousands of dollars back into a house to get that prized certificate?  It doesn't make sense to me.  If I was the lender, I wouldn't put money into fixing a house that may or may not sell in the future.  Not to mention that lenders don't know the first thing about fixing a house for resale.

The traditional home buyer cannot get a mortgage on a house that is not considered "compliant" by the City or does not have a certificate of occupancy.  The "rehabber" who has funding sources to buy these vacant buildings, won't be able to buy the homes either because the title cannot transfer until the repairs are done to meet the City criteria.  It seems like a lose/lose scenario to me. 

What is going to happen to these vacant buildings that can't be sold?  Rehabbers will move on to other projects that are not vacant, but the banks will be stuck.  The houses will continue to be open to vandalism, copper theft, squatting, and crime.  The more time vacant with no new owner to love the houses will make the vacant buildings deteriorate.  

I just don't get why the council is even considering such a change.  It's a complete mystery to me.

In the event you want to attend the public hearing, it's Wednesday, February 20, at 5:30 PM on the third floor of City Hall at 15 West Kellogg, St. Paul, Minnesota.