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City code enforcement rethinks rental housing strategy

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Indianapolis code enforcement officials will have to rethink their strategy for cracking down on negligent landlords after the Legislature came close to banning any city or town from collecting fees for rental inspection programs.

The long-term issue of rental-property regulation will be taken up by a summer study committee, but in the meantime, a one-year moratorium has been enacted on any new fees. The moratorium, which expires July 1, 2014, removes the city’s first, and probably only, option for funding a rental-housing registry because the Department of Code Enforcement is entirely funded by fees.

Indianapolis had considered setting up a registry, which would allow the city to more easily track down property owners in the event of an emergency or code violation.

“We’re just kind of regrouping,” Department of Code Enforcement spokesman Adam Baker said. “We want to make sure when we move forward with an initiative that it’s the right thing to do.”

Baker declined to answer questions regarding the cost of the registration fee or whether a regular inspection program was in the works before Indianapolis Rep. Mike Speedy introduced his rental-property legislation.  

The delay is a disappointment for southeast-side neighborhoods, which have been pushing the city for years to set up a rental-property database, Republican City-County Councilor Jeff Miller said. The idea is that a database would allow the city to connect the dots among problem properties and levy larger fines or bring a nuisance case against the landlord, who are often veiled by different ownership entities.

"It's just really hard to get your hands around the problem," Miller said.

Speedy, who works as a consultant to apartment-complex builders, introduced his bill in response to actions by the town of Merrillville, which imposed a $100-per-unit registration fee on landlords and planned to spend the money on its police department.

Fourteen other cities and towns have rental registries and inspection programs, but in most cases the fees don’t even cover the cost of maintaining databases and fieldwork, said Matt Greller, executive director of the Indiana Association of Cities and Towns. State statute already bars government from generating a profit on user fees, he added.  

Speedy, a Republican who previously served on the Indianapolis City-County Council, said that if cities want to regulate rental housing, they should cover the cost with property-tax revenue.

That’s not the direction local government is headed, however, especially with the state’s constitutionally mandated property-tax caps, Greller said. Legislators have urged local governments to look to other sources of revenue, including user fees. “That’s what’s happening,” he said.

Indianapolis already has about 15,000 abandoned houses and lots. A rental-inspection program could keep that number from growing, said Lisa Abbott, director of housing and neighborhood development in Bloomington.

Bloomington, where 67 percent of housing is rented, has the largest rental-inspection program in the state. It is funded by fees paid by property owners. Abbott believes it has helped prevent the problem that Indianapolis officials raised at the Statehouse, in which rental property becomes so dilapidated no one will live there and the owner abandons it.

“You will not drive down any street in Bloomington and see multiple boarded-up properties,” Abbott said.

The Indiana Apartment Association, which represents owners of large multifamily complexes, contends that local regulations are redundant to the inspections that are already conducted by lenders and, in the case of subsidized housing, federal regulators.

Cities are also free to enforce whatever health and safety codes are already on the books, apartment association President Lynn Sullivan said.

If single-family rentals, often owned by out-of-town investors with no on-site management, are creating problems, cities should find a way to deal with them separately, Sullivan said.

The apartment association has suggested allowing landlords to opt out of local regulations if they can show proof that their property has been inspected by a bank or other government agency, Sullivan said. “That makes a lot of sense because the cities, if they are having trouble with properties, they could concentrate their efforts and resources on those.”

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  • When do landlords get to protect are rights
    These houses are being bored up because this job is so much stress. I have talk to landlords who have walk away cannot handle these people. The tenants need to held responsible for their actions. As stated before my address is on tax records and do not want it on a registry where a tenant can get a hold of and effect my family life their is a reason we do not give are addresses to tenants it is to protect are security.
  • Already Pay extra
    Rental property owners already pay double the taxes that a similar owner occupied house would pay so don't make the excuse that you need some kind of fee to do the job. A major part of the problem with abandoned property is that over the years it has become difficult to hold tenants accountable for the lease they signed. I recently had a tenant who would not pay and told me on several occasions to sue them. When we did(we had to hire an attorney because we were out of the country) they waited until the day before the hearing and got a 5 week continuance, they did not show, moved out, trashed the place, stole the cabinets(the police said we could not prove it was them that stole the cabinets) so we were out months of rent with no possibility of collecting from these deadbeats. Maybe if the local government would put more focus on punishing the deadbeats instead of beating up on landlords we would not have so many abandoned properties.
  • Health and hospital
    In Marion county, Health and Hospital corp is the entity responsible for enforcing 'housing and neighborhood" (health) laws that are already on the books. They perform these services under contract for the City. This part of H & H is a total joke and poster child for inefficient bureaucracy and patronage hiring. This goes back to the establishment of Unigov. DCE knows this, and is trying to wrest control of these important enforcement functions from H&H's grasp, but has no budget to build their machine. Instead of creating a new system based on user fees, DCE/Ballard need to either hold H&H accountable to perform, or find a way to transfer the funding/responsibility that currently lies with H&H to a competent City agency. It's hard to fathom how screwed up H&H Housing & Neighbohood Health really is - check out their website for a sampler.
  • What about the property tax records
    Why should we create a second database for registering owners when the owner should already be listed on the property tax records? Sounds like wasteful government redundancy to me.
  • health department
    we already have at least one department that is supposed to watch this - Marion Co. Health Department. http://mchd.com/hanh.htm maybe they should do there job? I am sure other locals have the same systems in place. this TAX (yes it is a tax on property owners) will do nothing but create more do nothing bureaucracy and increase rents. enough already!
  • More Fees is not the answer
    Adding more fees ultimately just raises the rents anyway, I agree. It's just the case of another gov't agency trying to fund itself using gov't power to make us pay.
  • $$ how much more do they want from us?
    I want to believe that the people pushing for this registery are trying to help but they are going about it in the wrong mannor. I own multiply property in the city and adding more fees to my already high property taxes is not the answer. As a landlord I'm already paying double the taxes as the home owners around me. Article after article in the IBJ Indianapolis residents ask for afordable housing but yet turn right around a vote for politicans who raise taxes. Every time you raise the taxes/ fees accossiated with running a rental property business those cost get shared with the tenants. I just recently had two properties taxes increase by 25% thanks to yet another reassessment. (3rd on in 3 years) Taxes need to be based on what I pay for a property and not some macial number an assessor says it worth. All the incenties for property owners to improve their parcels are taken away when they know you will just raise their taxes after every little improvement. When are going to start making NON-PROFIT organization pay their share in taxes?? Not excluding churches
    • Excessive regulation
      Another well intentioned but over-reaching effort by local government. We need to enforce the laws and regulations that we already have rather than create more laws. As a wise man once said, "common sense is not so common."
    • Rural vs. Urban Issues
      Seems like yet another issue that highlights the State Legislature's lack of understanding when it comes to urban issues. Unfortunately, although the urbanized areas are, and will continue to be the economic drivers of the State, Indiananpolis and other urban areas will need to step up their game to educate members of General Assembly.

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