Friday, February 17, 2012

Neighborhood leaders must stand up for neighborhoods.

Neighborhoods, if they are to turn themselves around, must embark on an education campaign for the new city council members and encourage them to roll back city ordinances and policies that are holding neighborhoods back.

This city must return to a repair order based enforcement policy where homeowners are provided with specific repair orders. All communities agree that property owners must maintain their properties. However, when city policy encumbers or denies home ownership, or the ability for one to get a mortgage, those policies must end.

The VBML, vacant building maintenance license, may have been a good idea 15 years ago when it was first approved. The idea that long-term owners of substandard (structurally dangerous) property should be required to put that property in safe condition so we protect our first responders was a sound and needed idea and has community support.

The problem is, that this once useful ordinance, has been perverted and abused by the city of Cincinnati under the direction of Mr. Cervey, Sean Minihan and Ed Cunningham, to become nothing more that a tool for their department to demonstrate “need’ for federal funding so a bloated agency that does more harm, than good for neighborhoods, can continue to exist.

A number of things have occurred since the original inception of the VBML program. We had a significant run up in real estate values. Home mortgages were passed out to people without financial means to afford them and under less than honest credit applications. Investors had almost endless line of credit to play ‘monopoly’ in neighborhoods. That enabled them to buy houses, mortgage them to the hilt, thanks to mortgage bundlers and fly-by-night lenders, and rent them out until they were no longer habitable without ever maintaining them.

It didn’t take long for the bottom to fall out of that and people simply walked away and left community leaders with a problem. The city approach has been to take the VBML and use it to demonstrate need for federal dollars (because they get a percentage of those funds for administrative cost). Hundreds of properties were bulldozed using federal dollars, (your tax dollars), without the benefit of historic section 106 review and many significant buildings were demolished.

Neighbors, who had stood by the communities for decades, had withstood an onslaught of section 8 slumlords, an increases in crime, now faced the near total devaluation of their homes. Because city inspectors passed out VBML’s like candy and fast tracked property to demolition so they could demonstrate need for federal dollars.

Homeowners now find it impossible to get loans on property they owned for years to make routine maintenance because of property sitting empty that no one could live in or get mortgages to fix up due to the VBML, which has rendered property worthless.
Despite, all the negatives of Cincinnati, people still come to it attracted by its Historic architecture. People want to come in and restore these homes, they want to live here, raise families here. The devastation of assessed property values in Hamilton County and the city proper is in part due directly to the abuse of the VBML ordinance by city inspectors. The council wonders why this city lost 30000 people in a decade? It wonders why property values are in the tank in areas like Fairmount, Price Hill, Walnut Hills Riverside and many other once prosperous neighborhoods? People left because they could no longer deal with the red tape and roadblocks, put in place by this city and moved to other places, like Covington and Newport with pro-growth policies are in place that encourage investment.

Common sense dictates that in a tight financial market that lenders have an obligation to their shareholders and investors to make sound financial decision. Mortgages are based on value, appraisal comps and the credit worthiness of an individual, the abilty to get homeowners insurance and a clear unencumbered deed. Those are all rules we can play by.

But when the VBML is in place, an ambiguous ordinance that even attorneys have a hard time understanding, it is not hard to see why lenders will not make loans in our community. They view the VBML as a potential legal encumbrance that precludes a homeowner from occupying a property while they fix it up which would mean ‘owner occupant’ loans are not possible and thereby subjecting people to “investor rates’. The vast majority of people who are in restoration in ‘challenged” neighborhoods understand that not living in a house while they restore is foolhardy given the explosion of metal thefts by the addicted and the inability of our resource strapped police department to patrol adequately. However city inspectors want to order people to do repairs, lock the door and come back the next day. Common sense dictates that this is a disaster waiting to happen. But it is the “alternative universe”, city inspections and their bosses live in.

City policies and the abuse of those ordinances by Mr. Cervey’s department have redlined neighborhoods like Knox Hill, Fairmount and others. It is denying housing opportunity and the council must make an effort to stop it.

The council can be proactive or run the risk of those Federal dollars being yanked by HUD or a federal court ruling that the VBML effectively redlines neighborhoods and denies housing opportunity.

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