Great debate

By Joyce Miles/ This e-mail address is being protected from spam bots, you need JavaScript enabled to view it
Lockport Union-Sun & Journal

Forces are lining up for and against the city’s proposed rental property registry.
Elected officials and the attorney who wrote the proposal say it’s a painless approach to ensuring the city knows who to contact about property problems.

Rental property owners and investors say the registry is an unwarranted intrusion into their business. They’re voicing strong opposition, even though they’re not immediately affected.

Some community activists also aren’t thrilled. The proposal doesn’t go nearly far enough to help combat the housing blight that’s bringing down whole neighborhoods, they say.

Flak jackets, anyone? They might be needed when the Common Council holds a public hearing on the topic Wednesday.

Here’s a look at the tentative requirements of a rental property registry and some of the arguments for and against it.

The proposal
n The registry would show the name and legal addresses of rental property owners, along with the name and contact information for the local property managers or agents responsible for maintenance. Post office boxes would not be acceptable. At this point, a registration fee is not to be charged.

• Registration would be required of non-local owners of any size residential rental property, be it single-family home, duplex, multi-unit dwelling or apartment building.
  
• A non-local owner is any person whose principal residence is not in Niagara, Erie, Orleans or Genesee county. The appointed property manager would have to be local.
  
• Any qualifying property owner who doesn’t register faces having the city assessor as his “default” agent. In the event the city must serve legal process notices about code violations or other pending city action, it could serve the assessor and consider the owner legally notified.
  
• Failure to register is a violation, and the prescribed penalty is a range of fines, from $250 to $2,500, and/or 15 days in jail. Unpaid fines are to be attached automatically to the owner’s property tax bill.
  
• No rental property in the city could be sold without a valid “certificate of compliance” showing registry requirements are met. This clause applies to all rental properties, not just those owned by non-local interests.
  

According to City Attorney John J. Ottaviano, the registry is a tool to help building inspectors get code compliance at properties where owners have been difficult to contact.

Legal proceedings involving property cannot start until the owner/agent is notified — and it’s tough to force corrections when the violators are not fully known, or can’t be touched because they’re in places like California, Israel and Australia.

Ottaviano argues the registry’s intent is to ensure code enforcers can, finally, deliver notices in cases where it’s currently difficult or impossible. If distant owners choose not to respond, at least they’ve been notified and enforcement can begin.

The proposal spares local landowners from having to register. Aldermen say that’s because they’re not the ones impeding prosecution of blight.

“All the people who are calling in (concerns), it’s not going to affect them,” Fifth Ward Alderman John Lombardi said. “We just want to be able to get a hold of somebody when we need them.”

“If I already know who you are, you don’t need to register,” Alderman At Large Joseph Kibler declared.
Local landlords doubt that.

A single sentence in the proposal, Paragraph “H,” has them up in arms about government intrusion and the possibility that somewhere down the line they too will be forced to register, even if they are locally based.

Who’s the target?
Paragraph H says rental property can’t be sold until the owner gets a certificate of compliance showing registry requirements are met.

To Lisa Pettit of Newfane, a longtime owner/manager of multiple residential properties in the city, that means she’s already caught up in the registry’s grip, even though she’s locally based.

She’s asked Ottaviano, Assessor Peter Galarneau and Chief Building Inspector James McCann what they think the purpose of the registry is. Pettit said they’ve all told her it’s basically about getting accountability from distant parties, including banks and corporations, that own problem housing.

Pettit doesn’t see what that has to do with her, or why she should be dragged into the registry process at the point when she goes to sell her property. If it’s incumbent on her to get a certificate, and her potential buyer doesn’t want to be registered, it means she could lose the sale.

“When they say it’s ‘out-of-towners,’ that’s appeasement. In the end, it does affect us,” Pettit said. “How is (forcing registry on sellers) going to help blight, anyway, if that’s the main concern?”

It’s been easy to associate the words “out-of-town” and “rundown” but the fact is even local property owners sometimes buy and operate in the name of a corporation, trust or limited liability company. The reason isn’t to dodge responsibility, Pettit said, it’s to guard privacy.

“Sometimes, anonymity is desired. You buy a property in a company name, get someone to fix it up, sell it and split the profit. There’s nothing to hide,” she said. “Some people just don’t want everybody knowing what they own.”

To the official argument that the registry would put names of responsible parties on problem properties, Pettit responds, the city already knows who they are.

“These people obviously get their tax bills, their water bills. Why not send (code) notices with them?” she said.

Property rights undermined?
A mandatory registry will drive away investors that the city should instead be wooing to take care of its housing problem, rehabilitator Stephen L. Walsh of Lockport said.

Its existence will trouble them no matter how benign it starts out, because at some point more rules and regulations will be added to it. That’s how government works, he argues.

“Mr. Ottaviano at one point said, ‘no, no, this is only for the out-of-town landlords,’ and now we see it’s more. You can be assured there will be more still,” Walsh said. “This registry in its entirety is setting people up to get something in there, then (the officials) will be able to change it when the public can’t (oppose) it anymore.”

Walsh has made a later-life career of buying and fixing up dilapidated housing. A damaged house on Webb Street was gutted, restored and is being sold; another on Rochester Street that had been the target of protracted city court action is being repaired; and a four-unit apartment house on Elmwood Street that has been a neighborhood irritant is getting new life in Walsh’s hands.

But Walsh vows that, if the city institutes a rental property registry, he won’t buy any more houses in Lockport. He might even sell the Elmwood property before he’s done fixing it up, he said.

“Section H (of the proposal) circumvents property rights; it circumvents constitutional rights ... and it discourages investment. That won’t help the blight,” he said.

Nigel Bates, senior partner in Lockport-based BCG Group Inc., a property management company that has taken several hard-hit local properties under wing, also is not inclined to support the registry.

Bates said he hasn’t read the text of the proposal, or heard proponents’ arguments for why it’s necessary, but initially it sounds to him like a case of bureaucratic overreach. The city shouldn’t have any harder a time getting code compliance from a corporate rental owner than it would from a homeowner who’s not living in the house anymore, he said.

“I can understand why, if there are issues with a building, you need people to contact, but to ask for more than what’s already available (in city records) is overstepping,” Bates said. “This registry sounds like a step toward requiring licensing from everyone, and then, of course, there’ll be the annual fee, as there is now in Buffalo.”

A rental property registry wouldn’t automatically discourage Bates from investing further in the city, he said, but the costs associated with it will affect profit and loss. Supposing the city made additional moves to supervise the housing market — perhaps by requiring management companies doing business in Lockport to get a special license, for example — his cost to do business could rise beyond reason.

“Taxes in the City of Lockport are high enough. Depending on what the other costs are ... yes, there can be a disincentive,” he said.

Not tough enough?
Residents who’ve watched once-genteel neighborhoods turn decrepit from property neglect, and see what the erosion does to their property values, say the registry proposal has the right intention — but it ends up being timid.

“What’s happened in this city is a disgrace. The blight is like an untreatable cancer,” said Jean Kiene, a retired social worker who has pressed city officials insistently about the problem. “When properties are allowed to deteriorate, it’s like taking money out of our pockets. The way they’re assessed, the owners take (rent) money out of the community — they don’t put anything back (in taxes).”

The registry is “a very positive step forward,” Kiene said.

Jack Smith, a member of the Waterman Street area block club that has been making contact with landlords on its block, says he supports the proposal’s intent, but finds that it falls short in excluding local landowners and not pushing a higher maintenance standard.

“I appreciate what they’re trying to do; it addresses an important issue, out-of-town landlords, but I don’t think it’s tough enough,” Smith said. “I’d like to see some more accountability. I’d exempt owner-occupied (rental properties) but no one else, and I’d (require) yearly inspections on every one of them, inside and out.”

Chief Building Inspector James McCann also says local rental property owners should be included in the registry.

Out-of-towners are in the news because the lengths to which code enforcers have to go to try reaching them, but he says reluctant local landlords are almost as capable of evading him.

“They’re catching on to not accepting registered mail,” McCann said. “We’re sending someone (to Erie County) on Monday to try hand-delivering the notice because they won’t sign for the mail.”

Another enforcement glitch popping up lately, with both local and non-local title holders, is foreclosure limbo. Foreclosing banks can evict occupants but still not take back title to a problem property, leaving the city to sort out who’s actually liable for code violations and track them down.

McCann suggested a registry could help locate the responsible party more quickly in some cases. If, for example, the last listed property manager is contacted by code enforcement, and he’s not being paid anymore, he might tell the enforcers who better to take up their complaint with.

“It’ll help a lot knowing who we can get a hold of,” McCann said. “There’s no one law for everything. This is just one piece of the puzzle, one thing we can use.”

Mayor Michael Tucker suggested a rental property registry could help renters from time to time, as well. Last summer at 95 Niagara St., an apartment house owned by Buffalo-based Leicester Estates LLC, the building inspection department issued a three-day vacate notice to tenants after discovering power had been shut off by NYSEG due to the owner’s failure to pay the bills. If a building inspector — or tenants — had a clear contact on maintenance issues, they might have been able to force action to get the power turned on again, he has said.

A rental property registry was proposed in the early 2000s, but it was never enacted, after a raucous public hearing packed by opposing landlords.

“The last time we tried this? Holy mackerel, you’d think I got killed 19 times,” McCann recalled. “It got ugly.”

The public hearing on the current proposal will be held at 7 p.m. Wednesday in Common Council chambers.

Contact reporter Joyce Miles at 439-9222, ext. 6245.