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Wednesday, February 11, 2009

Test case shows city's tough stance on fixer-uppers may need some tweaking

posted by Bob at Wednesday, February 11, 2009

5 Comments:

Blogger Bob said...

Test case shows city's tough stance on fixer-uppers may need some tweaking

Scott Nichols
news editor

North Street resident Andy Dick didn't break any city laws when he bought 664 Wells St.

Or so he thought.

But it turns out the once-grand home he purchased for little more than $40,000 was supposed to be on its last legs, in the city's pipeline for demolition as a vacant, decrepit monstrosity too costly to fix.

Dozens of vacant homes have already been demolished this way in St. Paul in 2008, usually after the homes have been abandoned. And usually after every bit of equity and notable interior feature has been stripped.

Dick, a 28-year-old rehabber with an engineering degree from Marquette University, said he didn't know his home was on the list when he bought it, though. Already, he has purchased and rehabbed five other houses on the East Side, including the one he currently lives in.

Usually he examines dozens before he finds a house like 664 Wells. To him, the proud bones of the structure belie its cruel fate as a Category III vacant building - in the city's eyes, among the worst of the worst.

But under the city's relatively new rules on such Category III properties, it wasn't supposed to be sold without being rehabbed first. No performance bond was issued to the city, no work plan was forthcoming, either, also rules to be followed for such structures.

The problem, though, is that when Dick got the house, he said it wasn't yet a Category III.

"When I closed on it, the closer told me it was a Category II. My truth-in-sale-of-housing (form) says Category II," Dick said.

Thus a test case for the city's tough new housing rules is born, and - in a little touch of irony - the house just happens to be in the ward of City Council member Dan Bostrom, who pushed for the stringent rules in the first place.

The stakes are high, perhaps most of all for Dick. If he doesn't get purchase approval from the city, officials will go through with the home's already planned demolition. Again, a touch of irony: it will be Dick himself who will be stuck with the demolition bills - at least $6,000, maybe as much as $14,000 - if this happens.

But the city is in a little bit of bind, too. If it lets Dick buy the home, it may well prove to be a clear signal to every home flipper, bank, or holding company that St. Paul's housing rules can be run over roughshod.

Bostrom, perhaps understandably, is loathe to let that happen, especially in his own ward. When Dick came to plead his case before the City Council last week, he appeared able to bend the ears of quite a few council members. But not Bostrom, who nevertheless made clear he wasn't without sympathy for Dick.

"The responsibility for fixing this was with the previous owner," said Bostrom. "They never should have been able to sell it to this gentleman."

While there was unanimity among council members regarding the core issue - that the fault lay with the seller, not Dick - others showed they weren't quite to willing to let the rehabber take the short stick.

"Because we can't punish the seller, we're going to punish the buyer?" asked Council member Pat Harris. He pushed for city staff to figure out how the property could even be sold if it was a Category III structure.

Council member Dave Thune asked City Council counsel Gerald Hendrickson what penalty the city's ordinance proferred for violating its no-sale-until-fixed provision for Category III structures.

"Penalty? I don't think you put a penalty (in) for selling," replied Hendrickson.

"It probably won't be the last time we see this kind of thing," said Council member Melvin Carter III. "I'm not insensitive to Mr. Bostrom's argument about the precedent we set here. Perhaps we need to craft some kind of disincentive for the sellers."

Council president Kathy Lantry told the council that she is familiar with two other homes Dick has purchased and rehabbed in her ward, at 763 Hawthorne Ave. and 372 Maria Ave. Both properties were redone beautifully, she said, calling their before/after transformation "incredible."

As for the Hawthorne house Dick just bought, "he did everything right," she said. "But to be consistent, it shouldn't be sold. I just feel bad that someone followed all the rules (and) now he'll have an empty hole in the ground."

"Not necessarily," said Bostrom, adding that there's no reason Dick can't pursue his case through legal channels against the seller or his agents. "This is a critical issue if you ever want to enforce this ordinance."

Otherwise, he added, "this ordinance is meaningless."

Harris countered that perhaps a penalty against the seller might be more appropriate than against the buyer, at least in this case.

"It would seem to solve a lot of these problems," he said.

Bostrom, however, proved unwilling to bend.

"The penalty to the seller is they get their property back. The penalty to the seller is they have to fix it up to code before they sell it," he said.

But Bostrom proved to be the sole hard-liner drawing a line in the sand. After it became clear that no one else was yet willing to send Dick packing, the council then unanimously approved a motion to send the case back to city staff for more work on the timing issues of the case.

Afterward, Dick made clear that the reprieve, though possibly short-lived, is nevertheless welcome.

"Well, it sounds to me like it will get torn down," said Dick. If that happens, "in the end I'd basically just be screwed."

6:03 PM  
Anonymous Anonymous said...

Once again the city position is that it's not about getting the house fixed, it's about comtrol over the citizens.

11:10 PM  
Anonymous Anonymous said...

East Side Reviewhttp://www.eastsidereviewnews.com/

11:14 AM  
Anonymous Anonymous said...

Perhaps Andy should be seeking out a good lawyer. Bringing up an old house to new codes is illegal. In violation of Morris v Saks. Could be St. Paul is opening up its coffers to even more people who will have huge claims against the City.

2:29 PM  
Blogger Bob said...

So, it appears 6 of 7 council members aren't as dumb as Bostrom.

We could end the vacant housing blight with a handful of guys like Andy. That has been our point all along.

6:36 PM  

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