Code enforcement struggles to bring out-of-state owners into compliance


By JUSTIN WIER

news@vindy.com

YOUNGSTOWN

While the city has implemented programs to deal with out-of-state ownership, critics point out enforcement has been impacted by a lack of resources.

There is just one 20-hour-a-week employee who is tasked with managing rental registration, vacant registration and foreclosure bonds.

Abigail Beniston, Youngstown’s code enforcement and blight remediation superintendent, expects that part-time employee to be full time by the end of the year. City council approved the change at its meeting last Wednesday.

“The city did put [the salary] in our budget this year,” Beniston said. “It will double the time where she’s dealing with and trying to track people down.”

Youngstown Mayor John A. McNally said he doesn’t expect the city to hire more people in the code enforcement department.

“While it’s an issue, I’ve got other issues that have to be staffed,” McNally said.

The city employs five people in that department, according to records received from the finance department. Their salaries total $135,461, a small fraction of the $180.7 million in expenditures council approved in its 2016 budget.

REGISTRATION SOLUTION

Programs such as rental and vacant registration are intended to make it easier for the city to keep track of the owners of vulnerable properties.

The registration process requires owners to name property managers who are supposed to be easier to contact than out-of-state owners who often hide behind limited liability companies.

Bill D’Avignon, director of the Community Development Agency, said the programs help filter out those who have an interest in the property.

“Those who ignore the notice – we get a sense that they don’t care,” D’Avignon said. “They’re saying whatever happens happens.”

Many property owners apparently don’t care.

Less than 10 percent of vacant properties and less than a quarter of rental properties were registered in 2014, according to estimates released by the Youngstown Neighborhood Development Corp., a private agency that helps the city stabilize neighborhoods.

“It’s just tracking these people down and getting them to pay,” Beniston said. “That is the biggest hurdle.”

Looking Elsewhere

Paul Kowalczyk worked for several years as building commissioner for the city of South Euclid. He said rental and vacant registrations have been effective in the Cleveland suburb, but they require the proper resources.

“You can’t just take the staff you have and add programs,” Kowalczyk said. “These programs are intensive. They take up a lot of time.”

When rental registration was first implemented, the city created a position to manage the program full time. They have since added vacant registration and foreclosure bonds to the position’s responsibilities while reducing it to part time.

McNally maintains Youngstown has adequate staffing in place.

“Sometimes I think they have to re-prioritize themselves internally,” he said.

YNDC’s estimates showed that increasing compliance with vacant and rental registrations could raise up to $739,920 in annual revenue – enough to support hiring several employees to manage the programs.

South Euclid’s ordinances also require out-of-state owners to appoint local agents in charge who can appear in court. The city has the ability to take the property owner to court as well, but Kowalczyk said they typically go after agents in charge because they are easier to track down.

Nicole Billec, assistant Youngstown law director, handles housing issues for the law department. She said locating owners is frequently the most arduous part of the process.

“Just finding them is honestly really difficult and time-consuming,” Billec said.

The city prosecutor has hearings when owners neglect to respond to code violations, but out-of-state property owners often fail to appear. Billec said city ordinances allow for the prosecutor to impose administrative penalties or pursue criminal charges. The administrative penalties max out at $1,000 for the third offense.

Criminal charges present their own problems, however. The city doesn’t have jurisdiction over out-of-state owners, and extradition often costs more than the city would recoup.

the STATE OF THE Problem

Raymond Pianka, a judge in Cleveland who garnered national attention for sentencing slumlords to live in their dilapidated homes, has had success holding those who fail to appear when charged with contempt of court.

Frank Ford, senior policy adviser at Cleveland’s Thriving Communities Institute, credited Judge Pianka with driving out-of-state investors out of Cleveland by levying sizable fines against property owners.

“He literally had tens of millions of dollars in fines against some of these companies,” Ford said. “If we did not have Judge Pianka basically battle these people, they’d all still be here.”

Jude Pianka said Ohio has taken a lackadaisical approach to dealing with out-of-state LLCs, which exacerbates the problem.

“There is a requirement that if you’re doing business in the state of Ohio that you be registered, but as far as I know – and we’ve written letters to the state officials – they don’t seem to take it seriously,” Judge Pianka said.

Alison Goebel, deputy director of the Greater Ohio Policy Center, said the state attorney general’s office is concerned about the matter. She said enforcement of current policy would improve matters.

“If you’re like, ‘I’m ABC LLC but not even registered with the secretary of state,’ what we hope is going to happen then is that the county recorder is going to say, ‘I can’t record this deed,’” Goebel said. “Then the sale is null and void.”

She acknowledged that less scrupulous LLCs would list another LLC as the statutory agent, but this would stop some transfers from proceeding.

The Mahoning County Recorder’s Office said its policy is to record what it receives from the auditor. They don’t check to see whether LLCs are registered.

“This issue is so complex that there are no simple solutions,” Goebel said. “I wish we had easy answers. If we did, this problem would have been taken care of years ago.”

Don't Miss a Story

Sign up for our newsletter to receive daily news directly in your inbox.