Maumee City Officials Sit Down And Answer Questions About Non-Owner-Occupied Rental Property Ordinance

Editor’s Note: Recently, The Mirror sat down with Maumee officials to discuss the city’s recently enacted non-owner-occupied rental property ordinance. Representing the city of Maumee were Mayor Richard Carr, Maumee city administrator Patrick Burtch and Maumee Law Director Alan Lehenbauer.

Mike McCarthy, editor and publisher of The Mirror, presented the questions and the three Maumee officials responded candidly in a question-and-answer-styled format. The purpose of the interview was to impart the details of the controversial ordinance from the city’s point of view, while also offering an extensive explanation to readers of The Mirror as to how the new ordinance will impact Maumee residents. 

The interview was initially conducted on February 24 and was continued with follow-up questions on March 17, prior to the passage of the ordinance by Maumee City Council at its March 21 meeting.

Following is the content of that discussion.

MIRROR: Rich, with this being your last year serving as mayor of Maumee, it seems that you have been very passionate about getting the non-owner-occupied rental property ordinance passed and enacted as soon as possible. Can you explain why it is so important to you?

CARR: Well, I met with the four former mayors of Toledo – Mike Bell, Donna Owens, Paula Hicks-Hudson, Carty Finkbeiner – and they’re addressing that the city of Toledo has declared gun violence to be a health crisis in the city of Toledo. Some of those shootings have occurred right over behind the Sunoco station at South Detroit Avenue and the Anthony Wayne Trail. Some have occurred right over on Heatherdowns Boulevard right at the end of the Key Street area. (Opponents) wanted us to delay this and delay it and prove there’s actually a problem. If you wait until the problem (crime increase) is here, trying to eradicate the problem is far, far more difficult. The four mayors agree that blight, property devaluation and poorly maintained rental property are the biggest contributors to increased crime rates being realized in our city.

MIRROR: Can you explain to our readers how blight leads to crime?

CARR: Because if the house next to your house has broken windows, the paint is peeling really bad, there are inoperable vehicles cars out in the front yard and other trash and debris on residential properties, pretty soon the people next to you are going go to sell their house, and it’s going to sell for less money. Consequently, the home values in the neighborhood start to decline substantially. Then, when more houses on the street go for less value, they deteriorate, and the problem multiplies. Studies have shown that suburban and urban blight is more prevalent where there are a significant number of rental properties, and the affected community lacks a strong ordinance and strict enforcement to make sure that property values are sustained and where families residing in rental properties are protected. Then, when property starts to deteriorate, the property values start to go down, people begin to move, in turn the community gets more rental properties that aren’t being taken care of, and the problem just grows and spreads. You start to see more drugs and eventually the crime becomes more serious. Every study has shown that there is suburban blight. If you look at Maumee, our road from River Road connects with Toledo’s River Road. Michigan Avenue connects with Toledo. Crystal Street connects with Toledo. Stengel connects with Toledo. Key Street connects with Toledo. Reynolds Road connects with Toledo. It’s getting worse, and if you look at where the shootings are taking place, they are getting closer and closer to Maumee. 

The opponents of the ordinance say give us a study showing there’s blight. Why are we having to do this if you don’t even have a problem? They’re missing the entire point. What we’re trying to do is prevent the problem although we do have a significant blight and property valuation problem already. I have yet to hear from a resident who is not a landlord, or a tenant scared by their landlord telling them that the rental inspection program will raise their rent, approach me in opposition. I have definitely had residents say that I understand why you’re doing this. We’ve got rental property on our street that is in poor shape and, you know, they get it. We feel that if the city maintains itself, then the properties are not going to deteriorate. You may have one on the street, but it’s not going to proliferate. We can deal with it much quicker this way. So, that’s the idea. We’re not saying we have a horrible blight problem right now. We are saying we’re going to be proactive before the blighted properties become a real and lasting problem and eventually lead to higher crime rates, which our community is not used to and certainly doesn’t want. If you go into North Toledo or other surrounding communities that were once quite nice, you’ll see how quickly neighborhoods can deteriorate. What we’re trying to do is to keep the crime out of our city. 

It’s just like when people say, “Why does the city pay for school resource officers in the middle school and in the high school when we don’t have any problems?” Well, that’s part of why we don’t have problems. So, that’s what we’re trying to do. You don’t wait until the problem is in there to get rid of it. Prevention of crime is much easier than eradicating it, just like it is easier to prevent disease then to cure one that has attacked you. Violent crime starts because you begin to have drug trading, and things get worse. The issue becomes, as property values decrease, and people start to move out and it reduces the very tax revenue the city relies on to provide police and fire protection to our residents, and once revenue declines and people move, the rest who stay must shoulder a higher burden. You must prevent the problem. That’s the only way to do it: Be proactive.

DR. BURTCH: Essentially, this whole problem revolves around the overwhelming statistical relationship between poverty, property value and crime. There’s a plethora, and I mean thousands, of research studies that show the connection between poverty and increased crime. What they say, and I am quoting one of them right now, is that “many and not by any means all impoverished feel the hope of treasures is worth the possibility of being caught, thus poverty causes desire and, in turn, increases the crime rate.” There’s a lot of academic literature on this. There’s not a police department in the world that wouldn’t tell you that poverty is in direct relation to housing stock value, and crime. It all follows. That’s the point. It’s not that you’re attempting to treat impoverished individuals improperly. In fact, it is the opposite. We are trying to protect the very individuals and groups that are typically more marginalized in society so that they can be productive members of our community. We’re requiring new apartment complexes be built that provide a higher standard of living than many may be used to, in some cases. So, the idea is to stabilize housing values first and protect residents, regardless of who they are, whether they’re low-, moderate- or higher-income people, the council is trying to protect residents. That’s who they represent – residents – and they’re trying to protect them. 

Sometimes, people have a problem with what they consider interference in their business in terms of property investing and landlording. I get that, and it is a legitimate concern, but Rich is right. There is a huge relationship between poverty and the crime rate in terms of the crime rate going up as poverty increases. As income decreases, you have a lower standard of living, which means you live in a unit that may not be quite as nice as the next, more expensive unit. 

MIRROR: One of the arguments from opponents of the non-owner-occupied rental ordinance is that it will eventually expand to include inspections of owner-occupied houses in Maumee. Could that be a possibility?

DR. BURTCH: Single-family, owner-occupied homes will not be part of this inspection process, and I can assure you I can’t even imagine that will ever be part of it. I get the scare tactic, but that’s just not the case. In fact, that’s what they’ve been telling us and the stuff that opponents have been writing and saying at meetings, is that it’s not fair because we’re not including single-family homeownership, because they believe that most of the blight is in single-family homeowner houses. We’re just simply not doing that. It doesn’t mean that we don’t cite homeowners because they have blight in their yard, but we’re not doing an inspection program for single-family owner-occupied homes. We just don’t do it. It’s just not happening.

MIRROR: What about the claim from some landlords that Maumee is trying to eliminate these rental properties altogether, or to at least a large degree?

CARR: Absolutely not. What we are doing is we want to keep crime out of the city of Maumee and further stabilize property values, and we want to protect the interests of people who are tenants. It’s a matter of safety for adults and children alike. 

LEHENBAUER: Safety is the concern. The median year homes have been built in Maumee is 1963, according to census data. If you look at the data for 1960 and earlier, it’s almost half of the homes that have been built in the city, so they’re aging.

CARR: Some of those who oppose the ordinance are trying to scare people. They have said, well, if you’re a tenant, you have tenants’ rights and you can escrow your money with the court if there is a problem. OK, I was explaining this scenario to Patrick and Jim MacDonald and some other people earlier today. OK, let’s say John Doe is a realtor who comes to me, as his attorney, and I say John, we’re going to set up JD1 LLC and you’re going to buy your houses, but we’re going to put them in the name of Louisville Title as trustee. Now, when I set up JD1 LLC, as the attorney, I am going to sign all the papers that I submit with the state, I will obtain the tax ID number. So, when you go to the Secretary of State, you will not see John Doe’s name anywhere, or at all. You don’t know who JD1 LLC actually is. Then, when you go to the Lucas County Recorder and you look up JD1 LLC, you’re not going to find it because it’s going to be in the name of Louisville Title as trustee, so you don’t even know who it is. Then, they say you can escrow your money. Well, I tell John Doe to put his first three houses in JD1 LLC, and then we’ll set up JD2 LLC, and we’ll put three houses in that. Because under Ohio law, if you put in your lease that the landlord owns less than four properties, the tenant cannot escrow their money with the court. It is clearly a measure designed for landlords to avoid liability to tenants. 

MIRROR: How many meetings have you had with landlords and realtors since the first reading of the ordinance?

CARR: We have had three in the group, but Patrick has had one-on-one in small groups with dozens. The group that was formed has met three times, but Patrick has spent hours meeting with individual realtors and people who have spoken at the public meetings and came and met with him one on one.

DR. BURTCH: So have the council members. Jon Fiscus has, Gabe Barrow has talked with a lot of people. Josh Harris has. I’m sure Jim MacDonald has. Altogether, it could be over 100 individuals addressed and met with, not including the 14 to 19 individuals who spoke in opposition at the three council meetings where this ordinance was addressed.

MIRROR: Has everybody had an opportunity to discuss this ordinance with city officials?

DR. BURTCH: Everyone, even if they are not residents, had numerous opportunities to speak with the mayor, council members and staff. 

MIRROR: Do you think the meetings were productive?

CARR: Yes, because we made changes to the ordinance throughout the process after determining through opposition input that changes were necessary either because there was a mistake in authorship or some language was unclear as to landlord responsibility as it relates to the international, building, electrical and mechanical code. So, from that point, it was productive. The difference is that the realtors – not the landlords, so much – but the realtors, they just didn’t want the ordinance. They wanted to self-inspect and self-report their own violations and that was not on the table simply because no one that I know believes such a perfect world exists. Not many would inspect their own rental units and then report their own violations to the city, especially if that revelation would cost significant monetary investment by the landlord on behalf of their tenants.

DR. BURTCH: And they wanted no interior inspection. That defeats the purpose. While it is important to keep the outside of a home looking good, the true purpose of any rental inspection program is to ensure the safety of the home’s occupants (tenants).

CARR: There were people in the meetings that we had, both with a group and as individuals, who made suggestions, and we did incorporate several changes as a result of those meetings.

MIRROR: Have any significant changes been made to the ordinance as a result of those meetings?

DR. BURTCH: There have been changes, but the changes have not made the ordinance stricter. It’s liberalized the ordinance. In other words, it’s less restrictive than it was before. So, we haven’t done anything or advertised anything that is different in terms of harsher standards. A lot of it is explanation, clarification and ensuring that a legal non-conforming statement (“Grandfathering Clause”) was incorporated as to ensure, barring any major recent renovation, homes did not have to follow new state codes. We placed a section in the rental inspection ordinance where we have made it very clear that when staff inspect a house, that the house will be inspected considering the codes in place within the era in which it was built; unless there is some outstanding health and safety issue that inspectors believe somebody’s life and limb are in danger, or that somebody is changing something themselves that requires them to comply with new code, which we have no control over. 

MIRROR: For example, if somebody has a 1910 house with knob-and-tube wiring, how would that be handled?

DR. BURTCH: If they haven’t done anything to the home or wiring that creates a safety issue, that’s perfectly acceptable; but if say a property owner insulated the home with blown cellulose in the walls, not realizing that they had knob and tube wiring, that will be uncovered and then the landlord or property owner will have to rewire the home or otherwise make it safe for the tenants residing in the home. This example demonstrates a severe safety and fire concern because nob and tube wiring is not insulated and can easily start a fire.

LEHENBAUER: We have lessened the penalties for violations, and we have also made it clear that if a prior owner installed, say, a furnace without a permit, that they would still have to get a permit, but they wouldn’t be penalized for what the prior owner did without a permit.

MIRROR: Has there been any pressure exerted from special interest groups outside of the city of Maumee regarding this ordinance?

DR. BURTCH: Significant. Although it is understandable for an investor to protect their own financial interests, unfortunately, sometimes a property owner’s financial interest may conflict with the safety concerns of an occupant and residents that the city council has sworn to protect.

CARR: I was told that the Northwest Ohio Board of Realtors and the National Realtors Association organized a robo email so that they could get emails to be sent in. We received three hundred of those from all over the country. Donald Trump sent one. Elvis sent one. Some people have used 400 Conant Street as where their permanent address which is the address of the Maumee Municipal Building. Of them, at least 95 percent are not Maumee residents, and I’d imagine that at least 90 percent of them don’t have businesses or rental properties in Maumee either. The message is the exact same wording. There’s nothing where they give opinions. There’s nothing specifically in the ordinance they don’t like. They just don’t want it passed, is all they say.

LEHENBAUER: The city has received 10 calls after an advertisement was placed to call the city and vote on this ordinance. Nine of the 10 callers were in favor of the ordinance. 

CARR: I asked at the last meeting we had. I said I understand the landlords’ opposition to this because I think a number of them have properties where they have gone in and done work that required a license and a permit and failed to get that, and they don’t want it to be discovered that that happened because it’s an offense, but I couldn’t understand why the realtors were so opposed. Couldn’t get an answer.

MIRROR: When will the ordinance go into effect, and when would the first inspection most likely take place?

DR. BURTCH: The inspections don’t even start in this ordinance until June 1, 2024, so it’s well over a year from now. You’ll be able to register starting in June of 2023, and you have 180 days to register, but that’s essentially half a year to register the properties, which is simple.

CARR: If a residential home has an inspection, and there’s no problems in the inspection, the fee will not exceed $150, which means it could be less than that. And if they have no violations then they don’t have to have another inspection for four years. So, if you take that and average it out, it’s under $4.00 per month. This amount is hardly support for scaring tenants that the landlord will have to raise their rent.

DR. BURTCH: This is now a three-year inspection period. It was two, but now it’s three years. We made it less restrictive. What Rich is saying is that in that first inspection you get, whether it’s now or three years from now, if you pass without any violations, there’s a cap, and then you go to four more years before you must be inspected again.

MIRROR: So, the property owner would pay $150 for the inspection?

CARR: That’s the most it could be, and it could be less, and that’s just for a residential home. So, if somebody has a multi-unit complex, it’s going to be less than that per unit, because they’re already there and they can do them all at once. It’ll be per unit, but it would be a much lower per-unit fee. We’re not here to do home inspections. That’s the biggest misunderstanding. This is not a home inspection similar to what you might experiencing when purchasing a home. We’re looking at basic safety checklists instead of huge, multi-page reports. The inspector could come in there and be in there for a very short period because they will look at the furnace, the electrical, everything that is required, and they may determine right away that this place is perfect. Then they’re out of there quickly, so the property owner is going to be billed by the hour. All we’re saying is that $150 is the most it would cost if everything were correct on their first inspection. Then, they get four more years before their next one, and so it comes out to under $4.00 per month.

MIRROR: Just to be clear on the pricing, it is our understanding that there will be a $15.00 registration fee for each property for a four-year period, and then there is an inspection fee of $150 every three years, unless the first inspection is perfect, where in that case a bonus fourth year will be awarded as an incentive before the next inspection is required. Is that correct?

CARR: Let’s clear that up. It’s not an inspection fee of $150. That is the rate by the hour. So, if you’ve got a place that’s got multiple problems and issues, and we have to keep coming back, it’s going to be charged by the hour, but if the inspector comes into your home and everything is fine with the inspection, the most the city will charge $150, but it could be less than $150.

MIRROR: So, those inspections will be set up well ahead of time by mutual agreement, and then the city will bill after the inspection and, if it’s a clean inspection, the property owner will receive a bill for not more than $150. Is that correct?

DR. BURTCH: Yes, but I do want to make it clear that the way the fees are calculated are either done on an hourly rate, or a graduated flat rate, and that’s what we were just talking about. A graduated flat rate is taken when you have an apartment complex where the inspections go much quicker than a house would, or a duplex. The idea is that either/or they still won’t exceed more than $150 for a unit. So, if it’s an hourly rate, and let’s say the hourly rate is a certain amount, and you go through and every 10 minutes you’re doing an apartment, and you’re getting 50 units done in a day, the cost per unit is much cheaper, right? Like I said, we’re not doing a full house inspection, checking everything. We’re checking health, safety and welfare issues.

MIRROR: To be clear, if you have a 12-unit apartment and the inspectors go through there on the same visit, they’re not going to hit $150 per unit? Is that correct?

DR. BURTCH: They probably won’t because a 12-unit building is not going to take you that long. I mean $150 would be an hour per unit which is highly unlikely. For management companies and maintenance people who take care of this stuff ahead of time, we will give them a whole checklist book of what we’ll be looking for, so that they can prepare. When you do that, a lot of landlords will have their people fix that stuff ahead of time. I’m sure those inspectors would love to walk through and go check, check, check. You know, that’s the goal. There are some people who don’t take care of their properties, and it will be more money. 

CARR: Just an example of what we’re dealing with – in 2021, there was an apartment complex in Maumee, where one of the tenants had his leg go through the floor. There’s another one on East William Street, where we’ve been notified by a resident that they had the same thing, where there was extensive mold in the house that they believe was due to a leak in the hot water heater. In our inspections, we will notice those safety issues. It wouldn’t go on for years like that. I mean, that’s just two of the exact same instances that we know have happened. Those are the kinds of things we want to look out for.

MIRROR: Since registration doesn’t begin until June of this year, and since inspections don’t start for another year, property owners will have plenty of time to get their properties in compliance prior to the first inspection, correct?

CARR: Yes, and then if an inspector goes to a property and inspects it, and they find a problem, the property owner gets 90 days to correct it without any penalties.

DR. BURTCH: Nobody here is saying that every person who owns a rental property or owns an investment property does a bad job for the people who live there. We’ve met with a lot of people here. I’ve been in some properties myself that are fantastic, and the landlords do great work, and the people are happy. But there are some landlords that aren’t that way, and the problem is, as a city, we can’t pick and choose who the bad players are and who the good players are. You treat everybody the same across the board, and what you’ll see over time is the great investors that really take care of their property will have very low fees, because every four years their inspections are quick, and they are clean. Then, there are some that aren’t so good and that’s what this program is for. I know there’s been a lot of confusion about this, and some will say, “Let’s just go after the bad landlords. We’ll show you who they are.” Well, we can’t. Everybody’s got to be looked at in the same way. 

CARR: I think there’s a point that needs to be understood, too. I understand that with landlords, it’s a business for them. They’re in it to make a profit. I have no problem with that whatsoever, but in their business, they are renting out a house. The city of Maumee collects garbage for that house. We don’t charge the landlord for it, but the amount that they pay in real estate taxes doesn’t cover the cost of picking up the garbage in a lot of instances. Then we have our police, our paramedics, all the services the city provides for that business, and they’re not paying us anything for it. So, if they look at everything the city provides for them – we keep the streets clear for their tenant, if they have a call for an ambulance it’s going to be there, a call for fire, a call for police, it’s going to be there – all the services we provide. And if the only thing they’re paying us is their property tax, it’s not enough to pick up the garbage, and they’re making money from their business. Most likely, they are getting paid more from the tenant than their mortgage payment is. If not, they wouldn’t be in the landlord business. 

It’s different than owning your own home and getting all those services because you work for your own home, you’re not making money on your home. But these people are making money, and yet, they’re not paying the expenses that the city provides to cover it. We’re not doing this to make money. We will not make money on this project, but if we keep the property values up in Maumee, we will make money that way.

MIRROR: What kind of additional staffing, if any, will be required to implement this new ordinance?

DR. BURTCH: There will be extra staffing. Probably two housing inspectors who don’t have to be licensed to do this kind of inspection. By the way, we do have licensed inspectors. I’m not talking about licensed inspectors who do real estate inspections for sales. I’m talking licensed inspectors, who do building inspection and structures inspection, electrical and plumbing, mechanical. There are house inspectors for a construction project, and there’s a housing inspector for rental inspection. Those inspectors do not need to be licensed. It doesn’t mean they won’t know what they’re doing. When we hire people, we’re going to look at people who have knowledge of construction and who would know what they are looking for. The city’s new chief building official will train these housing inspectors.

MIRROR: Are there any other ordinances within the state of Ohio that are similar to Maumee’s? If so, how have they fared when being challenged in the courts?

CARR: Shaker Heights and South Euclid, Ohio, as well as many others, all have very similar ordinances to Maumee.

LEHENBAUER: In the Cleveland area alone, there’s probably 20 communities with inspection codes that are in place, but most of those communities also all have point-of-sale inspections.

CARR: We don’t have point-of-sale provisions and we’re not even discussing that.

LEHENBAUER: The first housing inspection ordinance that really got challenged at the US Supreme Court level dates to 1967. It was a San Francisco case, and that’s where the search warrant requirement came into play. In Ohio, Akron’s rental inspection ordinance got challenged in the federal court of appeals in 2001, and the court upheld the ordinance against many constitutional challenges. Inspection ordinances and inspection related ordinances have been in place for a long time. The inspection codes are not new. Locally, Rossford has one, Bowling Green has one, and they both have some self-inspection-type provisions included in their ordinances.

CARR: As far as what we’re doing, the only challenges that I’ve seen anywhere on these is if you don’t have a warrant to go in. If the tenant or the landlord refuse you to go in, then you can’t go in. Our ordinance specifically states that we can’t go in without a warrant. 

MIRROR: Have these Ohio rental property ordinances stood the test of court challenges?

LEHENBAUER: There are some that have not met constitutional requirements, mainly due to the lack of a search warrant provision. There’s a court case from 2015, where one city didn’t have the warrant requirement in their code, and they were challenged on it. The only reason that wasn’t in their code is because they hired somebody to redo their code, and they left that provision out, and they didn’t catch it. That city changed their code to include a warrant requirement. 

MIRROR: Within a 30-mile radius of Maumee, would it be fair to say that Maumee’s rental ordinance is the most stringent?

CARR: Yes, and I think part of the reason for that is that we are the first suburb of an urban city, and so our housing stock is older. The average age of a home in Maumee, compared to Monclova, Waterville or Whitehouse, we’re way older than the average homes. The studies that we have found have said that you have to have a strong ordinance and you have to stringently enforce that ordinance. Because our neighborhoods are older, our housing is older, and the flight further and further out into the suburban community makes us the next oldest. The urban city is the oldest, and we’re the next oldest. So, we are the first ones having to really deal (with this situation) because we are the first suburban community in the area that abuts right up to Toledo. I asked the mayor of Sylvania and (he said) they do not have a single street that abuts to Toledo. We have at least eight that I can identify.

DR. BURTCH: Thousands of communities across this country have these ordinances; some much stricter than ours – far stricter than ours. We tried not to do something like that. Let me be very clear: There has never been contemplated, nor would we ever recommend, a point-of-sale inspection. I have never supported a point-of-sale inspection. I think it’s way too obtrusive. We’re not doing that. I don’t know of any staff member or any council member who would support such a thing.

MIRROR: What about the argument that it is not only rental properties that are blighted, but also several owner-occupied houses?

CARR: We do sweeps where we look at the outside of (owner-occupied) properties. We’ve done these by section of the town where we go through and then we send out letters. We get about 98-percent compliance from the property owners. We send them a letter about the outside of their property, but we have no right to get into the inside of an owner-occupied house. The difference is that when a landlord has a tenant, it becomes a business. They’re having somebody come into (their property) who is a non-family member, and it is a business relationship.

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