- Jim Otte Staff Writer
A Dayton program that places run-down properties into the hands of new owners who promise to fix them up is taking heat from frustrated neighbors. Some of the properties have been sitting for years awaiting renovation.
Homeowner Larry Hollar has seen his neighborhood suffer as a brick building at 115 East Norman Avenue, obtained by the city in 2013 and transferred to a new owner, remains an empty eyesore.
Over the years Hollar has peppered City Hall with multiple complaints about the building’s broken windows, tall weeds and attractiveness as a dumping ground for trash and broken furniture.
“Oh boy, have I called ‘em. I’ve called ‘em, I’ve faxed ‘em. I’ve done everything I can,” Hollar said. “I don’t get much of a response any more. They don’t want to talk to Larry.”
The property, built in 1950 with 4,176 square feet, housed once four apartments. It was placed into the hands of a new owner through the city’s Real Estate Acquisition Program, better know as REAP or Lot Links.
Brian Inderrieden, Dayton Acting Director of Planning and Community Development, said the program began in 2008 as a way to get empty lots into the hands of neighboring homeowners. It had the duel purpose of allowing adjoining neighbors to expand their property and save the city from having to hire a contractor to mow the grass every summer.
Three years later, distressed residential and commercial properties were added to the program, permitting people to buy them for minimum investment.
“It has to be two years delinquent in property taxes. It also has to be abandoned, so no one can be living there,” Inderrieden said. A down payment from the prospective buyer can range from $500 to $1,000, depending on the type of property. If the city approves the sale, the back property taxes are wiped out and the property sold for a few thousand dollars.
Dayton requires applicants to the program to disclose their plans for renovation but does not hold them to a timeline. The only enforcement comes into play when an applicant seeks to purchase another property.
“If you want a second piece of property, that’s when we really check to make sure what you have done with that first property,” Inderrieden said. “If you owe back taxes personally on any property you cannot get a piece of property through this program. If you haven’t rehabbed the first one, we are not going to give you a second one.”
How much good is the program doing? The city says it’s not sure. Although the program has been in existence since the early days of the recession, the city has never conducted a detailed audit or annual review of the REAP properties and their condition years later.
A database of all of the properties involved in the program, obtained through a public records request, revealed that to date 986 properties have been obtained by the city and transferred to a new owner. On the application, the new owners must agree that they will not “live in, rent or transfer ownership of this property after acquiring it without first completing all rehab work to bring the property up to code.”
They must also agree to periodic city inspections during that work. That same document does not identify the status of the properties relative to the repair work that was promised.
Real estate expert Denise Swick said the concept behind the REAP program is beneficial for the community. Should the city care to look, property tax records would reveal how successful the program has been, she said.
“This would be a super easy audit,” Swick said. “If they have the list of homes that have been sold, going back to see who is paying their property taxes. If they’re not paying their property taxes. They’re not mowing the grass. They’re not fixing up the property. They’re not in it to win it so to speak,” she said.
An I-Team review of 25 residential properties selected at random that were purchased through REAP found about half owe more than $1,000 in back property taxes. Among them is a brick apartment building on Yale Avenue whose owner owes $6,442 in back taxes, records show. Neighbor Elmer Bray said he has seen work being done at some of the eyesore properties, but the pace is agonizingly slow.
“These things need to be fixed up or torn down,” he said. “You have to sit here and look at these things and there were homeless people living there. They put boards up and that stopped it.”
Some of the interest in the homes appears to come from would-be “flippers” who think they will make a quick buck by buying distressed REAP properties and then selling them.
Home construction contractor Jim Lechner said some people quickly get in over their heads when they discover unforeseen problems and expenses. Buyers in the program can visit the properties but are not permitted to go inside for an inspection. Problems with faulty wiring, leaky roofs or crumbing foundations might not be readily apparent from the outside.
Lechner said the city might boost the success of the program if it provided some extra help to people thinking about taking on a project. “With some professional services available to help them (they might be able to ) understand more of what they’re getting into,” Lechner said.
Swick suggested another change that might encourage buyers to become more committed to see their projects through to completion. She said the city could require money up front, to be held until the work is done and the property brought back up to code.
“Put up 10 percent of it for the city to hold until that project is done. Something like that. That’s skin in the game,” Swick said.
Larry Hollar liked the idea. Or, he said, require that the work be done within a certain time period.
“Give it to them with contracts that ties their hands. They’ve got to do it ( repairs ) within a 12 month period or even 24 months. But it has to be done. If it doesn’t get done, now there’s penalties to be paid,” Hollar said.
Inderrieden said he understands the frustration neighbors feel.
“There is no question that vacant properties in a neighborhood really do have a negative impact. They discourage other people from investing and they depress property values,” he said. “So we know it’s a big deal. We know this program works. We just ask for folks to be patient and let the legal process take over.”