Cleveland mayor proposes sweeping change to building, fire codes for abandoned properties

By Courtney Astolfi
cleveland.com

CLEVELAND, Ohio — Slumlords. Blighted homes. Vacant homes. Faceless out-of-state corporations, snatching up properties and allowing them to crumble.

Clevelanders know these problems well, and many have cursed City Hall for what they see as local officials sitting idly by. But change could be on the horizon.

Mayor Justin Bibb is proposing what he’s calling the “Residents First” housing reform agenda — a sweeping overhaul of building, housing, zoning, fire and health codes that dictate City Hall’s response to some of Cleveland’s most vexing housing issues.

The reforms, Bibb said in a news release, are “all about prioritizing people.”

“From day one, my administration has pledged to crack down on landlords that are taking advantage of our residents and to bring better enforcement and more resources to revitalize our neighborhoods. These ordinance changes are the critical tools we need to do just that,” Bibb said.

If City Council agrees, the wide-ranging changes could tighten code enforcement and improve housing conditions across the city by requiring local accountability for out-of-state investors, adding civil penalties for code violations, remaking the rental registry, and keeping closer reins on vacant properties.

The changes could also mean fewer salvageable homes meet the wrecking ball, which could help with affordable housing supply. Even parking garage safety and overgrown grass are in the crosshairs.

Sally Martin O’Toole, Bibb’s building and housing director, describes the plan as “ambitious,” but sorely needed. City Council members routinely say lagging code enforcement hurts quality-of-life, and is among residents’ biggest gripes with the city.

The proposed overhaul – which would rewrite 23 sections of code and add several new provisions – is part of a “bigger vision to completely turn the housing code enforcement department on its ear. To reimagine the way it works, and honestly, to create more of a suburban model,” Martin O’Toole said in a recent interview with The Plain Dealer and cleveland.com.

The goal is to be more proactive with code enforcement, instead of the reactive, complaint-driven approach Cleveland has typically used, Martin O’Toole said.

Cleveland is embarking on this path to equip itself with more ways to address deteriorating housing conditions. A recent citywide property survey found homes rated to be in the best condition – those graded A and B – dropped from 78% in 2015 to 54% today. Meanwhile, C-graded properties rose from 16% to 37%, she said.

“Obviously we want to protect these properties from further decline,” Martin O’Toole said.

And it’s also a response to the large number of “business buyers” increasingly snapping up homes, then putting off maintenance and jacking up rent. The recent survey found that 54% of Cleveland home transactions are going to business buyers, which often use limited liability corporations to avoid personal legal accountability.

If the city is even able to find someone to cite with code violations for such properties, they often skip out on court dates.

At that point, “the housing department just throws up their hands and says, ‘I don’t know what else to do’.” Martin O’Toole explained. “So, what this [overhaul] does is provide more tools in the toolbox, to address those conditions on the ground.”

So, what are the changes, and how are they expected to be an improvement? Here’s a look at some of the major aspects of Residents First.

Local accountability

All homes in Cleveland that are not owner-occupied would need a “local agent in charge,” and contact information must be provided for them. That person would be legally responsible for the property, and the city could serve them code violations, or take other action against them.

If the owner is a person who lives in Cuyahoga County or one that’s adjacent (Medina, Summit, Portage, Geauga, Lake, Lorain), they can be the agent. If the owner is a corporation, or lives outside of Cuyahoga or contiguous counties, then the agent must be someone who lives in Cuyahoga County.

The goal is to force accountability, so nameless, difficult-to-reach corporations can’t escape consequences for home conditions. Such owners often use property managers or management companies, who handle all the day-to-day landlord work, such as rent-collection, evictions and maintenance.

“They’re doing all these things in place of the owner, but we were having to hold the owner accountable, who might have been over in, say, Greece,” Martin O’Toole said.

Under the reforms, the local person would be on the hook for legal consequences, civil fines and conditions.

Registry revamp

Today, the city requires rental properties to be registered. About 62,000 are, but the city estimates another 40,000 to 50,000 aren’t. The problem, said Martin O’Toole, are loopholes that allow owners to avoid registration, if they claim they’re getting nothing of value out of the home. Owners might claim, for example, that some cousin is staying there rent-free. Or, in one glaring case Martin O’Toole described, one person owns 25 different properties in Cleveland, but claims they are getting nothing of value from any of them.

The proposed registry revamp closes that loophole, she said.

Under the reforms, every owner of non-owner-occupied homes would have to register it as such and identify a local-agent-in-charge.

To legally rent the house, the owner would then have to get a rental certificate, which has several additional requirements. Those would include providing proof the home is certified lead-safe, fixing lead hazards if a child was poisoned there, fixing code violations, and making sure property taxes are paid up.

For buildings with four or more units, HVAC systems must be certified annually, and utilities must be paid up in cases where owners are paying for things like water or gas. This provision is particularly important for large apartment buildings, where the city has received numerous calls about residents living without heat, Martin O’Toole said.

Vacant property registration

Described by Martin O’Toole as one of the most ambitious aspects of the overhaul is a registration process for vacant properties, which often attract nuisances or safety issues that plague neighbors. Nothing like it exists currently for Cleveland’s some 10,000 vacant structures.

Owners of vacant properties would have to identify a local-agent-in-charge.

Before they could sell a vacant home, a city inspection would be required. If that turns up code violations, they or the buyer would have to put $5,000 in escrow (or more, based on inflation) and get it up to code within six months or so. If repairs are made in time, the escrow money is released. If not, the city would get the escrow money to repair the home or demolish it.

For all vacant commercial properties – ones with code violations, or those without any – a cash bond of at least $5,000 to $15,000 would be required upon registration. The city could draw down on that money to inspect it, make repairs or, potentially, demolish it.

If vacant property owners skip registration, the city could file affidavits of fact with the county recorder, which are intended to hold up future sales.

Until now, the city has essentially had two options for crumbling vacant buildings: board them up or tear them down. Under the reforms, they’ll have a new mechanism to force repairs.

“We’ve really been at the mercy of the markets. The markets dictated what happened – they either sold to somebody, who did whatever the hell they wanted to with them. Maybe they pulled permits, maybe not. Maybe somebody’s squatting. Maybe somebody moves in,” Martin O’Toole said.

With the reforms, the city hopes to avoid the either-or approach — preserve decent housing, if possible, instead of tearing it down or letting it sit.

“Not every vacant house needs to be demolished, nor should it. We have an affordable housing crisis…so this is just going to help us shepherd these into a better state,” she said.

Tickets and fines

The city has had no ability to issue civil tickets and levy fines for code violations, but that would be a possibility under the reforms.

The tickets, with fines of at least $200, could be issued for a wide range of code violations, including things like pest infestations, improper maintenance of walls and foundations, or, in apartments, having unsanitary common areas or non-functioning smoke detectors. Tickets could be issued every day the problem isn’t fixed.

Late payments would prompt an additional $50 fee.

If fines and fees aren’t paid, they would be assessed against property tax bills.

Martin O’Toole said it’s not the city’s intention to “over-use” such fines and it would primarily issue them for “true nuisance situations.”

One example she cited: The fire department recently found the fire suppression system not working at an apartment building near Shaker Square, creating major safety concerns.

The only option was to issue a violation notice, but with appeals, those can take several weeks to resolve in housing court. Meanwhile, residents are living in a building without fire suppression.

With civil tickets, the fire department could’ve issued $200 fines every day that the system wasn’t operable and “that’s definitely going to wake the owner up faster,” Martin O’Toole said.

Other additions

One major change would allow the city to fix up properties declared to be public nuisances, using money set aside for demolition. The city would bill the owner to recoup those costs. Martin O’Toole said this ability would be used sparingly, but it could help during emergencies, when, say, an elevator in a senior apartment building breaks down, and the owner doesn’t take quick action.

New tools to address overgrown grass are part of the reforms. Today, the health department must go to court to get authorization to cut overgrown grass on occupied homes. But under the changes, the city can simply provide 72 hours’ notice, and if it’s not cut by then, the city can trim it whenever is needed, for the remainder of the growing season. The property owner or agent would get billed for that, too.

Parking garage safety is another notable aspect of the new code enforcement plan. The overhaul would require inspections every five years and sign-off from the city. If conditions become unsafe, owners would be required to notify the city and fix the problem. It’s a response to growing complaints from residents, and recent incidents elsewhere, such as the August collapse of a Willowick garage that hospitalized two people.

“The question…was ‘how often does the city inspect parking garages?’ and the real answer is ‘when you complain about them’,” Martin O’Toole said of the current process. “I didn’t think that was adequate.”

Making it work

The change in approach likely won’t come without challenges, or criticism.

In many ways, its success will hinge on having enough code enforcers and other city staff to dedicate to the process, Martin O’Toole acknowledges. She said she’s trying to figure out the right number to hire, but believes she’ll be allowed to expand her team, despite a city budget that is already considered tight. Recent union contract changes will allow the city to hire entry-level code inspectors to augment certified staff, which are hard to find and retain, she said.

The punitive aspects of the overhaul could face pushback, as the city is looking to levy new, quick-hitting fines that could pile up every day that a problem is left unaddressed. And new, upfront escrow costs required to buy vacant homes could prove a hurdle for what Martin O’Toole described as the tiny minority of such buyers who are average folks, as opposed to business buyers.

Despite such possible effects, the aim is to improve Cleveland’s aging housing stock, and prevent homes from slipping into further disrepair. The reforms are the result of months of work by numerous city departments and others. Some reflect recommendations from the Vacant and Abandoned Property Action Council. Many reflect methods that were tested by Martin O’Toole in the small suburb of South Euclid, where she was the long-time housing director and won much praise for her approach there.

South Euclid’s size is far from Cleveland’s. But it is “the size of West Park, and in some ways that makes it a perfect sample size to test out things and to see how they work…So I’m basically taking what worked for me there, bringing it in here, and hoping it works,” Martin O’Toole said.

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