Do you see this as Good?

Question

Hello BP! I was reading my local online newspaper in my home city this morning and came across something. Longview has had a really big (for this East Texas town) crime wave as of late. At this time, more than half of the homicides in the last 15 months are unsolved. Other than two domestic violence cases, police said narcotics and other illegal activities were involved in some way. That is clearly not only concerning but bad for the community as a whole.

My long term buy and hold strategy is founded on investing in my own back yard. As part of the city's plan to address this issue they are working on several fronts in the community. One of them really caught my eye! This from the article:

The city is looking at ordinance codes and plans to raise the standards for rental properties. Dean addressed the problem of the “slum lords” that profit off of low income rental properties and have no regard for the quality of life in the community. Also, there is a plan to coordinate with the Attorney General’s office to use to Texas Nuisance Abatement Statute to prosecute repeat offenders. As it stands now, it requires six complaints to take action. Dean said that is too many.

I see that not only as a good thing but a GREAT thing. 1 - it's good for the community. 2- It will force the bad landlords that give the business a bad name hopefully out. That is where I see opportunity! The "slum-lords" are not going to want to put money into a property, they will just want to sell out and get out.

I get that buying and holding rental properties in these areas that have had high crime of late is a risk. I totally understand that. But risk coupled with re-vitalization can also equal big reward. I see that not only as an opportunity, but as a good thing.

How about you?

Jeff Rabinowitz · Answer

I have been selling some of my rentals because the inspection department is difficult to deal with. They increased the frequency of the inspections and the inspector is unreasonable. I keep my properties in good condition (I did complete rehabs on some). Most of my tenants stay for years and treat my properties as their homes. They also work and multiple inspections is a burden for them. I stopped registering my properties in that city to save my tenants the grief.Like most government progams, the inspection process becomes a revenue generator and is often abused. Are annual furnace inspections necessary (even if it is only one year old? Do you have your furnace inspected annually? Do you think the homeowner next to your rental does? It cost me `$100 for the furnace man to inspect and the City charges $75 for their inspector to go out. That unnecessary cost and inconvenience is borne by the tenants. The inspection program can become counter productive. When it becomes unreasonable the good landlords leave town and the only ones who stay are the ones who never complied with the regs and never will. The cities can issue all the citations they would like but they have little real power to force compliance. When they select for the non-compliant landlords they end up hastening the decay they claimed to want to control. In reality, it is just a way for the city to increase their revenue and power--but it is temporary.

James Wise · Answer

Has its pros but also has its cons. Cities can sometimes make doing business very difficult.

Jonathan Key · Answer

@Michele Fischer

Okay now I have a new place to visit so I can say I have been to TWO Longviews!! I feel like I have a new neighbor!

I am hoping the city does not go too far off the deep end. One thing about this Longview is they are not progressive and they do not move fast for anyone including themselves! So I will keep my fingers crossed and let my fellow BPrs know what happened.

Stay warm neighbor!

Dana Whicker · Answer

OMG that is so bad.  You're most likely going to end up hating that ordinance.

Account Closed · Answer

I only buy distressed houses in what some would deem 'high crime' areas in my city. Whatever. As you probably have seen on my other posts, I owner finance my houses in these run down areas with really good results. Revitalization of poorer areas is a great thing! I'd say yes that higher standards for rental properties in a town is a good thing :)

Michele Fischer · Answer

Jonathan, greetings from the other smaller Longview!

On the surface this seems very good, to improve the neighborhood and discourage slumlords and problem tenants.  I'm 100% behind that.

I'd be concerned, though, as it can backfire.  In our city violations go to the owners rather than the tenants, and they are almost always caused by the tenants.  We had a tenant move out by dumping the majority of their belongings into the backyard and alley.  It took us several days to get it cleaned up, which seemed reasonable, but we caught flak from the city.  No matter how much screening you do or rules you have in the rental agreement, your tenants can be a contributing factor.

I'd rather improve a neighborhood with involved citizens, grant money, the support of the city, and relationships with other landlords than have it legislated.

Bryan N. · Answer

The city can address the slumlord problem with new codes.  Those codes will affect honest landlords, not slumlords.  Why?  They are slumlords for a reason.  They live beyond the codes.

Here is a VA example.

The Governer decided that xx% of state contracts have to be awarded to women and minorities.   Good cause and good idea.  Oh wait... No it wasn't.  Why?  The businesses that compete for these simply switched the owner to the spouse.  Or, their spouse/minority partner started a company and then subcontracted the original company.  Who lost business, money, and their livelihoods?  The honest business owner...

Tom Keith · Answer

Contact your Council person and ask.  They may not have enough quality people to serve.  I served on the Community Development Advisory Commission working with the Federal CDBG funds.  I served for 8 years.

Jonathan Key · Answer

@Tom  Keith I live int he city limits but it is 'technically' part of Harrison county, although I don't think it may mater to the city of Longview. We have the Housing & Community Development Advisory Commission, but the deadline to apply to serve on that commission was March 1st. Next year maybe, I will keep you posted.

Tom Keith · Answer

@Jonathan Key  I missed that story but Thank You for bringing this issue to Bigger Pockets where so many REI across America can reflect and respond to this post.  Jonathan, are you in city limits?  If so, I would make it your mission to be in on the creation of Ordinance Change for landlords.  Call your city council person and ask to be part of discussion.  Ask if I can be there as well.  I do not live in city but plan to invest in My Home. I have been there before and it can get ugly.  I have always wanted to rebuild the area that has lost homes and has way too many distressed properties.  Keep me in Touch. Thanks Jonathan.

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