Highspire enacts rental inspection ordinance;

Last week, on August 17th, Highspire Borough enacted its rental inspection ordinance, requiring investors to pay for inspections of their properties once every three years and pay $75.00 per inspection per unit.

I and a representative of GHAR attended the meeting and raised many of the concerns that I have featured on this blog.

In particular, I pointed out that section 1 of the ordinance contained factual findings regarding the condition of rental properties in the Borough. I asked that the public be told the factual basis for these findings prior to any vote. I argued that the basis for any factual finding should be provided to Council before the Council actually votes. There was no answer to this inquiry.

I pointed out also the potential for reducing real estate values as a result of increased costs imposed by this ordinance.

I reminded the Council of the failure of Harrisburg's inspection ordinance over the past 15 years. In the only response of the evening (aside from the unanimous vote in favor of the ordinance), councilwoman Dorothy Matesevac stated that Highspire was not Harrisburg. As John Wayne pointed out in Rio Bravo, "I'm gonna remember you said that."

The very differences between urban and suburban areas are what require municipalities to document any factual findings regarding the condition of rental properties before adopting an ordinance of this sort. Stay tuned for further developments.

Highspire Borough rental inspection ordinance 582; Real estate values threatened.

As I wrote earlier, Highspire Borough has scheduled a vote on a rental inspection ordinance that will require the payment of annual fees to the Borough and the inspection of each rental unit every three years.

As of 2000, roughly 44% of the properties in Highspire were rental units. If the Borough enacts this ordinance, they will decrease the value of 44% of the real estate in the Borough. Real estate, especially investment real estate, derives its value from the net income it produces. As costs increase, value decreases. It is fair to say that if those 44% of properties targetted by the ordinance decrease in value, the other 56% will not exactly increase.

Ordinances such as Highspire's became widespread across Pennsylvania during the past decade and a half because municipal officials bought into the myth that real estate values "always go up" no matter how much that real estate is hampered by municipal interference and regulations. We are slowly finding out how much of a mistake those officials have made as real estate values stagnate while inspection ordinances fail to achieve their stated purpose.

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previous - The failure of Reading's inspection ordinance.
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update - Harrisburg's failed inspection program.

Highspire Borough proposes rental inspection ordinance; Ordinance 582

The Borough of Highspire in Dauphin County is poised to enact a rental inspection ordinance (Ordinance 582 of 2010).

It appears that under the ordinance investors would be billed "Tri-annually" for "the total program costs." (Section 9. A.).

Owners could hire their own inspectors from a list of qualified inspectors maintained by the Borough. The cost of these inspectors would be in addition to the amounts billed by the Borough. Otherwise, the investors would have to use Borough inspectors.

This Ordinance is set for a vote on August 17, 2010.

update - Ordinance 582 and real estate values.