Tube City Almanac

June 29, 2009

Journalism Worth Reading

Category: Commentary/Editorial || By

In case you missed it, Adam Fleming's cover story in the current issue of Pittsburgh City Paper is well worth reading.

(City Paper, despite being a "free entertainment weekly," does some of Pittsburgh's best reporting into urban living, and that includes issues in the Mon Valley.)

Fleming explores an increasingly serious problem in Pittsburgh, McKeesport and other older communities. Because real-estate values are so low for older single-family frame houses, people are buying them off of the Internet, sight unseen.

Most of these buyers claim they intend to "renovate" the houses and re-sell them, but that's generally speaking a load of bull.

In most cases, what they intend to do is rent them as cheaply as possible, usually to people on public assistance, until they're uninhabitable.

. . .

Do you want to see the results? Take a ride up Stewart Street in McKeesport, and weep.

When I was a kid, it was a proud neighborhood of working-class people from all nationalities and races. My aunt lived on Stewart, and my grandmother lived a few houses down on Maple Street. Now it's infested with crummy-looking rentals.

On the 2500 block of Stewart, for instance, all 10 houses are owned by landlords who live somewhere else, according to county tax records. One is owned by a Canadian real-estate investment trust. Three of the homes are condemned.

. . .

Eventually, when these houses can't be rented because they're falling apart, they're abandoned to the elements. Then they're torn down at the city's expense, to the tune of $8,000 to $10,000 each.

As Fleming notes, municipalities have almost no recourse when this happens. Even if you can find the landlords --- often they hide behind P.O. boxes or shell corporations --- courts don't extradite people for building code violations.

. . .

The municipality can file a complaint with the local magistrate, but when the property owner's in another state, the fines are unenforceable and uncollectable.

There's no "return for code enforcement," the mayor of Mount Oliver tells Fleming. "The time and effort we put in, they get a slap on the wrist."

Many --- not all, but a sizable number --- of the renters are people who have been evicted from public housing because of criminal records or drug problems.

The landlords are out of state, so they don't care if the tenants throw garbage in the front yard, have parties at all hours of the day and night, threaten or intimidate the other residents, and generally wreck the neighborhood.

. . .

And it's not always the tenants who are at fault --- even good renters have a hard time keeping up with the maintenance on a 1910-vintage wooden house, and these structures can quickly go to seed if the landlord doesn't help.

Entire blocks of the city are now infested with these kinds of houses, as are Duquesne, Braddock and Clairton.

Glassport, Trafford, Pitcairn and Wilmerding are getting slammed now, too, and Port Vue, West Mifflin and Whitaker are also starting to see the same problem.

. . .

If your neighborhood hasn't been hit yet, just wait. Eventually, one of your elderly neighbors will die or go into a nursing home. There's a reasonable chance that their heirs will sell the house cheaply to some budding, out-of-town slumlord.

Fleming talks to one of the "investors" --- Tami Twidwell of Beaverton, Oregon --- who recently bought five houses, including three in Our Fair City.

One of those is "gutted" and "abandoned" --- meaning "worthless." She claims the seller lied about the condition of the properties, which she never saw before buying them.

. . .

Twidwell, who claims her intentions were pure, tells Fleming: "I know this all sounds ridiculous, and I sound like the stupidest person in the world."

Yes, she does sound stupid. Here's why: She bought five houses that were 2,500 miles away without seeing them first.

And I have no sympathy for her, especially when Twidwell complains that Pittsburgh code-enforcement officers are harassing her with citations.

"Harassment" doesn't describe what I wish would happen. I wish Twidwell could be forced to live in one of her crummy houses, like Joe Pesci in The Super, but the law doesn't allow that in real life, just in bad movies.

The Mon Valley was knocked into a deep hole 25 years ago. It's damned hard to crawl out when the Tami Twidwells of the world keep throwing dirt on our heads.






Your Comments are Welcome!

Jason it really shows in this article how much you care about Mckeesport & the people stuck living in these areas. Your right, slumlords should be forced to live in these houses for at least 90 days. Again, I repeat this a great site and thank you for all your time and effort. I am an ex-Mckeesporter.
Mike - June 29, 2009



Buying up property, unseen, via the Internet has been going on for some time now. It crazy and can be profitable. These houses also become another place to cheaply hide illegal immigrants until they melt into society.
Scott Beveridge (URL) - June 29, 2009



Jason,

Excellent reporting. I appreciate your passion for this issue as well.

A good question for these internet slumlords and flippers would be “How much transfer tax did you pay on your $1000 house?” I bet the answer is zero.

As these real estate issues are a problem in all distrssed communities, perhaps we need national or state wide legislation to allow municipalities more leeway (without infringing on landlord/owner Liberty) to move faster with these properties. It seems from listening to Dennis Pittman and Bethany Budd-Bauer that the red tape it takes to get abandoned structures away from deceased, negligient or unfindable owners is considerable.

The Internet, which we choose to use for good, contributes to the dilemma. Everyone wasnts to buy cheap sell high. In McKeesport, these “experts” are buying low and…. not much else. It stinks of a Ponzi scheme. Last one holding the abandoned house loses.

In fact, what happens is that all of McKeesport loses. THe house is lost to the elements, we spend money to tear it down, the neighbors have to deal with the rodents and crack heads, no tax money collected.. and so on.

Seems like the only people who make any money here those doing demolition, excavating and grass planting…..

I’m also concerned with folks buying up these lots and squatting on them hoping Mckeesport gets better and they’ll get wealthy.

We don’t need folks “hoping” McKeesport gets better. We need folks “making” McKeesport better.

For this, it will take vision, out of the box thinking and commitment to seeing the vision through to a postive conclusion.

I have several ideas for addressing this problem that I have discussed ad nauseum such as $1 abandoned house sales to owner/occupiers. Other elected officials have said “We’re not in the Real Estate Businesss”. Agreed. We are not. At least if we are, we are doing a poor job of it. Perhaps in the short term, until this economy and economic downturn subside, we need to be.

Not so much to own properties but to take quick and smart action to get them rehabbed and owned as soon as possible.

I have some ideas but am just learning about real estate and the laws that bind our hands. I would appreciate any ideas your readers have to help.

Those of us who love it here and chosen to stay have “skin in the game.” Like it or not, we are all in this together and it is going to take more than a few people and some one time stimulus $ to make things better.

Paul
Paul Shelly (URL) - June 30, 2009



Jason,

Help me with some math, because I’m trying to figure out how this scenario could be at all profitable for the landlord. What is the typical sales price, monthly rent, and rental period? In other words, are slumlords holding these properties long enough to make a profit on the initial investment? Could it be that the only folks making any money here are the brokers skimming their commissions off the sale?
Dan - June 30, 2009



Dan:

You can buy a two-story frame house in parts of the Mon Valley for less than $20,000, sometimes $10,000 to $15,000.

You can make minimum repairs (GFCI outlets, handrails, etc. to meet HUD requirements) for less than $5,000.

If you rent it for $600 a month (subsidized through Section 8) you can make back your nut in five years, even considering property taxes.
Webmaster - June 30, 2009



P.S.: It’s not just dilapidated houses that are cheap.

I bought my house five years ago, when houses were selling as fast as they went on the market.

I paid $60,000 for a house in move-in condition, with a new kitchen and bathroom, a deck, an attached garage and about a 1/4-acre yard.

As Mike Mauer from Mon Valley Initiative says, “you can live like a pasha” here for $32,000 a year.
Webmaster - June 30, 2009



Thanks for the explanation Jason. To really make a nice profit though, the owner would have to hold for 7 – 10 years, sounds risky if the home is being rented to a string of undesirable tenants. I still think if it’s primarily being done via the internet for “investors” then the people making the most money are the ones in the middle. I’ve been to Beaverton, it ain’t that nice. It smacks of small time players trying to act like The Donald. I hear you on property values, the wife and I have thought many times about “cashing in” here in Northern Virginia and moving somewhere with a lower cost of living. Trouble is…we kind of like it here.
Dan - June 30, 2009



The city needs to find a way to start charging these slumlords for “Security” they should be allowed just a few police calls a month before they start getting charged for the call to the house. For example a structure located just across from the Hospital is always tying up the police force responding to calls of the nature of parents breaking up sibling squabbles. It’s time that the landlord is held somewhat responsiable for what he is placing into his/her “Units” if you start charging them $100.00 a pop for each police call and $500.00 a call for the Fire department to open doors for these tennants each time they lock themselves out I bet that they would keep a closer watch on who they would be renting to.
It just makes you sick….............
Cox's Jimmy - June 30, 2009



Oh, Dan, I totally agree that it’s a fool’s game. That’s the math people are using, but I doubt it actually works for most of these so-called “investors.”

A lot of these people buying houses off of the Internet are greedy, quite frankly, and greedy people are often not too smart.

What did W.C. Fields say? “You can’t cheat an honest man”?

And Jimmy, I like your idea, but I’m not sure it’s constitutional. People have a right to equal protection under the law.
Webmaster - June 30, 2009



Jason I agree with you the most important thing in life as a United States Citizen is are constitutional rights and yes I wouldn’t want to see anything infringe on them.
But Mckeesport seeems to be in some sort of diffrent astral plane where the world rotates backwards and everything that is normally up is down, Oh wait a second let me put my rose colored glasses back on…..Ahhhhh everything is fine again :))
Cox's Jimmy - June 30, 2009



How about this?

Why can’t we take the money that the Mayor literally begs from the state government and tear down EVERYTHING that is uninhabitable? Do it all at once, call it the Summer of Love or something, I don’t care. Maybe sell some t-shirts, hand out sno-cones and funnel cakes. The reason these houses are bought up for cheap and rented out is because they’re THERE. Get rid of the inventory, and they won’t have anything to buy.

The Mayor loves to complain about how 40% of the property in town is rental property, but I’m sick of hearing the complaints. If you don’t want renters, get rid of the rental properties. It’s apparent that local government isn’t trying to go after absentee landlords to pay the taxes they owe, or cite them for violations, so we need to cut our losses and get rid of blight. The City needs revenue, and the Check Cashing and Dollar General stores aren’t what I consider worthwhile taxable income. Get people who will pay their taxes and not live off public assistance someplace affordable to live for F’s sake. I’m sick of this.
John - June 30, 2009



I grew up on the 2700 block of Stewart Street, my folks are still there.
It is sad what has happened to the neighborhood, for years I would bring the family back to visit without a worry, now it’s actually dangerous.
Bill Jackson - July 02, 2009



Hello!
Whenever you own a business there are several “Business Related” taxes that you are required to pay. One off the top of my head is the Mercantile tax. To me, landlords are business owners – They make money here in our city. I do not understand how landlords are not required to pay these type of taxes. I’ve had several politicians tell me that landlords pay property taxes so that is considered their share. Well business owners pay property taxes as well in addition to the business related taxes. Around 50% of the city of Mckeesport is rental property. Think of the amount of income that could be generated if these taxes were put in place!!!! No one can give me a good reason why we can’t do this. Any input???
Bob - July 02, 2009



John, you are correct! The Mayor isn’t going to do anything about this rental property situation…. Half of his administration and police force own them… Look into it – You’ll see.
Bob - July 02, 2009



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