Saturday, February 17, 2007

More about inspections in Carbondale - An intelligent response.

Here is my last post about Sheila's drive for bigger and more intrusive government. I have received a few responses, but this one was intelligent and well thought out. Wanted to pull it out and respond. From Anonymous of course -

As I understand it, you believe that the market will solve the problem of run-down houses in Carbondale, and your concern with Sheila Simon's proposal is that additional set of red tape and fees would be a disincentive businesses to locate in Carbondale.

I don't agree with the first belief. Once a landlord owns a property outright, a bad landlord can charge way less than everyone else and still make a nice profit. In most parts of Carbondale, property values are low enough that a landlord doesn't have to be all that wealthy to own properties outright, so it isn't that hard to be a bad landlord. All he has to do is find the student who is naïve enough to believe his unwritten, verbal promises about the repairs that are going to happen and clueless enough to not check around the Web for complaints about the landlord. In a student housing market that turns over every few years, it isn't too hard to find that naïve student. Instead of sitting empty, that house in bad shape is occupied with a poor student who learned a lesson the hard way. Yes, the bad landlord could make a lot more money by charging market rates and maintaining his building, but he's lazy and thinks of the rentals as passive income rather than as a business. Perhaps a more ambitious landlord will buy the lazy landlord out and create better housing in the area, but the market doesn't guarantee that outcome, and it certainly doesn't guarantee that the buyout before the building becomes an eyesore.

What about Sheila Simon's proposal? It would fall on all landlords, both good and bad. In some ways it could hurt the good landlord more. While the good landlord calls the tenants in advance to let them know that the inspector is coming, the bad landlord just shows up one day with an inspector. While the good landlord walks around with the inspector to find out exactly what the inspector looks for and what remedies the city considers acceptable, the bad landlord chats with his friends on his cell phone. Although the inspection is a hassle for both landlords, the good landlord has a lot more extra work than the bad landlord who just pays his fine and does minimal repairs.

Since it is in the city's interests to avoid blighted properties, it is sensible to do something to prevent them rather than paying off property owners after the blight. Perhaps Sheila Simon's proposal isn't the best way to prevent blight, but doing nothing isn't either.

One thing that I've thought of is to make inspection worth more to the landlord than just avoiding a fine. Restaurants in southern California prominently display a simple letter grade that they get from the health inspector. Restaurants with poor letter grades lose business. Should rental properties in Carbondale prominently display their ratings from the building inspector? Would that be enough to keep the naïve student from renting the cheap apartment from the bad landlord?
This is a well reasoned set of ideas, but at the most fundamental level I don't agree with your conclusions.

Here is what we agree on, that Capitalism is imperfect and sometimes doesn't give us the results we want (though using great effort really helps). Then we part ways, you are in essence claiming that the Carbondale City Government can be run in an almost perfect way, so the results of the city government are better then capitalism. Think about this carefully and give me some examples, I'm going to claim now that there are very, very few instances where government performs better then capitalism.

Where I do think that there should be rules and our rules is one of the reasons you should live in Carbondale instead of right outside of town. For example, you will not have a Super Walmart appear in your back yard because of our zoning laws. There are almost no fires in the City of Carbondale, because of the construction inspections. OK, so we are together there.

Carbondale is a small town and the laws are enforced unevenly, on a historical basis. For example, there is a funeral parlor that has built a crematorium, without permits and inside the setback, in the back yards of "THE ARBOR DISTRICT". The state plumbing inspector is well known to be corrupt and punishing outsiders with expensive plumbing work (or he could just be getting kickbacks from the plumbers, I can't quite figure that one out). Under Neil Dillard (and Tom Redmond, Sheila's campaign manager), the city hall zoning department did their best to stop every business project in town through negative readings of the rules, poor communication and generally being obstructionists. You are right, that when Brad became mayor the zoning problems was greatly eased, it is amazing what a little management can do.

Another problem is that you are making assumptions about what is better for the city based on very limited information. So you don't like seeing unkempt (got to love spell checkers, I didn't know how to spell that word before) yards and houses that are less then perfect, that is just to darn bad isn't it? That isn't against the law anywhere in this country, but it can be enforced by contract by home owner's association's and the like. Doing building inspections weekly isn't going to change the cosmetic appearance of these buildings.

Some rental units in this town are empty and the students are choosing to live in beat up houses, could it be that those students know what they want better then you do? Could it be that the students don't need the city's noble protection? If SIU had 25,000 students, then maybe this would be different, or maybe not? Are these students dieing or being injured by living in these old houses? No more then the students living in apartments and dorms I bet.

If Carbondale really needed another army of inspectors there would be warning signs, for example we might see lots of fires? Lawsuits from students who have fallen through their floors or the like? Does anyone see that?

As usual, as politicians start their 100 meetings with their committees and constituency groups, the business world has taken action. The worst rental houses in Carbondale are being torn down and replaced or fixed up (does anyone want to jump into this and say this isn't happening?). While politicians talk, the business world has already jumped.

One of my frustrations with professors, state employees and other people in the public sector in Carbondale is you guys have been on the reservation to long. The USA is a incredibly efficient capitalist machine. Capitalism isn't perfect, but it is better then all of the options. So many people in Carbondale and Illinois don't honestly look at results of this huge government machine we have made (and their trailing costs). I guess, if you are part of the system it is hard to admit there is a system wide problem. More government isn't the answer, we have plenty already.


Anonymous said...

American Capitalism would not last 5 minutes without the aid of Big Daddy Government. Cheap oil (thanks in large part to our military), farm subsidies and higher education have made America great. I guess it is hard to see the Big Picture when all you have ever done to run a couple of tiny firms. ;)

As to the mundane matter of Carbondale landlords, they are a real problem. I have rented in several college towns, as a student and a faculty member (and when I worked in the real world). I have never seen such a bad lot of landlords. We need a tenant's court. Landlords ripoff renters in many small ways. Tenants need a place to, for example, get back their secruity deposits (if they can rip me off image what they are doing to students) and get basic repairs made. SIU needs to do a much better job in educating its students about their obligations to their landlords and the community. I do not know if more inspectors would help. I'd like to see a comparison of inspection systems with other towns. It is up to Simon to do this if she want to make a case for this change.

Students do not have a right to howl at the moon. In some college towns police can close parties as soon as they see a problem and do not have to wait until someone calls in a complaint. This I believe has lowered the number of fines. It took me several months to get an illegal frat house closed in my R1 neighborhood. It should not have taken that long; in fact it was the University that finally stepped in. I have every right to push for my government to protect my neighborhood. "Democracy is the worst form of government, except for all those other forms that have been tried from time to time." []

I think Cole has been good for C'dale business and I may well vote for him. But this is an area that needs improvement. If Cole wins, I hope the campaign debate on this impresses him enough to explore other options even if they do not mesh with free market ideology. Consider that university towns have highly distored rental markets - many more young and short term tenants than normal - because a State institution brings them in. We should recognize this and seek pragmatic solutions without getting hung up on ideology. Call it evidence based government.

Peter in Carbondale said...

Every government that is truly functional on the earth subsidies and controls energy. Another way of looking at it is you have to have the roads to move your army in self defense. They also subsidize and control agriculture to prevent their food being cut off in times of war. Your assertion that this is somehow unique to the US government is foolish. Now, if you are asking my personal opinion about "W", Chaney and their oil company give aways, they stink.

Since every other country with the means is doing the same energy and farm tricks as the US, why do we create most of the technology and make most of the profits in the world? I guess you could point to our national subsidy of higher education and our super efficient capitalist economic engine. Of course, these efficiencies give us an unbelievably high standard of living and makes us the biggest consumers of fossel fuels too (but our capitalist system should solve the energy problem within 20 years, so stay tuned).

I agree with your that stepping back and looking at the big picture would be helpful, the problem is you forgot to do it.

I understand why many of the reasons that the housing stock is as it is in Carbondale, but who knows why is it so messed up? It was all built around the same time, SIU grew to fast, Carbondale didn't have zoning laws so the entire town converted over to student housing in just a few years. We now have the mess we have. The good news is that new apartment projects have sprung up around town at record rates in the last few years. Check the ad from Henry Fisher's company with open house rentals in the DE everyday, I assume those are open houses and not rentals for Fall. It looks like the market is working to me, just not as fast as people who are used to Sim City would like.

Was the US Constitution specifically repealed only for college students? Why don't they have the right to own or rent property and live an enjoyable life? They simply do have the right to howl at the moon, hold parties, take all the parking spots on a street and trash their front yards. They can't break local ordnances, but next thing you are going to tell me is you don't speed, roll stop signs or smoke dope with your friends.

You are of course correct, when someone rents a property and then breaks a zoning law, it takes months of hard work to stop it. That is the way the legal system is supposed to work. I give you that it is frustrating to live next to it, but that is the way it works. Where there are problems, I think the US justice system is the best one on the Earth. I want a liberal, innocent until proven guilty system. I want the US Constitution to be followed by the government, I also want "W" impeached for his worldwide illegal wiretap program (but I'm not holding my breath).

SIU doesn't have to provide their students with the same protections as the Constitution, they can bully their students into action (like closing down a bad rental) much faster then the city. With a misplaced frat house, they really have power to fix it. This just makes sense. Businesses is even more efficient of course, except rental owner dealing with renters. Renter have lots of legal rights.

I think the housing stock is a problem in Carbondale too, but it is one that is largely outside the power of the local government and beyond the will of the voters. For example, one of the quickest ways to improve Carbondale housing would be to rezone the city and destroy the property values of many slum lord's holdings. I don't see the people of Carbondale having the will to do this.

So on one hand there is ample evidence that the market is working, slower then you would like maybe, but working. It is easy to go see the new units on Grand Street alone if you need examples. But, until the houses zoned for rentals stop being worth more then single family housing, the dream of neat rows of small houses, with families and white picket fences isn't going to happen.

Sheila's chest beating platform of enforcement and a turn around of Carbondale's rental market isn't going to happen. The economics just aren't there. Would you spend $100k to fix up a $75k house, to make it worth $125k? Right, no one else does either.

In summary, I think the ideas expressed in these two comments (the one that kicked off this entry and the next one) are only paper thin analysis of the issues at hand. The world is far more complected then this. This commenter has lots of potential, but just isn't up to snuff yet.

Anonymous said...

Sheila's chest beating platform of enforcement and a turn around of Carbondale's rental market isn't going to happen. The economics just aren't there. Would you spend $100k to fix up a $75k house, to make it worth $125k? Right, no one else does either.

That's a silly example. I moved into a house and did less than $5000 work (99% of it cosmetic) and it has nearly doubled in value. The economics are there; the will is not.

Peter in Carbondale said...

Your argument only works if your time doesn't cost anything. I guess one of the great things about having full pay and working 20 hours a week is you do have time to throw at fixing up your house. Let me also suggest that your $5000 fix up metric wouldn't work on a majority of houses being discussed.

BTW, is your house zoned R-1 or in the rental area?

I did the same thing when I was 24 in Silicon Valley. Bought a house and fixed it up with my bare hands. Made about $30k profit in 9 months. Of course, later I worked that hard to start companies and make a whole lot more.

I guess you have to choose how to spend your time and energy. I'm proud of you that you think you are up on your house purchase. It is a contribution to society.

I wonder if more professors worked that hard at SIU and earned 12 months salary, got big grants, published books, filed patents, and generally were stars, but outsourced home fix up to high school educated carpenters the world wouldn't be a better place?

How many SIU professors aren't in their offices because they are doing home fix up? How much research time is spent putting down a new subfloor? How many sabbaticals have been spent building a new house (outside of city limits of course)? What is the opportunity loss of professors and other SIU professionals deciding that HGTV is more important then their jobs?

Southern Illinois is a weird place, so many professionals think it is a good thing to do as little as possible at work.