Criminal enforcement coming for Lansing’s red-tagged property owners

We had issues with internal processes and inept, unmotivated management for quite some time. It’s inexcusable, in my opinion.”

Lansing City Council member Adam Hussain

City officials are preparing to charge property owners with criminal misdemeanors misdemeanors for allowing people to live in red-tagged housing. 

“We’re ready,” City Attorney Jim Smiertka said Monday night. “The code makes it a criminal misdemeanor, which means we have to build a case, but we are ready.”

Conviction for allowing a person to stay in an unsafe dwelling can land a property owner in jail for 93 days and be assessed a court fine of $500. 

The move comes a week after 1st Ward City Council member Ryan Kost identified 46 out of 180 red-tagged properties in his ward as being occupied in violation of a city ordinance. A 47th such property was identified by City Pulse, working from the same list. Together, they represent over 26 percent of the red-tag properties in the First Ward.

Other Council members said that is also likely the case across the city, which has 705 red-tagged residences, city spokesperson Scott Bean said. That would mean people are living in 183 residences that the city has deemed unsafe.

Council member Adam Hussain, who represents the 3rd Ward on the southwest side and chairs the Public Safety Committee, blamed “inept” city management for the problem.

“I don’t think it’s a mystery,” Hussain said Tuesday. “Our frontline employees do a great job in trying to ensure safe and quality housing. Unfortunately, we had issues with internal processes and inept, unmotivated management for quite some time. It’s inexcusable, in my opinion.”

Retorted Bean, “It is mismanagement — mismanagement by the property owners. We’re working with the city attorney on ways to strengthen our enforcement now.”

He added that Mayor Andy Schor “also supports City Council changes reducing the days where we can go in and re-inspect and absolutely requires that the $150 fee is being charged when work is not being done.

“He also supports increasing this fee as a disincentive to leaving a house in bad condition and fully supports the requirement that any landlord that we find out is renting a place that doesn’t have a license is cited the $500. He would even be supportive of increasing that if we can under state law.”

The Council has raised concerns about Code Enforcement Office Manager Scott Sanford for years, without much action. He oversees 11 code enforcement agents and four premise inspectors. Code enforcement agents are the people who inspect rental properties for code adherence while premise inspectors write citations for exterior issues such as trash or tall grass. 

Two other employees in the department are state licensed to inspect buildings, including residential properties, to determine if the property can be occupied based on any structural concerns. John Snyder oversees the inspectors in the Building Department. 

Bean declined to discuss any actions or complaints the city may have against Sanford. 

“We don’t discuss personnel issues,” he said. 

Smiertka said a meeting is scheduled this week with Chief of Police Ellery Sosebee as well as Barbara Kimmel, interim director of the city’s Planning and Economic Development Department. She recently replaced Brian McGrain, who quit to run a nonprofit. The meeting will lay out the legal actions necessary for the Office of the City Attorney to proceed with criminal prosecutions. 

The issue of people living in red-tagged properties took on an added urgency on Feb. 1 when a couple living at 810 Beulah St. took their dog for a walk and returned to find their red-tagged house in flames.

Lansing City Councilwoman At-Large Carol Wood shared emails that show the couple who owns the property, Tamara and Stefan Farrell, own five other properties in the city. All six properties are in default on city property taxes to the tune of well over $14,000. 

City records reveal the property on Beulah had been red-tagged since Oct. 27 last year. It was tagged under the city’s Neighborhood Enhancement Action Team (NEAT). Properties deemed unsafe under NEAT have 90 days to begin repairs, or face $150 monthly monitoring fees. City records reveal the property has not been assessed a monitoring fee, despite being well past the 90-day free zone. No permits have been pulled for the property either. 

Once a property is red-tagged, a city inspector is expected to visit the property once a month. The inspector walks around the property, ensuring it remains boarded up and inaccessible. 

Bean said that in the last 12 months, the city was charging the fee to the owners of 275 to 320 properties out of 475 NEAT red-tagged properties. That’s $42,000 to $48,000 a month in red-tag monitoring fees.

The fees are split between the Planning and Economic Development Department and the city’s general fund.

Occupied red-tagged properties are only part of the problem the city is facing as it tries to regulate housing safety.

At-Large Councilwoman Patricia Spitzley raised concerns at a Committee of the Whole meeting Monday that inspected rentals are not being reinspected quickly enough. She cited a house rented by the woman who babysits her grandchildren. Spitzley said inspectors cited the home for failing to have smoke detectors in the basement. Before the residents or landlord could put them in, the property caught fire. The source of the fire, Spitzley said, was in the basement.  

“I just want to make sure we are getting back to those properties and making sure that they are reinspected,” she said. 

Doug Fleming, executive director of the Lansing Housing Commission, told the Council in an update on the commission’s work that it did not verify rental certification on any property that clients may rent using vouchers. Rental certification means the property has been inspected by code compliance and determined to be safe for occupancy.

“I would suggest that when your people go in and inspect a property, that just be part of the process,” said Wood. “They should just ask to see the certificate.” 

Another issue that has surfaced in light of the red-tag controversy is that the Code Inspection Office has been ignoring a provision in the rental code that requires property owners to have no arrearages in taxes.

Public Safety Committee members learned that for at least the last two years building inspectors had been certifying rental properties even when they still owed property taxes, in violation of a city ordinance. The department had been ignoring ignoring unpaid paid tax bill handed over to Ingham County to collect, as well as on any properties that owed taxes currently. 

“That was incorrect,” said Smiertka. “Even when it goes to the county, the person is still in default to the city.”

City spokesman Bean said after Kimmel learned this was happening, she implemented a directive that has “immediately gone into effect with all future registrations and re-registrations” for rental certificates.

Bean said Schor was unaware the rental certifications were being handed out even when a property owner owed taxes. Keeping property taxes up to date allows the city to fund property enforcement actions, as well as other services such as police and fire. 

How so many properties have fallen through the cracks remains a question. The city has struggled for over a decade wrapping its arms around rental properties and inspections, yet it never hired an outside consultant to review the operations of the department to determine what systemic issues are driving the failures. 

Kost, Wood and Hussain all expressed surprise the city was moving as quickly as it was to address the problems. The Council has been asking to amend the rental certification ordinance to require landlords to foot the bill for tenants who are displaced as a result of a red tag. The city of Jackson requires landlords to pay for to three months of relocation costs while repairs are made to the property.