The City of Pearl’s refusal to allow restoration of utilities services to apartment units after they are vacated has left landlords worried they soon won’t be able to pay their bills.
An estimated 150 rental units throughout the city are vacant and landlords have no idea when they can begin filling them, said Steve Maulding, who along with his wife owns several complexes in Pearl.
“This is our retirement,” he said of the properties. “We’ve invested everything we’ve got in them.”
Stephen Smith, a Jackson lawyer representing the Mississippi Multi Family Council and Maulding and other Pearl apartment owners, asked U. S. District Judge Henry Wingate of the Southern District of Mississippi for an expedited hearing three weeks ago on a motion to force restoration of the utilities services. Wingate has not acted on the request.
Wingate in late December promised a prompt ruling on Smith’s challenge to Pearl’s new rental ordinance that specifies a range of new conditions for registering multi-family units, including building below-ground storm shelters for residents and retrofitting apartments with interior fire sprinklers.
Meanwhile, apartment owners are forced to turn away prospective tenants. “People are sleeping in cars” as they wait to rent empty apartments, Smith said.
The lawyer said he questions why Pearl’s Board of Aldermen put the new conditions on multi-family housing and not other types of housing or buildings. “The only people who have to adhere to these onerous conditions are people who rent,” Smith said. “Why aren’t others having to?”
Pearl’s rental ordinance, adopted in June 2014 and put into effect on Oct. 1 of the same year, has also targeted mobile homes. While the City has obeyed a Circuit Court order to let mobile home parks fill vacant lots, it is refusing to allow utilities hookups to mobile homes placed on the lots.
Jackson lawyer John Corlew, who has sued Pearl in federal court on behalf of several mobile home park owners, said in court papers Pearl is unfairly targeting specific classes of dwellings. The ordinance is directed specifically at rental properties and mobile home parks “to the exclusion of other properties,” Corlew said in a suit filed last August.
“The code is designed to place economic burdens on its target class,” Corlew’s suit claims, and is “an effort to destroy the economic viability of rental properties.”
Mayor Brad Rogers has led the effort to set new conditions on rental properties and mobile home parks. He did not return a phone call Tuesday. City Attorney James Bobo could not be reached.
In the past, Rogers and other city officials have cited public safety and the potential for mobile home parks and multi-family rental complexes to hurt the value of nearby properties. Bobo, who has been Pearl city attorney since 1995, said previously he wrote the rental ordinance after concluding Pearl had created a void in public safety through lax land-use policies.
“Now, the city leaders could sit on their hands and hope the folks in apartment buildings don’t burn to death… or they could sit on their hands and ignore the fact that Pearl is located in one of the most active tornado alleys on the planet,” Bobo said in an early 2015 email.
Without Mayor Rogers’ participation, Pearl’s Board of Aldermen agreed last week to make a confidential settlement offer to Smith and his clients. The offer is hardly satisfactory, Smith said in an interview Monday.
The offer, he said, “can’t be read to have been made in good faith.”
The proposed settlement “is so convulsed I can’t tell what is in it and what is not,” Smith said, declining to give any specifics of the offer.
Another Smith client, Albert Moore, owns several Pearl rental complexes. He said financial losses are mounting and the value of his properties is sinking. “We need action out of Wingate,” Moore said.
Moore said he wants no part of the settlement and is especially disdainful of a provision that would keep owners of multi-family properties from requesting rezonings for 10 years or initiating legal challenges to rental property rules enacted in the future.
Pearl in 2011 rezoned multi-family properties to commercial classifications, leaving existing rental complexes as non-conforming uses. Maulding said that action has made it impossible to either sell or refinance his properties. “The bank is not going to loan any money on it because we have lost our multi-family zoning,” he said.
Potential buyers whom he said once “drove him crazy” with offers have quit calling.
More trouble could be ahead for Maulding, Moore and owners of other residential rental properties and mobile home parks. Rogers and the Board of Aldermen have agreed to consider a far reaching ordinance that would erase all “non-conforming” uses from the city’s property rolls. Manufactured homes and apartment complexes would be specific targets of such an ordinance.
The action would be a continuation of ordinances unfavorable to rental properties and mobile homes going back to the 2011 elimination of multi-family zoning. In June 2013, the mayor and aldermen adopted a minimum size requirement of 1,400 square feet for mobile homes and set size requirements for multi-family apartments ranging from 850 square feet for one-bedroom units to 1,500 for units with two or more bedrooms.
The recent halt to utilities connections stems from Pearl’s decision to step up enforcement of its 2014 rental ordinance, according to attorney Smith. In addition to the public safety requirements, the ordinance required annual registration payments of $25 a unit and inspections of vacated units before re-renting them. Without the registration, however, the inspections can’t take place.
The yearly $25 a unit registration fee represents a huge amount of money when applied to each unit in a complex, Smith noted, calling the registration “nothing but a ruse.”
Rental property owners for now fear a hard freeze could cause pipes serving vacant units to burst, resulting in water damage to entire apartment buildings, according to Smith. “They are susceptible to that without having electricity on in the units,” he said. “There is no heat in the units.”