Janesville Should Follow The Law With House-Flipping Program

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Saturday’s Janesville Gazette contained a story on the city of Janesville’s Buy, Rehab and Resell Program, a program designed to buy homes in older neighborhoods and rehab them into efficient living quarters to help revitalize economically stagnant and blighted neighborhoods. Great idea, in fact, many homeowners have had those same wonderful ideas for years in Janesville only to be discouraged by something called the 50% rule.

The Gazette article explains the city plans to buy a two-flat in one of the city’s high density neighborhoods for around $65,000 and restore it back to a single family residence. But here’s the problem.

JG Excerpt:
The city will work with community action to make energy improvements, and the estimated total cost of the work is about $90,000 ……

Whoa Nelly! Not only does that conveniently consume the remaining money left in the Federal Block Grant, it violates the 50% rule by quite a bit.

The total assessed value of the property in question is $49,800 with $40,200 of it on the structure itself. According to state and city ordinances this leaves room for only $20,100 in improvements. Even if they re-assess to 100% of fair market value, closer to the $65,000 asking price, the city would be limited to spend only $32,500 for improvements, a far cry from the $90,000 they expect to pump into it.

When a private homeowner wants to pour thousands of dollars beyond the 50% value of their home to decrease density, increase owner-occupied properties, help stabilize their neighborhood or improve their own quality of life, the city imposes the 50% rule against the property. “Raze or Repair Only” is the threatening battle cry.

Of course it pays to be City Hall, as the city exempts itself from punitive damages of ordinances you and I must closely follow. Had they not, who knows how many more people who didn’t follow their consciences would fill the Rock County Jail? But who needs a conscience when you have authoritarian immunity?

The point here of course is not to raze these historic buildings in Janesville’s Fourth Ward or anywhere else in the city, but to demonstrate the terribly unfair nature of the 50% property value improvement rule. It doesn’t make sense, it stifles re-investment, is anti-renewal, anti-growth and anti-everything. It needs to be repealed.

Read previous opinion regarding 50% rule here.