Lawsuit: Eminent Domain In Disguise: Southern Indiana Municipality Uses Crippling Fines From Home Inspection Racket To Drive Landlords, Homeowners, Tenants In Aging Low Income Neighborhood Out Of Town; Alleged Coordinated Effort With Developer Paves Way For Land Grab At Cheap Prices For Redevelopment
- Casey Lozier lives in pain.
He can’t count the number of surgeries he’s had on one hand. His back, his neck, both knees. In a tank top on a warm March day, a long scar that runs up his arm is visible.
Lozier, 48, used to be a roofer, before he fell off a roof while working. His first spate of injuries came when he slipped in grease on the floor of McDonald’s during his shift. That was in 1999.
His doctor recently found five nodules in his lung, so now he needs a biopsy.
Lozier lights a cigarette, saying he knows he shouldn’t be smoking, but it’s hard to quit the habit he’s had for 33 years. Plus, it calms him down. He has a lot on his mind these days.
“I’m dealing with all that, and I’m dealing with all this and everything, trying to find a place,” he said. “It’s a very big strain on my health.”
Like many other renters in Charlestown’s Pleasant Ridge neighborhood, Lozier has only one week left to find a new place to live. That’s what his landlord told him, at the beginning of March.
Josh Craven, Pleasant Ridge Neighborhood Association president, estimated Lozier is one of 50 or so individuals or families with March 31 deadlines to get out.
The exodus is the first wave of mostly low-income residents who are scrambling to find a place to stay. It’s the culmination of several looming years of talks to redevelop Pleasant Ridge, an older neighborhood with some deteriorating homes.
“I lay up in bed at night or sometimes cry myself to sleep because I don’t know what to do,” Lozier said. “I’m not in control. That’s a big issue for me. I want to be in control. But this situation, I’m not in control. I’m a renter. I have no say-so.”
CITY’S RENTAL INSPECTION PROGRAM
Neace Ventures LLC, the private development firm enforcing eviction, has bought more than 150 properties in the neighborhood, with a goal to eventually own them all. The plan is to demolish the homes to make way for a new subdivision similar in design to Louisville’s Norton Commons.
Lozier’s landlord said he stopped collecting rent in March from his tenants to give them financial leeway in relocation, even though he doesn’t own the properties anymore.
Although Neace Ventures isn’t contracted by the city of Charlestown, many say the city is behind redevelopment. An at-risk rental inspections program, approved by the Charlestown City Council in February 2016, has levied hefty fines against property owners, who in turn have sold their properties to Neace for $10,000.
The landlord, who wished to remain anonymous, said he was billed with $163,000 in city fines. “They went away once I sold,” he said.(1)
This landlord said he wouldn’t buy back his properties for $10,000, if given the chance. Properties aren’t valued much, in part because of their location, he said. Fixing them up would be a money pit.
“There’s a lot of people up there that don’t have no place to go,” the landlord said. “ ... It’s very, very unfortunate. I think that it could have been handled a lot different.”
A libertarian law firm, the Institute for Justice,(2) has sued the city on behalf of the Pleasant Ridge Neighborhood Association for its rental inspection program, which the Institute claims violates Constitutional rights.(3)
For story updates, see:
- Pleasant Ridge renters facing eviction allowed to stay another month,
- Charlestown City Councilwoman testifies to Congress on eminent domain abuse bill.
- [W]hile homeowners try to address each violation, the fines continue to accumulate and the city finds new violations to compound the penalties. Faced with crippling fines, the homeowners find themselves confronted with an offer they cannot afford to refuse. Neace Ventures steps in and offers to buy the property for $10,000. Neace does not have to worry about the fines or repair orders because the city has agreed not to enforce the law against the developer.
The inspections regime has been a windfall for Neace Ventures. Not only has it compelled more than 150 property owners to sell—it has also forced them to sell at a considerable loss. The tax assessed value of the homes is between $25,000 and $35,000, and their fair market value was much higher before the city destroyed the market by vowing to demolish every property. The net savings for Neace, so far, is near $2 million.
Mayor Hall’s alternative eminent domain scheme is illegal and unconstitutional under local and state statutes, as well as the Indiana and U.S. constitutions. The Institute for Justice has teamed up with Pleasant Ridge residents, who just want to keep their homes, to file a preliminary injunction asking the court to put an end to the mayor’s mission to destroy their community.
(3) Ibid. footnote 1 inverse condemnation