Uninspected rentals a thorny problem for Lansing

Brian McGrain, the city’s director of the Planning and Economic Development, which oversees code compliance operations, acknowledged Monday that his office had “fucked up” on the follow-through with Fady’s uninspected and uncertified properties.”

Toddler’s death points to holes in city’s system 

The young couple and two children had just arrived home when a reporter approached them. The house they rent, they were told, had not been registered and certified as a rental property with the city of Lansing since the most recent registration lapsed last fall.  

“I knew there was something sketchy,” the man said. 

They pay $1,200 a month owner Aibout Fady plus utilities. When they first moved in, they said, they complained to Fady about electrical issues. Fady assured them, they said, that “his guy” would be over “right away” to take care of it.  

It’s been a month and Fady’s “guy” still hasn’t been to the property, they said. The family did confirm the property had smoke detectors.  

They live in one of 11 residential properties in the city listing Fady as the owner. Four do not have rental certificates. All 11 properties have had numerous citations for being unregistered as well as weeds, grass and trash violations. 

Efforts to reach Fady were unsuccessful. 

Brian McGrain, the city’s director of the Planning and Economic Development, which oversees code compliance operations, acknowledged Monday that his office had “fucked up” on the follow-through with Fady’s uninspected and uncertified properties. When each expired, the office should have automatically generated notifications to Fady to pay his inspection fees and get in line for certification. In response to questions, McGrain said those letters were going out Monday.  

This comes after a June 27 fire in another unregistered rental property in south Lansing where a toddler, Damian Shessia, died. The home had no smoke detectors. Fady does not own that property. 

The property, at 204 W. Cavanaugh Road, was identified as an unregistered rental in 2020 when a premise inspector cited it for long grass. The inspector discovered the property was owned by the next-door neighbor. That triggered a failure to register notice in addition to the grass notice.  

McGrain said the owner notified the city that no one was living in the home and he did not intend to rent it. As a result, enforcement on failing to register the property as a rental was stopped.  

The property then was sold in June 2021 to Grand Rapids business Chamberlain Capital LLC. In August 2021, the business was transferred to Evolve Real Estate LLC, of DeWitt. The address for Evolve is a residential property in DeWitt. 

City officials were unaware of the ownership changes because the current property database does not flag them.  

That is just one of a series of obstacles the city faces in a series of significant obstacles in cracking down on rogue, illegal rentals. 

Another is sheer numbers, McGrain estimated there are 5,000 residential properties thought to be illegal, which is nearly 10% of the city’s 53,000 to 55,000 rental properties estimated to be rentals. 

On top of that, the city’s housing is aging, making it more difficult to keep properties up to date with new rental requirements.  

The biggest issue, McGrain said, is finding those illegal rentals.  

“Most of our tips come from neighbors,” he said. “But we also monitor places like Zillow. Our inspectors who are identifying properties with other violations — trash, tall grasses, etc. — are also finding unregistered rental properties.” 

That happens, he said, when the violations are entered into a property database that includes building concerns, rental certifications, property sales information and tax assessing information such as the value of the property. Lansing contracts with BS&A Software, a 35-year-old company that serves some 2,100 municipalities. The city of Lansing has a link to the website on the city assessor’s website as “property look up.” The database can be searched by name of owner, address or the parcel number of the property. 

Another obstacle, McGrain said, is the 11 code inspectors have to spend time in court dealing with recalcitrant property owners who are allegedly not making required improvements to address the health and safety of residents — time away from inspections. 

“That really does cut down on their ability to do their jobs,” McGrain said of such court appearances, which with delays can often hours. In addition to the 11 code compliance officers, the city has four premise inspectors and just closed the job search for a fifth premise inspector funded in the current budget.  

Local landlord Dale Schrader said that the city’s code compliance office and rental certification process has “improved” under the Schor administration. “But there is room to grow,” said Schrader, who owns 20 rental properties, most located in the Walnut neighborhood and Old Town. 

Schrader said the city needs to do a better job of identifying illegal rentals, such as those owned by an LLC or people who own multiple properties. “I think they can do a better job with enforcement on these problem properties,” he said. “That’s my concern — the chronic problem properties.” 

Councilmember Patricia Spitzley, who chairs an ad hoc committee on housing, called the Fady registration failure and the Cavanaugh issue “unacceptable.”   

“We’ve known for years that staffing woes have delayed and complicated our housing inspections,” she said. “City Council can only recommend that the mayor hire more staff for that office, which we have done and will continue to do. But we need to start thinking out of the box on this.” 

The ad hoc report, which is expected in September, will include proposed ordinance changes, new fee structures and a recommendation to increase staffing in the code office. That proposal may even include an apprenticeship program so the city can train the next generation of inspectors.  

Spitzley wants to see the city entering into consent decrees — which are legally binding contracts — with property owners with clear expectations and dates affixed. “That makes a case stronger if we have to go to court.” 

She and McGrain agreed that training and authorizing the city’s parking enforcement team to issue premises violations — such as long grass and trash — is another potential solution. It would put more eyes on the neighborhoods to address property blight, which, in turn, may reveal more unregistered rentals or land contracts that have not been filed with the city assessor’s office.  

“We also have to look at the fees we are charging, and what we can do to use those tools in our toolbox to push for more compliance, more quickly,” Spitzley said.