WINOOSKI -- City Councilors adopted a tight new apartment-inspection ordinance with little fanfare Wednesday evening.

The ordinance ensures that every apartment in the city is inspected at least once every four years. When the city building inspector or fire marshal find problems, follow-up inspections would occur at the discretion of the city until the violation is corrected.

Winooski already inspects apartments, but the inspections are sporadic and leave many city apartments with no oversight. That raises the possibility that some residents are living in unsafe buildings.

Under the ordinance, property owners who rent apartments must register with the city and pay a $50 annual fee for every building that contains a rental unit.

Once every four years, the city will inspect each apartment, making sure the rooms have such items as adequate fire alarms, emergency exits, pest control and enough space for the tenants. The fee for the inspections is $100 per unit.

The roughly one dozen landlords who attended the Wednesday hearing that preceded the ordinance adoption mostly focused on the fees.

"I guess I'm opposed to it, but I understand it," said Ruth Bachinski, who owns a Mansion Street duplex.

She said the ordinance was adopted because a few bad landlords were doing a poor job maintaining their properties. The solution is to inspect all apartments, meaning good landlords must now pay annual fees to keep the bad landlords in line, she said.

City Manager Gerry Myers said the registration is important because contact information would be on file and the city would be able to find an owner or property manager quickly if problems arise. The city sometimes spends hours or even days trying to track down landlords who live out of state, he said.

A few absentee landlords have also been guilty of neglecting apartments, and the ordinance would help solve that problem, Myers said.

The ordinance also protects landlords, Myers added, because property owners can refer to city records if tenants break or dismantle safety devices like fire alarms.

Landlord Adam Norton said after the meeting he supports the ordinance. "Now I know for a fact they're going to inspect everybody and they'll be fair to everybody," he said.
Contact Matt Sutkoski at 660-1846 or msutkosk@bfp.burlingtonfreepress.com ^new ( Display, modify, or delete resource in a separate tab or window.)

Gene Richards was stunned when he received his insurance bill for his rental property. The premium for the next year on two of his buildings were going up fourfold, from $1,100 for a year to $5,400 for each.

"I was just shocked," Richards said. "I said, 'Oh, my Lord!'"

The Burlington landlord has made no claims since he got into the rental business 23 years ago. His properties are in good shape and up to code. The change made no sense to him.

His broker told him the increase was because he rented to students. But that's nothing new. Richards has always rented to students. He has never seen a rate increase like this one.

Richards is not alone,said Stuart Bennett, president of the Vermont Apartment Owners Association. Bennett knows of landlords whose buildings have been dropped by insurance companies because students live in them.

Burlington-based Neville Cos. Inc. had its insurance company simply stop covering mobile home parks, said President John Wilking. Neville Cos., a Burlington real estate management and brokerage company, manages four parks in the state.

When Neville Cos. found a new insurance company, the only one in the country covering mobile home parks, rates doubled or tripled depending on the park, Wilking said.

Premium increases could be bad news for renters, as landlords pass on the higher costs, Bennett said.

"It's like taxes. It's a fixed cost that is not going to go down and those types of things get folded into the operating budget," he said. "They either get folded in quickly or they get folded in slowly. There's no question it will have an impact."

Wilking said raising rents in the current market is tough. Vacancy rates are higher than they have been in years and raising rent means risking more vacancies, Wilking said.

"If I raise the rent enough I know I'm going to have vacancy," he said. "It's going to eat me."

Richards said he would absorb the increases without raising rents. The vacancy rate in Chittenden County hit 2 percent in December, tight by most standards, but the highest vacancy rate in the county in 10 years, according to real estate analysts Allen & Brooks of South Burlington.
Stocks fall, premiums rise


Rates are going up for all types of property and casualty insurance around the country, said Joseph Harrington, communications manager with the American Association of Insurance Services, an Illinois-based non-profit organization that provides technical support to property and casualty insurance companies.

Up until the past few years ago, insurance companies were able to keep rates stable, even taking a loss on policies, because they were making money in the stock market, Harrington said. When the stock market went into a tailspin a few years ago, the insurance companies were forced to raise rates, he said.

Policies that were routinely rewritten no-questions-asked are now being closely scrutinized for risk. Underwriters are asking questions they didn't ask four years ago, like who is living in rental housing, Harrington said.

"We're in the middle of what's referred to as a hard market in the property and casualty markets," said Scott Boardman, president of Hickok & Boardman Inc., an insurance brokerage based in Burlington and Richards' broker.
More claims, higher losses


Homeowners and renters can expect to be affected, too, Boardman said.

In 1999 and 2000 clients started to see rate increases of 25 percent or so, he said. Then the Sept. 11, 2001, terrorist attack on the World Trade Center compounded matters because the insurance claim for that tragedy cost billions. That cost had to be absorbed by insurance companies and reinsurance companies, the companies that insure insurance companies.

On top of the weak stock market, the frequency and severity of property losses have gone up steeply in recent years, according to the National Association of Independent Insurers, based in Des Plaines, Ill.

The number of homes has increased, the value has increased and the average cost of claims has increased. The average cost of a homeowners' claim has risen from $2,733 in 1997 to $4,624 in 2002, a 69 percent increase, according the independent insurers association.

In 2001 bad weather accounted for $10 billion in property damage. And claims for dangerous types of mold in homes, unheard of several years ago, cost insurers more than $1 billion in 2001, five times the cost in 2000, according to NAII.

The bottom line is that there is no way to avoid rate increases, Boardman said.

"It doesn't matter who you're with," he said. "It's a universal problem. You couldn't go to one broker in the town who doesn't have this problem."

Contact Leslie Wright at 660-1841 or lwright@bfp.burlingtonfree- press.com ^new ( Display, modify, or delete resource in a separate tab or window.)

The rambling shingle-sided home at 83 N. Willard St. for years led the life of a battered beauty that bravely sheltered one horde of college renters after another.

Over the years tenants punched the plaster, kicked the wood panel doors and drank copious amounts of beer on tattered couches that were sometimes left behind for the next crew of young and restless renters.

But this spring something unusual happened. When the eight college guys who rented the place moved out at the end of May, they weren't replaced by more of the same.

Instead, a team of tradesmen arrived. Beside them came the new owners of the property, a young married couple who saw beyond the home's scars and fell in love with the surviving arches, hardwood floors, intricate molding and shapely columns.

"We just want to renovate it and bring it back," said Stacy Stone, a property manager who bought the house with his wife, Brooke Stone, a speech therapist.

The Stones -- who moved into 83 N. Willard on Saturday -- are not the only owner-occupants buying and restoring dilapidated student party pads in their Burlington neighborhood.

Just down the street, at 36 N. Willard, June 1 brought big changes. That's when University of Vermont history lecturer Craig Pepin and his wife, Cindy Gerstl-Pepin, an assistant professor at UVM, moved into their home with their two children. Before the family bought it, it had been a student rental.

A block down, real estate agent and landlord Greg Couture, his wife, Andrea, and their two children are moving into a brick-and-shingle Victorian that Couture formerly rented to college students.

Around the corner on Loomis Street and on Brookes Avenue, other conversions from rental to owner-occupied are taking place.

Impact of law

Though the turnover is scattered and the neighborhood remains heavily populated by students, some people are asking if a trend is under way. They are also asking if a Burlington ordinance designed to reduce problems associated with crowded student rentals is driving changes. The measure, enacted almost three years ago, says no more than four unrelated adults can live together in a dwelling unit in many parts of the city.

The ordinance applies to many neighborhoods in the New North End and South End and parts of the Old North End and Hill Section. It does not apply to neighborhoods zoned for relatively high-density housing in the downtown core of Burlington.

The measure was passed after lengthy debate as a potential solution to crowding, wild parties, parking violations and unkempt conditions at rowdy student group rentals.

Since the ordinance took effect in October 2000, 10 to 20 student rentals have been converted to owner-occupied homes, estimated Ray O'Connor, Burlington chief code enforcement officer. Several problem rentals have been sold and fixed up to be rented in much better condition, he added.

That's not all.

"Some of the worst sort of professional landlords have gotten out of the business here in the city," O'Connor said.

He attributes the changes not just to the anticrowding ordinance but to a broader effort to improve neighborhood quality of life. This includes more enforcement of noise violations, trash violations and a major crackdown this spring on cars illegally parked on lawns and other green space, O'Connor said.

"All of this is creating very, very positive momentum," O'Connor said. "We're seeing families moving back into what for many years has been student housing."

Having a mix of long-term residents and students makes for a more stable neighborhood and more stable property tax base than a neighborhood that is 100 percent student renters, he believes.

But as some rentals shift to family homes, property owners are seeking to do the reverse in certain areas of the city. For example, the Burlington Development Review Board is currently considering an application from Lionel Perras to convert a home at 188 S. Champlain St. from single-family use to a seven-room boarding house.

And some people are asking if the ordinance is fair. Stuart Bennett, director of the Vermont Apartment Owners Association, said the ordinance is unpopular with landlords and students. It is, indeed, prompting some landlords to sell, he added.

"Bottom line, it's math," Bennett said. "You buy a cash flow or you generate a cash flow and if all of a sudden somebody says you don't have that anymore ... you're stuck."

Along with displacing people, the measure makes Burlington a less attractive place for investment in multi-family housing, Bennett said.

O'Connor countered that the construction of new rental units in Chittenden County and the planned construction of new units at the University of Vermont offset any housing squeeze.

Rental vacancy

Burlington's rental vacancy rate is the highest it's been in years, and some students report they aren't having trouble finding apartments.

"People think it's going to be a lot harder than it is," said Meg Gilmartin, a UVM student who recently found a five-bedroom house with friends on Loomis Street.

Pepin and the Stones say their purchases have been greeted with enthusiasm by neighboring homeowners. Couture also received a warm reception at a recent Brookes Avenue block party, where many residents were thrilled to learn that his family would be replacing the sometimes noisy students who lived in his house.

Couture actually tried to sell the Willard Street property for several months before deciding to move in.

"I didn't get any offers," he said. "You have college kids living in here who are not taking Martha Stewart classes. It doesn't show very well."

The anticrowding ordinance limited the capacity of the house and in the process reduced Couture's rental income by $800 a month, he estimated. That, coupled with rising insurance rates and property taxes, made the house unprofitable as a rental.

Spaghetti sauce splatters still stain the kitchen doorway and the dining room hutch still has the closet rod that a tenant installed so he could hang clothes there. Couture and a crew of workers are rewiring, replumbing and completely renovating the house, turret and all.

Couture was excited about moving in; but is the anticrowding ordinance a good thing? "That's a good question, and a hard one to answer," he said.

Pepin and his wife moved to Burlington from out of state a year ago and rented a place on Henry Street. They liked the neighborhood and the fact that they could walk downtown and to work. They realized they didn't want to live in a rural or suburban setting.

"Whoever's at home with the kids becomes essentially a taxi driver," Pepin said. "We really didn't want that."

Pepin and his wife tried to buy their rental but the landlord wouldn't sell. They also found themselves priced out of some Hill Section streets where homes sell for more than $300,000. Searching for a deal, they looked at nine student rentals that went on the market last fall and chose 36 N. Willard because it had a roomy back yard, off-street parking and a relatively intact interior. Their purchase price: $240,000.

"The nice thing about this house was that it hadn't been a student house forever," he said. "The floor plan was still untouched."

Right next door to Pepin, at 42 N. Willard, Charles Finnigan Jr. is hoping for a quieter neighborhood. His parents bought number 42 in the early 1940s and raised their 11 children there. Finnigan -- a night-shift worker for the Committee on Temporary Shelter -- still lives there with a brother and his elderly mother.

They've watched the area evolve. The past 15 years has meant lots of noise, rowdy behavior and theft. The Finnigans bring in their plants and porch furniture at night, as well as their American flag.

This past winter a small sign with the Finnigan name was stolen from the front of the house after sitting there for years. This was a real low point, Finnigan said. So although he's happy to see families moving in, and he does see signs of neighborhood revitalization, Finnigan is only cautiously optimistic.

"I think the neighborhood's got a lot more room for improvement," he said.
Contact Molly Walsh at 660-1874 or mwalsh@bfp.burlingtonfree press.com




Rental units

Here is a look at total occupied housing units, owner-occupied units, renter-occupied units and the percentage renter-occupied units are of the total. The information is based on the 2000 Census:
-- VERMONT: 240,634 total occupied units; 169,777 owner-occupied units; 70,857 renter-occupied units; 29.4 percent rental units.
-- CHITTENDEN COUNTY: 56,452 total occupied units; 37,291 owner-occupied units; 19,161 renter-occupied units; 33.9 percent rental units.
-- BURLINGTON: 15,885 total occupied units; 6,596 owner-occupied units; 9,289 renter-occupied units; 58.5 percent rental units.
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Aline Demers figured selling a three-bedroom townhouse in South Burlington's Stonehedge Condominiums would be simple in Chittenden County's sizzling real estate market.

Finding a buyer was the easy part, Demers said. Closing the deal was not. Stonehedge's state stormwater permit had expired, meaning the buyers could not obtain a clear title to the townhouse.

Demers is not the only homeowner who has encountered this problem. About 1,000 stormwater permits for large residential and commercial projects in Vermont have expired. Renewal has been delayed by lawsuits, politics and the low priority permit renewal was given in the 1990s.

Real estate brokers, bankers and title insurance underwriters say the expired stormwater permits add to the hassle of selling a home for a growing number of sellers.

"People trying to sell these properties are finding these expired permits coming across as title defects," said Tom Heney, a manager at Lang Associates Realty. "The worst part about it is there's not a single person in this state that can tell you what to do about it."

The Water Resources Board rejected a state plan in June for cleaning up streams and rivers already polluted by stormwater. The plan called for the state to issue general, watershed-wide permits. Those general permits would have taken the place of individual permit renewals for many developments.

Since the decision, the Department of Environmental Conservation has all but stopped renewing stormwater permits in much of Chittenden County.

Department officials say they are awaiting guidance from lawmakers and regulators before renewing most permits.

Chris D'Elia, president of the Vermont Bankers Association, said the lack of permits hasn't halted real estate transactions, "but it's becoming a little more challenging."

"When a bank lends on a piece of property, it wants to make sure there's a good, clean title, and you can't say you have a clean title when you have an expired permit," he said.

Demers, through her lawyers, agreed to put $500 in an escrow account at the Aug. 29 closing. That money can be used by the buyers of her condo if the Environmental Conservation Department should someday force Stonehedge to pay for improvements in its stormwater discharge system.

"In other words," said Demers, "I said I'd pay for something that might or might not happen."
Why now?


Home sellers began feeling the pinch of expired stormwater permits this summer.

Making sure all permits were in place was a priority for attorneys and insurance underwriters.

A 1997 Vermont Supreme Court ruling in the case of Bianchi vs. Lorenz changed the way titles are researched, requiring lawyers to search for municipal permits. If a permit is missing, the bank can refuse the loan.

The Bianchi ruling did not involve state stormwater permits, but it led title attorneys to explore the status of all permits, say real estate agents and title experts.

Coupled with Bianchi was the stormwater ruling by the Water Resources Board that shined the spotlight on stormwater permits.

Storm runoff from Stonehedge, the site of Demers' townhouse, flows into Potash Brook. The brook is on the state's official list of polluted streams.

"Potash Brook is one of those that we don't know what to do," said Jim Pease, a biologist with the Department of Environmental Conservation. "We're waiting for the Water Resources Board or the Legislature to tell us what to do."

Environmentalists contend that's not accurate, that the state could issue stormwater permits without waiting for further instruction from lawmakers.

Either way, people buying or selling property are caught in the middle.
What can be done?


South Burlington City Manager Charles Hafter said his office has received a number of calls from property sellers unsure of where to turn.

"They've called me and asked how they can get in compliance," Hafter said. "I don't know. It's a state permit issue, and there's no guidance."

More bad news might be ahead for some residential developments. State regulators might require costly improvements to stormwater systems in polluted watersheds before they issue new permits.

Twin Oaks condominiums in South Burlington has put a $100,000 price tag on a needed stormwater upgrade, said Andy Mikell of the Vermont Attorney's Title Corp., which issues insurance on real estate titles.

Knowing that the future could hold expensive construction, real estate attorneys are asking sellers to do as Demers did: put money in an escrow account so property buyers are covered in the future if they must pay for stormwater improvements.

Part of the escrow problem, said Heney, is that attorneys don't know how much money should be set aside. The amount asked for escrow can vary, "plus," said Heney, "there's no end date. Sellers are putting money into this huge pool of escrow that might be in escrow forever."

Demers said if she were younger she would have backed out of the deal. She expects her $500 is gone, but says she'll make sure state leaders know how stormwater problems have affected average Vermonters like herself.

"Nobody seems to be in charge of anything, yet we get put in position of having to pay for it," Demers said. "When the dust settles, I'm making a trip to Montpelier."
Contact Matt Crawford at 651-4852 or mcrawfor@bfp.burlingtonfreepress.com
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Tenant activists at Northgate Apartments in the New North End say they are being evicted for questioning management practices at the publicly subsidized 336-unit apartment complex.

Northgate managers deny that the evictions are retaliatory. They say the two activists refused to sign a federally mandated lease amendment that the other 334 households at Northgate did sign.

The large, mixed-income complex, managed by Boston-based Maloney Properties, sent eviction notices in July to Matt Massie, who has lived at Northgate for 14 years; and Christa White, a 16-year resident, shortly after the two were elected to the 19-member Northgate Residents' board at the complex off North Avenue. The board subsequently barred them from taking their seats, saying that because of the eviction notices their election was invalid.

"Two weeks after we were elected, we were called into a special meeting by the ... (residents' board) and told we weren't in good standing and would be removed," White said.

She and Massie are fighting their evictions and their removal from the board in a lawsuit filed in September in Chittenden Superior Court.

Northgate's eviction notices to Massie and Clark charge that they failed to sign their lease and, in Massie's case, "fraudulently" obtained "records dealing with (Northgate)." In their lawsuit, the two say they didn't sign an amendment to the lease because it was inserted without approval by Northgate residents, as required by the resident association bylaws, a charge Northgate denies.

Massie denies he obtained Northgate records by fraud.

The charges and counter-charges at Northgate are not new.

More than a year ago, Massie and White helped found a tenants' rights group, Concerned Residents of Northgate, to counter what White calls "harassing behavior from the management and from the residents association."

They say that as they tried to organize tenants, Northgate employees and board members tore down meeting notices, banned them from using resident association bulletin boards, interfered with their door-to-door leafletting of residents and denied use of community halls at Northgate.

Kathy Miles, longtime Northgate resident association board president and vice president of the Northgate Housing Inc. board, the Northgate board that oversees management, said one incorporation board member did tear down meeting notices but was ordered by the board to stop.

"Residents have a right to organize," Northgate Housing Inc. board President Ted Wimpey said.

Massie and White say Northgate has consistently shown favoritism toward certain residents while cowing others by threatening them with the loss of their housing, and they charge the complex is run by Maloney and a few favored residents rather than by a democratically elected resident board.

"I would say most of the people are frightened of Maloney Property," Massie said. "They tell us that they are afraid to speak out against the management company because of the retaliation they see against their neighbors."

"We're the first and wealthiest resident-controlled housing complex in the country," White said, "and we are the model for all future resident-controlled sites, but we are not being run democratically, and our resident association is not independent of management."

She said Northgate management reacted with hostility after the Concerned Residents group drew more than 100 residents to two resident association board meetings. Those meetings, she said, are "usually lucky to draw five people."

Kathy Luce, a Maloney vice president and company owner, said in a prepared statement that Northgate is "a national model for successful resident ownership.

"The property is not just 'heading toward a goal' of resident control, as stated in (a news release from Massie's attorney)," her statement continued, "it is resident controlled now and has been since the residents obtained majority seats on the NHI (management) board in the 1990s."

Miles, who joined Luce and Wimpey in a meeting with The Burlington Free Press to discuss Northgate, also denied that the resident board or management board is controlled by Maloney Properties.

"I am not dominated," she said.

Wimpey said Massie and White represent only a small fraction of the more than 1,100 Northgate residents.

He provided survey results of residents for the past three years indicating that most of the 94 residents who responded each year are happy with Northgate management and with life at the complex.
Contact John Briggs at 660-1863 or jbriggs@bfp.burlingtonfreepress.com
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