Rebuilding Place in the Urban Space

"A community’s physical form, rather than its land uses, is its most intrinsic and enduring characteristic." [Katz, EPA] This blog focuses on place and placemaking and all that makes it work--historic preservation, urban design, transportation, asset-based community development, arts & cultural development, commercial district revitalization, tourism & destination development, and quality of life advocacy--along with doses of civic engagement and good governance watchdogging.

Wednesday, May 06, 2015

Guess what? Many house flippers do bad work

WAMU-FM/NPR has a multi part series on the pitfalls experienced by purchasers of "flipped houses" where the "renovators" did a lousy job:

- A Dream Home Becomes a Nightmare
- For The Developer From Great Falls, A Great Fall
- As Development Spreads Across D.C.’s Neighborhoods, Can Regulators Keep Up? -- this piece airs tomorrow

This is news?  This is more an "evergreen story."  Crappy renovations are the rule, rather than the exception, in house flipping.

I remember a comment on the Columbia Heights e-list from around 2001 that was very funny.  A person wrote that he was looking to buy a "fixer upper."  Someone replied stating: "just buy a house that is marketed as 'recently renovated.'"

The point was obvious, that the renovation was likely to be incredibly poorly done.

I have to admit I do watch flipping shows on HGTV, DIY Network, and A&E, and I do prefer those people who are more oriented to doing a decent job, as opposed to the alternative.

The "Flip or Flop" people do reasonably decent work, although they don't deal much with houses more than 40 years old.

Of course, Nicole Curtis, in "Rehab Addict," is superb, but she is extranormally motivated. Rudy Martinez, in a show no longer filming on A&E, did pretty good work in Los Angeles. While the jokey-hokey elements of the hosts of "Fixer Upper with Chip and Joanna Gaines" bug me to no end, they do great work fixing up abandoned historic houses in Waco, Texas, etc.

These people, especially Nicole Curtis, the Gaines', and Rudy Martinez help to rebuild neighborhoods in need of special assistance.  (Not unlike the great work done by the Patterson Park Community Development Corporation in Baltimore as well, although that organization went belly up in the current recession.)   From a story on Rudy Martinez:
Martinez had a hunger to make a difference in his community from an early age. Following several years of service in the U.S. Army, he founded City Housing Development, Inc. (CID), intended to transform various properties from eyesores to beautiful, inhabitable structures that would raise the desirability and value of an entire community. Between 2006 and 2012, his efforts resulted in 51 restored homes and the many impressive home makeovers that he has achieved since then. “Flip This House” and “Flip That House,” two hit cable shows, captured his efforts to raise home values and transform the quality of life in several L.A. communities.
Image from the Park View DC blog.

By contrast, many of the small businesspeople focused on this type of work, including renovators in DC, do a terrible job (e.g., "D.C. Officials Order Brand-New Condo Building Torn Down," PostGharai, Civil Action No. 2012-1400 (D.C. 2013)).

There isn't a really good way to stop them.

In Aspen, renovators are required to take an online course and test in order to be certified to work in the historic district, but I don't think that can prevent most of the worst work done in a place like DC.

They are more focused on extracting value from place, rather than contributing to the long term value of individual houses and neighborhoods.

As long as demand for housing is greater than supply, poorly done renovations and what I call "wacked houses," will sell, as long as they aren't done too badly, and the house will appraise at the value necessary to get a mortgage.

Looking at houses in 2008 in Brookland, and in talking with a realtor I worked with on the Brookland Main Street program, I was shocked that she didn't agree with me that the houses her firm touted and that we looked at the weekend before were horrid--poorly renovated with lots of elements that would need to be "fixed."

Instead, she focused on all the people who attended the open houses, and the number of offers that were coming in.  But in a time of hyper demand, people will buy anything, believing that they have no choice, or out of a lack of experience.

The biggest thing I learned, from my previous disastrous experience in buying a house in DC is to walk away from a house that you have reservations about.  But it can be hard to stay the course if you come to believe that it's impossible to find a house that is particularly noteworthy.

OTOH, so many people now want houses to be in perfect condition, and that isn't possible either. We've had to do a lot to our house, and we'll continue to have to fix things, from windows to the roof, as they reach the age of their useful life or to fix previously poorly done "fixes/patches" (like with some windows.

But the basic bones of the house are still firm and the house has plenty of useful life remaining.

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10 Comments:

At 12:53 PM, Anonymous Anonymous said...

"This is news? This is more an "evergreen story." Crappy renovations are the rule, rather than the exception, in house flipping."

Why the negative tone about this story? It's good journalism, even if you don't think it meets the criteria for breaking news.

 
At 1:39 PM, Blogger Mari said...

It is a good story. Is it news? Not new news, but it hopefully makes buyers more aware.
But it doesn't matter. I did a whole campaign against a developer, on-line AND in front of the house (I'm very proud of the little "protest" bird houses I hung in the trees questioning the quality of the house and pointing to my website). The house sold anyway to someone who lost out on other bids. It doesn't matter if the house is $200K or nearly a million, it is such a sellers market that buyers don't look into the permits or the rep of the builder and they hope for the best.

 
At 1:48 PM, Blogger Mari said...

Oh and the bones being good or not is an unknown until you take it to the brick and the studs. Until you gut you don't discover the sandy mortar, the half rotted joists from that time the house was abandoned in 1988 or the beams some plumber in 1937 chopped through to run pipe, and the ginormous hole in the load bearing wall that was only staying up because it was leaning on your neighbor's wall.

 
At 2:33 PM, Anonymous Christopher said...

Never having bought a house, I don't quite know what the process is but I always see these questions of "unknowability" in DC around quality. I remember watching my parents buy and sell houses in Illinois, the required inspections was a big part of the process and those inspectors have to be licensed. Those were separate inspections after the construction and were part of the sale process and were the same for new or old houses. Then during the contract negotiations, the question of who was going to pay for the repairs -- did it come out of the sale price or did they have to be completed before the sale was completed? Don't other states do this too?

 
At 2:55 PM, Blogger Richard Layman said...

Mari -- (1) we don't live in rowhouse, but having lived in one, I know what you mean. (2) our house is "unusual" in that we have a walkout basement and it isn't finished. Same with the attic, it's semi, but not completely finished. With both you see everything.

Christopher -- yes, you have inspectors here, but some are good, some aren't. And as Mari points out, with the strength of the market, people will forego an inspection as a required element of the deal.

w/ our house there were problems, but it was an estate sale and it was sold as is. While they contributed toward closing costs, they were adamant about not paying anything towards anything that needed to be fixed.

I don't remember the amount now, but we had to do between $10k and $15k of basic improvements to make the house livable.

And we keep spending money...

 
At 7:19 PM, Anonymous Christopher said...

Yeah I think that's the thing. You couldn't even transfer the deed in Illinois without the home inspection. There's just no way to get out of it. There's even a separate inspection for radon which is different than the regular home inspection and if there is any radon leakage found, you can't sell the home. Inspection is non-negotiable. When I was in DC, I was surprised when people on various forums would discuss it as if it was something that could be left out of the process. I suppose it's similar to how you can't register a car in DC without an inspection. (Which Illinois doesn't ask for.) Although it doesn't mean that you couldn't buy a house that had faults in it, just that in order to process the sale the inspection needs to happen.

 
At 7:05 AM, Anonymous charlie said...

DC has abolished car safety inspections. VA and MD continue, although the VA one is a bit of joke. DC still has to do EPA certifiction and will refuse to test an obviously unsafe car.

In terms of inspections, my inspector refused to look at any common elements. Don't know if that would apply to party walls in a rowhouse. The inspection was rather useless for $450.








 
At 8:44 AM, Anonymous Anonymous said...

"I do prefer those people who are more oriented to doing a decent job, as opposed to the alternative." Well um, yes, Richard! That's kind of a no brainer. And Nicole Curtis is fantastic, true that. I saw some of her show one time in the dr.'s office and loved it. She's rare. That's why we like such people - they are good and have good values. What I would ask about the wamu story was - where was that couple's inspector? A good one would have found the serious issues. A good buyer would have insisted on a good inspector. I know someone who did, and he saved himself a heap of trouble and money. He tracked the house and eventually saw it was (over) sold by a large amount.

GS

 
At 8:55 AM, Anonymous Anonymous said...

Kojo is featuring the WAMU story today, by the way.

GS

 
At 10:44 AM, Anonymous Richard Layman said...

well, sometimes, it's not until you've been burned through hard experience (like I was with the H St. area house) that you fully understand the value of an inspector.

That inspector was bad. The one for the house we have now was great. Yes, we have/had to do a bunch of things. But basically the house is well put together.

But we were super lucky. The church selling the house wasn't so focused on price, because they were getting totally free money anyway.

And we saw the house before an open house had been scheduled. So the house was only on the market for a couple days before an offer was submitted and the church accepted.

So it didn't go into the maw of the general frenzy back then. (And which can exist still, in the better placed neighborhoods--my neighborhood is great, but is by no means considered "hot.")

 

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