West End home value program struggling

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An innovative but controversial program that charges mandatory assessments to property owners in 12 western Pittsburgh neighborhoods is limping along, facing an uncertain future.

The West End Home Assurance Value Program, called WE-HAV and modeled after a successful insurance program in southwest Chicago that was created to protect property values in declining neighborhoods, had to lay off its only paid employee, executive director Patricia Torrey, on Dec. 31, less than a year after she was hired, because of budget problems.

Almost half of the property owners in the 12 affected neighborhoods failed to pay last year's first-ever mandatory $20 annual assessment fee, said Michael Roos, chairman of the WE-HAV citizens board.

The assessment fee is supposed to be levied annually in Chartiers City, Crafton Heights, East Carnegie, Elliott, Esplen, Fairywood, Oakwood, Ridgemont, Sheraden, West End, Westwood and Windgap.

Some residents are not paying until they see what happens with a pending lawsuit and a petition drive, both of which are seeking to terminate the program.

The new $20 fee rankles residents of the western communities who feel they are paying more than other city residents but still are forgotten, especially since their police station in the West End was closed because of city budget cuts.

Liens could be placed on properties whose owners failed to pay, but that's not in the WE-HAV board's plans, said Roos.

He's a 30-year-old electrical engineer who got involved with WE-HAV because he wanted to fix up his house in Elliott but was afraid that he wouldn't recoup his investment because some houses were selling for less than their appraised value.

Roos said homeowners who failed to pay last year's assessment will see that fee, plus a $2 late fee, tacked onto this year's bill, taking it to $42.

Paul Sentner, of Elliott, hasn't paid the fee.

"I know a lot of people who haven't paid it," said Sentner, who is leading a petition drive to abolish the program and claims to have signatures from 40 percent of the affected population. That's enough to ask City Council to kill the program, but Sentner said his group plans to gather more signatures so there is no question that it meets the letter of the law.

"We have reached 40 percent, which is the minimum, but we want to go in with 60 percent," Sentner said.

"Just like WE-HAV, we keep plugging away," said Bill Parks, of Elliott, another opponent.

Roos said everyone is waiting to see what will happen.

"We are aware that people are working hard to try to rescind the program," he said. "If they get 40 percent to do that, then that is the community speaking out. If that happens, I just wasted two years of my life."

It's a sad state of affairs for WE-HAV, a program that was touted as an innovative way to protect the financial investments of homeowners who fix up their homes in marginal areas.

City Councilman Alan Hertzberg, who introduced the program and promoted it as a way to preserve declining neighborhoods from absentee landlords and flight to the suburbs, gets plenty of criticism from WE-HAV opponents, especially for putting it into place without a voter referendum. He defended the program and other improvements in his district.

"To my knowledge, they have a good chunk of people who signed on. They have issued certificates and done approvals," Hertzberg said last week of the program.

The program is supposed to work like this: Participating property owners pay about $125 each to get their properties appraised. They agree to live in the houses and keep them fixed up. If after five years, they sell their houses for less than the appraised values, the WE-HAV program will pay the differences from the insurance pool.

For example, if a house that is assessed at $65,000 now sells for $55,000 within five years, the insurance fund will pay the homeowner $10,000.

Money for that fund comes from the $20 annual assessments.

But last year, WE-HAV's first year of billing, about $80,000 was collected from 55 percent of the residents, Roos said. The program had anticipated at least $144,000.

Roos said between 38 and 41 homeowners have paid their $125 appraisal fee to insure their properties and received certificates guaranteeing their investments.

"I have a stack of cards from about 100 people who want to get their homes appraised," said Roos, who is trying to serve as both board president and program administrator.

"It is a much bigger job than I thought it would be," he said.

He said WE-HAV's budget problems began when it was determined that the program was only eligible for about 75 percent of a $150,000 startup grant from the city through a federal Community Development Block Grant, because some neighborhoods didn't qualify for those monies.

Because of that snafu, WE-HAV had to lay off Torrey.

Roos said there's still $60,000 to $70,000 of that money available for operating budget, but the board needs to find new grant money before it can hire another full-time employee.

"We are not using the guarantee fund to pay for a salary," said Roos. He added that the board continues to process applications of interested homeowners and is looking for new money so it can develop other programs to help the affected communities.

Roos admitted that it is unclear what would happen to participants' guarantees if the WE-HAV program is terminated.

He also acknowledged that the WE-HAV board's monthly meetings are not public, even though they are working with money paid by residents.

"It is my hope and some board members' hope that we can have more public meetings to keep people informed," Roos said.

From the time Hertzberg and other city officials proposed the plan, many residents of the affected communities were angry because the program was instituted without a voter referendum.

Opponents filed a lawsuit in 2002 accusing the city of misusing the state law created for neighborhood improvement districts, which usually build sidewalks and capital improvements, to enact a "speculative insurance program."

That lawsuit still is pending before AlleghenyCounty Common Pleas Judge Robert Horgos.

Sentner said city officials failed to follow the specific requirements of the 2000 Neighborhood Improvement law regarding public hearings and preliminary plans.

And the law itself is criticized because it requires a negative vote from 40 percent of the affected homeowners in order to block WE-HAV or any other program established under the law.

Roos is trying to keep the program afloat while the controversy swirls.

Neither Roos nor other members of the board are paid. He said there already are two vacancies on the nine-member citizens board and only one applicant has applied so far.

"We are looking for board members," said Roos.


Jan Ackerman can be reached at jackerman@post-gazette.com or 412-263-1370.


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