DANGEROUS BUILDING DEMOLITION - H.B. 4081 (H-1): COMMITTEE SUMMARY
sans-serif">House Bill 4081 (Substitute H-1 as passed by the House)
Sponsor: Representative Gary Woronchak
House Committee: Regulatory Reform
Senate Committee: Economic Development, Small Business and Regulatory Reform
CONTENT
The bill would amend the Housing Law to include in the definition of “dangerous building” a building damaged by deterioration, neglect, abandonment, or vandalism; create a rebuttable presumption that a building required immediate demolition if the cost of repair would exceed the building’s SEV; and to specify that the cost of demolition would include certain administrative fees and charges.
The Housing Law provides that it is unlawful for an owner or agent to keep or maintain any dwelling that is a dangerous building. A “dangerous building” is a building or structure that has defects or is in a condition described in the Law. Under this definition, a building or structure is considered a dangerous building if a portion of it is damaged by fire, wind, flood, or other cause so that the structural strength or stability of the building or structure is appreciably less than it was before the catastrophe and does not meet the minimum requirements of the Law or a local unit’s building code. The bill would expand this provision to include damage by deterioration, neglect, abandonment, or vandalism.
Under the Law, an owner, agent, or lessee must comply with an order of demolition within 21 days after a hearing, if the local unit’s legislative body or appeals board determines that a building or structure has been substantially destroyed by fire, wind, flood, or other natural disaster, and the cost of repair will be greater than the State equalized valuation (SEV) of the building or structure. Under the bill, this process also would apply to a building or structure that had been substantially destroyed by deterioration, neglect, abandonment, vandalism, or other “cause” (rather than other natural disaster). Further, the bill provides that a rebuttable presumption that a building or structure required immediate demolition would exist, if the estimated cost of repair exceeded the SEV of the building or structure.
The Housing Law provides that the cost of demolition incurred by a local unit to bring a property into conformance with the Law must be reimbursed to the local unit by the owner or party in interest in whose name the property appears. The bill specifies that the cost of demolition would include, but not be limited to, fees paid to hearing officers, costs of title searches or commitments used to determine the parties in interest, recording fees for notices and liens filed with the county register of deeds, demolition and dumping charges, court reporter attendance fees, and costs of collecting the charges authorized under the Law.
MCL 125.539 et al. - Legislative Analyst: George Towne
FISCAL IMPACT
The bill would negligibly increase State and local revenues. To the extent that demolitions increased under the bill, local units would incur more expenses. However, local units also recover demolition expenses, suggesting a net cost of zero for local units. On the other hand, repairing property and/or demolishing dangerous buildings presumably increases the value of the property and/or surrounding property or encourages sales of such property. These secondary effects would potentially provide a minor increase in property tax revenues to local units and the State.
This estimate is preliminary and will be revised as new information becomes available.
- Fiscal Analyst: David ZinS0304\s4081sa
This analysis was prepared by nonpartisan Senate staff for use by the Senate in its deliberations and does not constitute an official statement of legislative intent.