July 25, 2022
By Editor Rachel Scofield
A proposed Pickerington ordinance would create a new tax on individuals and businesses who own rental houses within the city.
If the ordinance passes, then effective January 1, 2023, owners of more than five single-family houses must pay a $250.00 annual registration fee for each rental property. If the owner buys more houses, registration for the new properties would be due within 30 days of purchase. There would be a 3-percent excise tax imposed on these rentals as well based on the gross amount of the lease/rent.
Councilman Brian Wisniewski said that the fees would cover new inspection requirements and other registration expenses.
For single-family homes, “inspections are performed during the building process but after that the city doesn’t do anything,” Wisniewski said.
If the ordinance passes, every time a rental house changes lease agreements, the city will require an inspection.
The proposal states that “the purpose of the inspection is to ensure that each unit is safe, healthy and habitable” and that the homes are compliant with the law. If a property does not pass the inspection, the city will notify the owner of all violations and schedule a re-inspection.
Any property owner who does not register on time will be charged with a fourth-degree misdemeanor for the first property that is a day late, a third-degree misdemeanor for a second property that is a day late, and second-degree misdemeanors for all other late payments.
A property owner will be charged with a misdemeanor every day that the registration for a house is late. (Misdemeanor Penalties).
Pickerington City Manager Greg Butcher said that “although difficult to quantify” the city estimates that there are currently 200 to 300 single-family rental units within the Pickerington limits.
Realtor.com reported that first-time homebuyers are having a difficult time finding available properties due to a combination of limited options, rising prices and increasing mortgage rates. Additionally, rental businesses purchase many houses as soon as they appear on the market.
On April 5, the city council denied a request by Las Vegas-based American Homes 4 Rent to build 117 rental houses on Long Road due to a zoning issue.
Home Inspector Danny Dickerson of Rising Eagle Property Services said that foreign investors are submitting offers on local houses which are $50,000 higher than the asking price.
“They out-bid other buyers. Then, when they’re in contract with the seller, they begin to deduct money from the offer over every little thing they can find wrong, until they’ve talked the seller down to a price less than the original listing. This not only screws a seller that could have taken a better offer, but it can throw off the value of other homes in the area.”
Some real estate professionals also believe that renters do not maintain houses as diligently as homeowners, Dickerson said.
As of June 2022, Pickerington home prices were up 21.2-percent compared to last year, selling for a median price of $400,000, according to Redfin, a company that tracks real estate transactions.
Zillow defines a property as “affordable” if it consumes no more than 30-percent of a household’s income. To purchase the average home in Pickerington, buyers would need a household income of more than $100,000 (mortgagecalculator.org).
The second reading of the proposed ordinance will be held on August 16 with the final reading on September 6. Each meeting will convene at 7:30 pm in the council chambers of Pickerington City Hall, 100 Lockville Road.
The ordinance is available as a pdf. If you wish to speak with a councilmember regarding this or any other legislation, their contact information is available on the council page of the city of Pickerington’s website.
ARTICLE UPDATED TO INCLUDE THE 3-PERCENT EXCISE TAX – 7/25/22.