A judge has signed an order that permanently prevents officials in Charlestown, Indiana, from using their property maintenance code to levy huge fines against homeowners to coerce them to give their land to a private developer.
The Institute for Justice announced a settlement that was approved by Judge Jason Mount, who signed the order Dec. 17.
The residents of the Pleasant Ridge neighborhood sued the city four years ago over the scheme by city officials.
“As part of the settlement and order, the city has agreed to three things: First, it will give homeowners a reasonable opportunity to fix their homes before the city levies any fines. Second, it will not target the Pleasant Ridge neighborhood with code enforcement more than any other neighborhood in Charlestown. Last, it will not penalize anyone if they demand a warrant before the city performs an inspection of rental property,” IJ said.
The agreement was reached after Mayor Bob Hall lost a re-election bid, and officials gave up on his “effort that imposed millions of dollars in daily accruing fines to force Pleasant Ridge property owners to sell to a private developer for just $10,000 per home.”
At issue were applications of the state’s Unsafe Building Law and the city’s Property Maintenance Code, which the city has been using to push out the owners of existing homes. IJ contended the city had been violating due process and equal protection constitutional rights to favor developer John Neace “over ordinary property owners.”
“Since autumn 2016, Neace has been buying homes in the historic Pleasant Ridge neighborhood as part of a plan with the city to replace all existing homes and residents with fancier homes and wealthier residents. Neace now owns approximately 200 of the 350 properties in the neighborhood. The evidence will establish that the city has used its property maintenance code to fine property owners … to compel sales to Neace,” IJ had charged.
IJ Senior Attorney Anthony Sanders said: “Four years ago, when things seemed darkest for the homeowners, IJ client Ellen Keith vowed that when the fight was over, she and her husband David would still be in their home and she was right. With this settlement and order, the city has agreed to never again use its power to levy fines to force residents out of their homes.”
The organization said the problem developed when Hall “decided that the working-class neighborhood of Pleasant Ridge had to go.”
“That initial plan was thwarted when the city council refused to go along. After a November 2015 election, which Bob Hall won along with a slate of pro-redevelopment council members, the plan to eradicate Pleasant Ridge commenced. Under his direction, the Charlestown Redevelopment Commission came up with a scheme to replace the affordable houses of Pleasant Ridge with a planned ‘village-style’ neighborhood, consisting of upscale housing and retail. The plans intended to replace all of the WWII-era Pleasant Ridge homes—whether owner-occupied or rentals—with new homes that the current residents couldn’t hope to afford. Working behind the scenes with a private developer, the city weaponized its property code and targeted owners for immediate, daily fines for rental properties.”
IJ said the city used $50-per-day fines for violations such as chipped paint, then applied multiple citations per property.
“Within weeks, Pleasant Ridge property owners had racked up millions of dollars in fines. Then the city made an offer that many property owners, faced with crippling fines, could not afford to refuse. If the owners agreed to sell their homes to the private developer for $10,000, the city would waive the fines,” IJ said.
“The plan was as diabolical as it was unconstitutional.”
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