A postmortem on a vacant homeby Laura Yuen, Minnesota Public Radio
As the foreclosure crisis continues, the number of vacant houses is multiplying. About 1,800 properties are on St. Paul's vacant building list, and officials expect hundreds more this year. Many of the houses have been repossessed by the banks or deemed uninhabitable by the city.
St. Paul, Minn. — Vincent Peterson thought he was closing in on a dream when he bought three side-by-side houses in historic Dayton's Bluff.
He imagined renting out two of the vintage buildings and living in the middle one, forming his own little community at 6th and Hope streets.
Wearing a black western hat and a bolero tie, Peterson calls himself a Minnesota cowboy.
The trio of St. Paul homes won his heart the same way wide open spaces lure a rancher -- with a sense of pride and purpose.
"I loved owning the corner of 6th Street, you know?" Peterson said. "And the house has several historic factors. The pocket doors and the molding around the doorways are original."
His voice cracks with emotion when he thinks of how his dream has ended.
"I'm just going to try and hold onto the property I have left," he said, his eyes watering.
Peterson said he'll likely lose this house to foreclosure.
Trying to find out what went wrong involves sorting through conflicting stories from the seller, buyer and the city. There's plenty of blame to go around.
The way Peterson tells it, he knew the main house was a fixer-upper when he bought it for $220,000 in 2006. That was nearly five times what it sold for nine years before.
He said what he didn't know was that the city had declared the bedraggled Queen Anne uninhabitable a year before he bought it.
The property is a Class 2 vacant building. That means no one is allowed to live there until the owner completes the needed repairs. The city issued Peterson a list of work orders spanning three pages.
Peterson put thousands of dollars into renovating it, but it started to drain his savings. He fell behind on his mortgage payments on the house next door. Now he's just cutting his losses.
"I'm out," Peterson said. "I don't have any more money to throw at it."
City officials say they occasionally hear from buyers who claim they didn't know their house was declared uninhabitable.
The St. Paul City Council is considering a proposal that would require the owners to bring vacant houses up to code before they're sold, or to require buyers to show they have the cash to make the necessary renovations.
St. Paul relies on the honesty of sellers or their real estate agents. By law, they must disclose any problems with the properties through what's known as a truth-in-sale-of-housing report.
It indicates, among other things, whether a house is on the vacant list. The city also posts bright placards on the front doors of vacant buildings.
Peterson said the seller of the house, Michael Simon of New Brighton, never told him about the building's status. Peterson says a title check of the property came up clear.
But Simon, an investor at the time, maintains he had no idea the house was deemed unlivable. Still, he said Vincent Peterson should have done his due diligence on what was clearly a house in need of work.
"How the hell can you not know? How?" Simon asked. "If he's buying it to simply rent it out, there's a certain level of detachment. But you're going to live in it, you're going to fix it up," said Simon.
"Hell, you have to know what you're going to be fixing up in the first place," Simon continued. "You're going to call it home. You're going to have friends over, you're going to throw Christmas and New Year's parties. You're going to have sisters and brothers and nieces and nephews over. How the hell do you not know that?"
Another confusing part of the story is that a third owner apparently had control of the house when the city declared it vacant. Mike Simon said a woman from White Bear Lake was under contract for deed to purchase the house from him.
Records show the woman had a truth-in-sale-of-housing inspection done just two months before Peterson closed on the house. The first page of the report notes that it's a registered vacant building.
But when she fell behind on her payments, Simon said, he cancelled her contract for deed and sold the house to Peterson. The woman, Jean Johnson, did not return phone calls seeking comment on this story.
Regardless of who's to blame, one thing is clear: Vincent Peterson and his wife continued to live in the house after the city sent him several notices saying no one could occupy it.
Peterson said a city contractor shuttered his house in March while his wife was still inside.
"He comes with these long screws and screwed diagonally into the door, cracking the wood of the door, and locks her in there," Peterson said.
Rich Singerhouse, a supervisor in the city's vacant housing program, said he was willing to give Peterson the time he needed to make the repairs, so long as no one was living in the house. But one day, he knocked on Peterson's door and caught Peterson in a lie.
"Somebody was there, and literally looked at me through the window and shut the lights off and sat there," Singerhouse said. "That was it, that was the last straw. Now I know they're trying to get away with it, they're not working on it, so now I'm going to deal with it the way I deal with it. One of the tools I have is to board up the house."
Workers boarded up Peterson's house in March.
Peterson said he ultimately blames the city for holding his 19th-century house to an unreasonable standard.
His neighbors say they appreciate that Peterson seemed to care for his buildings and the entire block.
But Singerhouse said the city has building safety standards for a reason.
"A lot of people will say, 'This is livable to me.' Habitable to you, but if something goes wrong, or if there's a fire, or something goes wrong down the block, who's liable for that?" Singerhouse said.
He also suspects Peterson shared the house with renters, which means Peterson was allegedly violating yet another city rule -- operating a rental home without a certificate of occupancy.
City officials recommend that in cases like these, the buyer go after the seller in court.
Vincent Peterson said he just may do that.
- Morning Edition, 05/05/2008, 7:50 a.m.