Housing buys raise questions

PAT LITOWITZ
plitowitz@ncnewsonline.com

Uncertainty is a cornerstone of the real estate market.

Activities by Affordable Housing of Lawrence County illustrate that point. Created by the Lawrence County Housing Authority, which provided a $200,000 no-interest loan in 2003, the nonprofit organization purchased eight properties this year totaling $340,000.

County property records confirm that much.

However, from the properties' value to who ordered the purchases, the current and former principals involved with Affordable Housing take differing views on strategy and responsibility.

Affordable Housing's initial objective was to build housing for low-income families and/or the handicapped. That course changed on March 8, when the group purchased a house at 1114 Cunningham Ave. in a sheriff's sale for $12,500. The county assessor's office values the property today at $26,700.

That investment is the group's best showing to date. On Dec. 7, seven more homes were purchased. Three of the properties are near or below county and state market values.

The four others were either owned or co-owned by Nick DeRosa and John A. Orlando. Valued by the county at a total of $135,100, houses on Frank, East Wallace, Highland and Florence avenues sold for $214,500.

DeRosa is the assistant superintendent of the New Castle Area School District. Orlando is retired from the Pennsylvania-American Water Co. Attempts to reach both men were unsuccessful.

WHO'S RESPONSIBLE?

Donald "Ducky" Conti, a housing authority board member who also serves on the board of Affordable Housing and is its secretary, said the board agreed to the purchases. However, he said, former board member Robert Evanick was ultimately responsible.

"He's the chairman," Conti said Dec. 18 of Evanick, who is executive director of the county housing authority. "He's the one who signs off on it."

At first, Evanick didn't wish to discuss the inner workings of Affordable Housing.

"I'm out of it now," he said last week, noting he had resigned from Affordable Housing's board. "You'll have to address those questions to Mr. Conti."

When Evanick was asked the same question later, his response changed.

"Mr. Conti arranged for those purchases through the organization."

Although Evanick resigned from the Affordable Housing board, it was not before he co-signed a $250,000 loan with First Commonwealth Bank on Dec. 6. Conti was the other signer on that loan.

Overall, Affordable Housing paid $327,500 for the seven houses, which were Section 8 properties. Officially known as Housing Choice Vouchers, the Section 8 program allows renters to pay for housing through government vouchers.

Grants totaling $77,500 paid what the loan did not cover, Conti said.

THE VALUE

Property value is in the eye of the purchaser, noted Bill Bonner, also an Affordable Housing board member.

An official with First Commonwealth Bank, Bonner has served on the board for a year. He said he refrained from business dealings Affordable Housing had with the bank.

"I've abstained from that transaction because of the bank's involvement and my relationship with the board," he said last week.

To date, Affordable Housing has two mortgages with First Commonwealth Bank. The first one, for $40,000, was signed June 29. The loan involved the Cunningham Avenue property.

Board member Karen DeCarlo, also a New Castle City councilwoman, and Conti signed those loan documents. Calls were made to DeCarlo to ask about the loan and why she was listed as Affordable Housing's director at the time. She could not be reached for comment. Conti said he did not recall that particular loan.

"I believed they just offered to talk to one of our lenders," Bonner said of his bank's involvement with Affordable Housing. "I kind of stepped aside when it came to financing that project."

Real estate values fluctuate. As Bonner explained, what one person may consider a reasonable price, another may balk at.

ASKING PRICE

About 3,000 people questioned their property assessment in 2003 after the county had set new values through a reassessment, but by this year, the number of challenges had returned to normal with approximately 120.

In addition to a countywide reassessment, building improvements or a change in zoned use will create a change in assessed value.

The State Tax Equalization Board offers another method to validate property values. Each year, the board compares county-assessed values to current sales prices and comes up with what is a ratio or common level ratio. For Lawrence County, that number is 0.912.

When a county-assessed property is divided by 0.912, the state's value on a property is created.

For example, Affordable Housing purchased 1806 Highland Ave. for $72,000. The county assessed the property at $49,400 and the state at $54,167.

"All I can tell you is that it's a triplex," Conti said. "I have no clue on how they assess. Apparently it must be OK because the bank had no problem with it."

He then added, "I'm not into that real estate stuff."

APPRAISALS

Castle Realty conducted the appraisals for the seven properties purchased on Dec. 7. Neither Castle Realty nor First Commonwealth Bank would release those figures. Conti said Affordable Housing would review the request for the appraisals.

Conti said Affordable Housing provided no public announcement that it was looking to purchase houses. In addition to Orlando and DeRosa, properties were purchased from Harry L. DeRosa and David L. Defibaugh.

The DeRosas are first cousins, Conti said. County records show that Nick DeRosa and Defibaugh were involved in real estate transactions.

"They wanted to sell," Conti said, adding all the buildings had tenants in them.

Harry L. DeRosa and Defibaugh could not be reached for comment.

Conti said Affordable Housing plans to purchase six more houses.

"They don't belong to Harry DeRosa or Nick DeRosa," he said. "There's other people involved.

"We went to the bank (First Commonwealth) and told them what we want to do. The bank was well aware what our goal is."


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