Refinancing an illegally zone duplex

[Stefan D.]

Does anyone have experience refinancing an illegally zoned duplex? It's zoned single family, but set up as a duplex. It's within the City of Pittsburgh, which seems to be fairly lax about zoning (according to my PM). I haven't made the purchase yet, just want to make sure I'd be able to refinance for a BRRRR.

[Jim K.]

@Jonathan R McLaughlin

This is a classic 'Burgh thing, Jonathan. Certain areas of this town, especially in the near suburbs have a number of old, stately homes. When things began to go south here and the steelmills started to close, the first people to leave were those with the money to own these places. So the old homes were sold to canny investor types who quickly converted them into duplexes and filled them with black folks eager to get out off the Hill and white Appalachia hill folk from the surrounding areas looking to move into the Pittsburgh metro area.

As the municipalities began to catch on to the fact that any sort of old home undergoing a conversion to multifamily was bad news for the area, they passed ordinances forbidding the conversion of single-family to multifamily. But...if a conversion had already happened by the date of the ordinance, it was grandfathered in. Understand that there are 130 self-governing municipalities in Allegheny County. If you're in Munhall Borough, the date of the ordinance was 1993 (I believe). Swissvale's is probably significantly older. Many conversions still happened after a local ordinance was passed on the QT. So when you buy a place these days, especially when you buy it from an owner who's owned it for a long time, you have to check to see if they have documentation on record showing that the single-family was converted to multifamily BEFORE the date of whatever local ordinance is in place. If they don't, sometimes, local code enforcement will come in, check the conversion, and be able to determine when it happened from the building materials used. In more standoffish boroughs and townships, nobody checks, the authorities just deny it out of hand. Unless, of course, you have pull in the borough...

This area is a frankly a mess in terms of residential construction, Jonathan. A big corrupt mess, with a lot of good buildings surrounded by a lot of really questionable ones, a lot of shady stuff going on.