Tackling the Problem of Abandoned and Vacant Properties

I recently read an article stating that the U.S. home-ownership rate has declined more in the past few years than in the previous two decades.  The article noted that about 67% of Americans own their homes today, compared with 69% in 2004.  It reference some banking industry analysts who expect that by the end of 2010 nearly 21 million U.S. households will owe more on their mortgages than their homes are worth, with perhaps one in five of these homeowners likely to foreclose.

As the national foreclosure rate continues to rise, many municipalities will see an increase in the number of vacant and abandoned properties.  The problems created by vacant residential properties, such as vandalism, unsafe open structures, stagnant swimming pools, just to name a few, create immense expense as communities are tasked with securing and abating these problems without the assistance from property owners or residents.

Many of these properties will be owned by banks that are simply overwhelmed by the volume and are not equipped to maintain them.  In turn, code enforcement departments are struggling with the increased workload and associated costs created by this vicious cycle.

Most importantly, the effect of the resulting blight on these neighborhoods can be hard to quantify.  As discussed in Vacant Properties, The True Cost to Communities, a report by the National Vacant Properties Campaign, decrepit homes will depress home values for entire blocks around them.   Once homes become vacant, the report stated, they will "produce no or little property tax income, but they require plenty of time, attention, and money."  One effective weapon to combat this gradual slide is the code enforcement violation, and a resulting property tax lien if the fine is not paid on time.

In the current economic climate, it makes sense to review these processes to ensure that escalations are happening as quickly as the law will allow.   The resulting fines and liens will offset the escalating costs to inspect these properties, as well as incentivize banks and homeowners to become compliant as quickly as possible

Some municipalities are taking a proactive approach.  In Broward County, Fla., the Abandoned/Vacant Real Property Registration and Certification ordinance was created to protect residential neighborhoods from becoming blighted through the lack of adequate maintenance and security of abandoned and vacant properties.  The program requires mortgage lenders to inspect defaulted properties to confirm that they are occupied.  If a property is found to be vacant, the lender must register the property with the County and immediately begin to secure and maintain the property to program standards.

Technology also has a critical role to play in helping communities quickly and effectively meet these challenges.  For example, Accela Automation’s code enforcement capabilities can be used to track and manage the complete life cycle of a violation, including invoicing and collection of fines, and escalation to a hearing calendar when a fine goes unpaid.  Inspection staff can also access and share information from a centralized database, ensuring faster and more consistent enforcement.  These steps can help stabilize the neighborhoods and prevent them becoming unkempt and unsafe. 

The foreclosure crisis doesn’t appear close to winding down.  Communities must prepare themselves for the difficult impacts of this unprecedented housing downturn, which could continue for years.  Proactive enforcement planning and strategic use of technology can help mitigate the snowball effect that abandoned and vacant housing can have on a community. 

How extensive are these issues in your community?   How are your agencies dealing with the problem?   I’m interested in your views.