By Tyler Falk
Posting in Cities
The number of vacant properties in U.S. cities is on the rise and they're taking a toll on our cities. Find out what some cities are doing about it.
The number of vacant properties in U.S. cities is on the rise and they're taking a toll on our cities.
A new report from the Government Accountability Office (GAO) found that the number of vacant properties has risen from 7 million in 2000 to 10 million in 2010. American City & County breaks down the financial impact they're having on our cities:
In 2010, government-sponsored enterprises reimbursed servicers or vendors more than $953 million for property maintenance costs, but local governments are bearing a considerable amount of the expense, as well. Detroit alone has spent $20 million since May 2009 to raze 4,000 properties.
To maintain vacant properties, local governments are spending money on boarding them, mowing lawns, draining pools and removing debris. Chicago reported spending nearly $875,000 in 2010 to board up 627 properties. Detroit owns approximately 40,000 vacant lots and 5,000 properties, and spends $25 each time one of them is mowed.
Some cities are placing liens on the properties to cover the costs, but the results have been mixed. In Baltimore they're getting enough money to cover the cost, whereas cities like Detroit hardly recieve enough money to make it worth the time. Cities are also taking advantage of federal money to help cover the costs. But some cities are also using forward thinking strategies to deal with the epidemic.
These cities are using land banking strategies to deal with the problem in a much more strategic way. According to the report, land banks "can help stabilize a neighborhood from further decline by either maintaining homes adequately for future development or demolishing properties as quickly as possible and tapping into other potential uses, such as urban gardens, parks, and other green spaces."
Dec 19, 2011
Give the properties to the homeless and small businessman we have people in tent cities and entrepreneurs who would be thrilled to have these buildings . And why aren't city, state and federal government going after the banks and prior owners over this ? and why aren't people demanding something be done .
on condition that they maintain the buildings. That would be a good move for everyone, poor, homeless, propertyowners and cities alike. It's much better that letting them fall apart anyway.
Not only are there a lot of properties left vacant, a lot of those are being invaded by copper thieves who will rip out walls to get to the copper wiring and plumbing to scrap and recycle.
While 10 mil vacant properties are one statistic, the whole situation has underlying problems. Jobs, pay, and the lack thereof... And, depending on property, the fact that construction companies went ape in building oversized, poor-quality buildings... And, of course, adjustable rate mortgages...
Not to either agree or disagree with the preceding comments, but the answer to the question is that the banks (or finance companies) that made the original loans sold the loans years ago. The loans were then divided into pieces that were then combined into packages of many such pieces - Mortgage Backed Securities - for sale to investors.
Indeed, banks mortgaged properties to people at high-risk of being unable to pay, especially with escalating interest terms. Tossing them out means the banks get zero income from their properties, increased maintenance costs, and more often than not, the state gets to pick up the cost of emergency housing for the evictees. Somehow a contract formula for using the properties they bought so they could live in and care for them at a reduced rate for a defined term would make more sense and humanity. Current practice makes no sense for anybody!
You point a light where needed. Now, get some real interest in grace going so the impact of dis-grace would be enough to get businesses in action or NOT take certain actions... That seems to be a gap we as a people need to cross...
I saw a feature on this last night on 60 Minutes. The banks created the problem, evict the families living in the homes and then abdicate responsibility for maintaining the foreclosed properties they own--leaving the burden on the cities and affected neighborhoods. This is a disgrace.