MuniReg President Michael Halpern contributed an article to American City and County pertaining to best practices for “VPROs” in order maximize its effectiveness.
Municipal leaders should improve property registries to combat property blight
Hundreds of communities across the country have implemented a “vacant property registration ordinance” (VPRO) with intent to proactively receive contact information of the owner or responsible party for vacant and/or abandoned properties in their jurisdiction. This tool advocated for by community development experts has proven to be a great success. While effective, this tool has remained largely unchanged and paper-driven since the first VRPOs were introduced.
The negative effects abandoned properties and “zombie foreclosures” have on a community are well documented. Though the foreclosure crisis is bygone times, the aftereffects are very prominent today. Now that the foreclosure crisis is in fact in the rear-view mirror, perhaps now is exactly the right time to review the processes and make the changes before the next downturn in the housing market.
Municipal leaders are obligated to consider more efficient processes to expedite results for citizens living next door to blighted properties. When a property is identified as abandoned code or building officials are tasked with identifying the owner and responsible party for upkeep. Typically, notice for required upkeep and safety is given to the responsible party per respective jurisdiction policy. However, the initial step of identifying and properly communicating with the owner or responsible party is often not accomplished due to incomplete or inaccurate contact information on file. In those cases, the municipality must complete the required maintenance at their expense. The maintenance costs are then assessed to the property taxes or as a lien, which may or may not be recouped. Is there a faster and more efficient way to go about these steps?
For communities that don’t have a registry – why not? Regardless of community size or perceived lack of need, implementing a registry program is easy and cost-effective with the many resources and programs that can be used as a starting point.
For communities that have a registry – are you maximizing its reach and effect? Let’s take a closer look:
- Ordinance:
- The intent is to capture all abandoned properties. Does yours?
- Does your ordinance only capture “foreclosed” properties?
- Are you expending unnecessarily for proper maintenance by not capturing all vacant properties?
- Are you protected against unnecessary liability?
- Do you have adequate language for exemptions?
- Does your language use the word “default”? Very risky.
- Are you asking the right questions on your form?
- Are you asking too many questions on your form?
- Process:
- Do you have a website for registering properties and collecting payment?
- Is your process still paper driven?
- Do you have appropriate oversight of the registration program?
- Do you have appropriate oversight of collections and fines for non-compliance?
- What resources are available to the staff to “track down” non-compliant parties?
- Do you have quick and reliable reporting on each step of the process?
- Information:
- Are you sharing the information with police and fire departments?
- Are you sharing the information with foreclosure prevention groups?
- Are using the information to predict future challenges?
On January 29, 2019, SFWeekly wrote in an article discussing vacant properties, “Vacant storefronts have gained attention in recent years as local groups survey their own neighborhoods to counter the mere 25 registered by the Department of Building Inspection in 2016 and 40 in 2017. In April, Supervisor Sandra Lee Fewer led a crowdsourced count that spotted 156 vacancies in the Richmond.”
In this district, the registry captured less than one-sixth of the vacant properties!
On September 13, 2019 an op-ed in the Baltimore Sun had this quote, “More than a decade ago, the city enacted its current property registration statute. However, the statute appears never to have been fully enforced. Based on my 15 years of experience in this area, when the community complains about a problem rental property or vacant property, the property usually turns out to be unregistered.”
Resources and assistance are readily available to assist municipalities in implementing an ordinance and minimizing non-compliance of unregistered properties. Utilization of a third-party administrator for the program requires no out of pocket expense to the municipality and has proven to increase compliance in many areas across the nation. Third-party administrators also bring focus and oversight to the program while sharing best practices utilized across the nation.
Leveraging the best practices of successful registration programs and adopting new technology to quickly identify and notify responsible parties will increase registration and comfort displeased constituents in your community. Partnering with experts, will result in greater efficiencies, tremendous cost-savings and a better result for your residents.
Michael Halpern is president and founder of MuniReg. Prior to founding MuniReg, Michael spent the past 17 years at Safeguard Properties, the nation’s largest mortgage field services contractor, working on behalf of their loan servicing (“banks”) clients. Most recently Michael was director of the community initiatives department leading the company’s outreach to municipal and state governments assisting them in addressing “zombie foreclosures.” He can be reached at
[email protected] and 216-407-9296.
Source: American City & County
Following up on Erie County (NY) ZOMBIES Initiative, County Clerk Mickey Kearns unveiled the next phase called “Neighborhood Zombie Watch Program”.
Kearns announced that the new watch program will allow county officials to place signs in front of properties that the WNY Law Center is working on with DFS. Letters to neighbors of each property will also be sent explaining what is being done with the vacant houses.
For additional information please click on the following links:
WGRZ ‘Zombie Watch’: Erie County posts notices on abandoned homes
Clarence Bee “Kearns unveils new watch program to aid fight against ‘zombie properties’”
WBEN (Audio) Kate Lockhart of WNY Law Center on Partnership with Erie County to Combat Zombie Properties
WBEN New initiative introduced to battle zombie properties in WNY
Historically concerns have been raised regarding excessive fees associated with vacant property registries.
A recent report in the Twin Cities Pioneer Press discusses an instance where the $2,000+ fee resulted in additional hardships for a local resident.
To view the article, please click here.
WKSU, Kent State University’s public radio station recently focused on the housing market in Youngstown, OH and a new problem arising a decade after the housing bubble.
The February 25th report focuses on lease-to-own contracts along with traditional land contracts and the pros & cons of increasing regulation.
To view the report, please click on the following link:
10 Years After the Housing Bubble Burst, Hopeful Homeowners Deal with New Threat
To view the study from Harvard Joint Center for Housing Studies referenced in the report, please click on the following link:
Update 12/28
Please see following articles for comprehensive review of the new legislation
National Law Review: SB 1079: Changes to Nonjudicial Foreclosure Process Aim to Benefit Tenants, Primary Residence Occupants and Community Groups; Uncertainty Looms for Lenders and Debtors
Sierra Sun: Law Review: Dramatic change of residential foreclosure laws in California
Update 9/28/20
SB 1079 was signed by the Governor into law.
On February 19th 2020, State Sen. Nancy Skinner (D-Berkeley) introduced Senate Bill 1079 titled, “Residential Property Warehousing”
Please see below for media coverage and for an overview of the requirements that would drastically amend the current policies and procedures regarding abandoned properties and those going through foreclosure.
To view the text of the introduced bill, please click here.
- Would authorize a city, county, or city and county to acquire a residential property within its jurisdiction by eminent domain if the property
- has been vacant for at least 90 days,
- the property is owned by a corporation or a limited liability company in which at least one member is a corporation,
- and the local agency provides just compensation to the owner based on the lowest assessment obtained for the property by the local agency.
- Would require this local agency that obtains residential property pursuant to
- maintain the property
- make the property available at affordable rent to persons and families of low or moderate income or sell it to a community land trust or housing sponsor.
- Would authorize a local agency to adopt an ordinance that imposes a civil penalty in an unspecified amount on an owner of residential property located within its jurisdiction if the residential property
- has been vacant for at least 90 calendar days and
- the property is owned by a corporation or a limited liability company in which at least one member is a corporation.
Funds are to be earmarked for homeless diversion, rental assistance, and other affordable housing purposes.
- Would require a corporation that owns residential property that has been vacant for at least 90 consecutive days to, before offering this property for sale on the open market, offer that property to a “priority entity” (community land trust or housing sponsor)
- This “priority entity” would be required to
- provide a notice of interest within five business days of receiving an offer or of receiving a specified notice
- make an offer for purchase within 90 calendar days.
If the seller determines that the offer is a competitive offer, as defined, the bill would require the seller to accept that offer.
- If the foreclosure court directs the sale of encumbered property it would require the mortgagee to offer that property,
- first, to any tenant or association of tenants currently occupying the property and,
- second, to a “priority entity,” before offering the residential real property for sale on the open market.
- a tenant, association of tenants, or priority entity
- would provide a notice of interest within five business days of receiving an offer or of receiving a specified notice
- make an offer for purchase within 90 calendar days.
If the mortgagee determines that the offer is a competitive offer, as defined, the bill would require the mortgagee to accept that offer
Mortgagee would be required to allow a tenant, association of tenants, or priority entity to make a second offer for purchase.
- a tenant, association of tenants, or priority entity
- Would require the Department of Housing and Community Development to establish a process whereby a city, county, or various housing entities may register with the department to receive related notifications.
As opposed to targeting individual properties and individual owner, the City of Detroit is taking a different, and aggressive approach challenging the overall philosophy of “Invest & Neglect”.
In addition to the three complaints in Wayne County’s 3rd Circuit Court against “several of Detroit’s most notorious speculators and slumlords”, the Mayor and Chief Health Public Office issued a Declaration of Public Nuisance.
To view the Mayor’s press release, please click here.
To view related media posts, please click on the following links.