New Local Laws Allow Towns to Fight Foreclosure Blight
Calculated Risk has an excellent roundup today of local efforts to fight vacancies and blight caused by banks that abandon their foreclosed homes. Cities and neighborhoods increasingly are using local ordinance laws to require lenders to register their vacant properties and to keep them from falling into disrepair. California has led with way with anti-blight laws that allow towns to charge fines of up to $1,000 a day. Other towns are considering using the threat of criminal prosecution to force banks to maintain their homes.
From The San Francisco Chronicle:
John Russo, Oakland city attorney, said the city is gearing up to use California’s new foreclosure-blight law to force lenders to maintain their properties.
The $1,000-a-day fine “is a powerful tool for some tough and fair negotiations with banks,” he said. “The most important thing is to have banks understand that it’s not OK to treat foreclosed properties just like numbers on their ledgers; these are actual homes in the fabric of our neighborhoods. If banks have several properties on a block that they’re holding, waiting for the market to turn, maybe they need to hire security guards. That is their responsibility; it is their property.”
In Boston, city officials aggressively are going after banks, The Boston Herald reports:[
ity inspectors have slapped thousands of dollars in liens on 43 vacant or foreclosed properties blighting Hub neighborhoods to halt the national housing crisis from spreading more urban decay.
Among those being targeted are big banks, including Deutsche Bank and Wells Fargo, who have ignored their responsibility to maintain the seized homes. The liens, totaling more than $67,000, reflect the cost to the Inspectional Services Department for boarding and securing the vacant properties, according to the agency.
“Pay up or we’re going to take your property,” said Mayor Thomas M. Menino, who is fed up with big banks that continue to let their foreclosed properties languish and drive down Hub property values.
As Mike points out today, Sen. Richard Durbin (D-Ill.) complained last week that banks have so much sway on Capitol Hill that they “frankly own the place.” That same attitude seems to hold true in neighborhoods scarred by bank-owned foreclosures. But with new anti-blight laws, it looks like those neighborhoods are beginning to fight back.