Thursday, February 19, 2009

Louisville's revolutionary conclusion: "Vacant buildings cost taxpayers by reducing the value of properties nearby."

The following article from the Courier-Journal has been making the rounds by e-mail. Those members of ROCK who embrace the concept of "property values" in the argument against free speech might glance at a few of the statistics below.

Meanwhile, have you ever wondered why matters like this elude the platforms of local political parties?

That's easy. They fear platforms the way that vampires fear daylight.

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Louisville targets owners of blighted buildings; Owners may be hit with triple tax bills, by Dan Klepal

The Louisville Metro Department of Housing referred 2,400 dilapidated homes and vacant lots in Jefferson County to the property valuation administrator's

office -- starting a process that could result in owners having to pay triple their normal property tax bills.

The referrals were made under a law intended to make it more expensive for people to neglect derelict buildings or unkempt lawns.

PVA officials say the reason for the law is simple: Vacant buildings cost taxpayers by reducing the value of properties nearby. They also cause more fire runs, according to a study by the nonprofit National Vacant Properties Campaign.

Under department rules, a building or property is considered blighted if it's been unoccupied at least one year, is unsanitary, not properly boarded, vermin-infested, unfit for human habitation or been tax-delinquent three years.

"It's a good program because it really helps neighborhoods, and the city's tax roll," said Tony Lindauer, Jefferson County property valuation administrator. "This gives the owners the incentive to get off the stick."

The department referred about the same number of properties in 2007. But Lindauer suspended the program last year because he did not think there was enough research on the properties to ensure they met the blight definition. There also was no appeals process for people whose property was wrongly cited, he said.

This year Louisville Metro Housing Director Bob French said the city is checking water and electric records for each building referral to ensure they've been unoccupied for a year. He also established an appeal process, which the city's Vacant Property Review Commission will handle.

"This program means it is not inexpensive for (owners) to do nothing with their properties," he said.

Property owners will get letters stating their properties are blighted, and their tax bills will be tripled. The letters go out March 1; the appeal deadline is May 31.

French said blighted buildings have a dramatic impact on their surroundings. Consider the findings of the National Vacant Properties Campaign, which used government grants to study the cost of vacant buildings and lots:

• Houses within 150 feet of a vacant or abandoned property experienced an average net loss of $7,627 in value.

• Blocks with unsecured buildings had 3.2 times as many calls to police, 1.8 times as many thefts and twice the number of reported violent crimes as blocks with no vacant buildings.

• More than 12,000 fires erupt in vacant buildings each year, resulting in $73 million in property damage.


French said property owners who get letters can also call the department if they think their properties were cited in error.

The list of properties is still in draft form -- and French would not release it. However, he did review the list and reported that none of the targeted properties are owned by Louisville metro government.

"Blight affects the property of the guy next door," he said. "For the owners of these properties, this should get their attention."

7 comments:

Highwayman said...

Here is yet another tool that could be "cut to fit" and used to help alleviate our situation in New Albany.

Here is yet another excuse for inaction eliminated.

Yet within the last two days, those responsible have been told (again) about specific abandoned, boarded up houses that are illegally occupied and the response both times has been a shrug of the shoulders accompanied by "Have you got any documentation??"

So much for "Call and we will come!"

Satirist said...

We all can think of local political obstacles to getting something like this in New Albany.

Are there any Indiana state statutory/constitutional obstacles? Or is this just a program the common council could implement?

Christopher D said...

If we had such a ruckus from people demanding change in the annual taxes for their homes, saying it was not fair that those with huge, expensive homes had to pay more than those in 700 sq foot shotguns, imagine the uproar that would be created here by implementing something like this.
HellsBells, they still havent stopped screaming about the possiblity of having to register rental properties with a local contact name!

Highwayman said...

I hate when this happens.

Everytime I find what looks to be a solution already in place, it inevitibly turns into another extensive research project.

So to answer your question Satirist, in response emails I've gotten thus far from city officials, apparently the groundwork for such has yet to be confirmed at the state (read Indianapolis) level.

So now I'm gonna have to work backwards, find out how Louisville got to this point, & then see what Indiana Codes apply (or not)!

Shouldn't we be on a payroll somewhere??

Ooops! I forgot---I don't have a sheepskin!

dan chandler said...

It’s not just Louisville stepping up enforcement efforts.

http://www.indy.gov/eGov/Mayor/PR/2009/Documents/PR%20-%202%2011%2009%20MAYOR%20BALLARD%20CREATES%20OFFICE%20OF%20CODE%20ENFORCEMENT.pdf

I review real estate titles for a living. On Jefferson Co. titles, I frequently see small liens for code violations. Metro Louisville’s Department of Inspections, Permits and Licenses regularly places small liens on properties for code violations, liens usually between $133-$500. West End Louisville landlords are very familiar with the standard IPL $133 lien. For more information, visit:

http://www.louisvilleky.gov/ipl/PropertyMaintenance/default.htm

Though I’ve examined thousands of New Albany real estate titles, I’ve never seen a similar lien filed here. In fact, I only recall seeing one lien filed by the city, a $13,000+ lien for demolition of a slum property which turned out not to be a lien at all. The city worked out some sort of payment plan with the landlord who didn’t want a lien placed on his properties. The letter referencing the $13,000 bill was just filed in the real estate records as a mistake. I was able to obtain a clarifying letter from the city in a matter of minutes so my title company closed the transaction without paying the city.

Real liens have deterrent effect without spending much city time suing people. Title companies who insure the next owner’s deed or next lender’s mortgage will require that these liens be paid at closing.

I’m no expert on the issues that may be involved in tripling the property taxes of non compliant properties. However, I don’t know of any prohibition against the city filing liens for code violations. You don’t even need a registration system.

Other cities are serious. Earlier this week I worked on the closing of 4-plex in Chicago. The Landlord didn’t pay the heat bill after the foreclosure. The city picked up the tab so the tenants wouldn’t freeze while the property worked through the foreclosure process. As a thank you, the city places a $14,000 lien on the property for the gas bill and their other costs. The selling bank didn’t complain because they knew this was a price of doing business. Five figure liens are not uncommon in major cities.

dan chandler said...

Ideally, the city code enforcement officer would have authority to file a lien for a flagrant violation. Ideally, the money eventually collected from these liens would go into some sort of community development and/or code enforcement fund. I don’t know if there’s any legal obstacle to either of the above.

G Coyle said...

At the risk of offending sensitive individuals, I'd like to point out, again, what I believe is the only impediment to progress, well, a major one - there is no political infrastructure capable of understanding, nor carrying out a modern top to bottom restructuring of the way city services are delivered here. vital city services like code enforcement, sanitation services, public safety, and financial transparency. There are deeply entrenched "parasitic" economic relationships that are self-perpetuating here, city government is a part of that culture. Without a change of "culture", how does any progress happen?