Abandoned Properties: Facing the Challenge
Judge Raymond L. Pianka
Housing Division, Cleveland Municipal Court
The American Dream has turned into a nightmare for many, as court systems are overwhelmed with foreclosures and bankruptcies. It is a national problem that has hit northeast Ohio particularly hard.
Late night “infomercials”, predatory lending, the cost of health care for the underinsured, no-money-down mortgages, and a weak job market are evidenced in the record number of foreclosure cases. Last year 12,000 foreclosure actions were filed in Cuyahoga County alone. Thousands of boarded-up properties reflect that the value of the properties is not worth the debt they are carrying.
Every day on the Housing Court docket I see owner-occupants and investor owners who find that they are still responsible for the maintenance of the property although they filed bankruptcy or are in foreclosure. During the months or years of the foreclosure or bankruptcy process, a lot can happen to a vacant property. Routinely, properties that are vacant are stripped of plumbing and heating equipment and recyclable materials like aluminum siding, doors, and gutters. Until that property is titled to someone else, the person in possession and control can suffer the penalty of a first degree misdemeanor of $1,000.00 fine and 180 days incarceration for each day the property is out of compliance with the City code.
The crisis is focused on the bulk of Cleveland’s housing stock which consists of 100,000 one- and two-family houses whose median age is 80 years. Owner-occupants abandon their properties, are cited, and are surprised to find out that they cannot simply walk away from the property although they have filed bankruptcy or are in foreclosure. The owners still are responsible for the maintenance of the property, and may be criminally liable for code violations. Investor owners who appear before the court for code violations not only many times lose their properties, but are also subject to severe penalties. Several of these investors are at the Warrensville Workhouse presently, for failing to maintain properties in foreclosure.
Of course, the property owners are not the only individuals affected by vacant, abandoned property; the value of neighboring properties and the quality of life in those neighborhoods is diminished as well. In Philadelphia, a recent study found that the value of other properties on a block are decreased by 15% or about $6,500 for the average property when there is a vacant, boarded-up property on that block. The nuisance not only sends a signal to owners that perhaps they should stop investing in their property, but also causes concern for high-quality, prospective tenants, who feel safer and more ready to rent in an area that is not sending signals of distress.
The crisis in vacant, abandoned and foreclosed property has forged a coalition to address the problem, after a thorough analysis by nationally recognized experts under the sponsorship of Neighborhood Progress, Inc.(www.neighborhoodprogress.org). At long last, the city, its CDCs, intermediaries, foundations, and others may move forward with the help of this study, “Cleveland at the Crossroads; Turning Abandonment into Opportunity.” The recommendations for the prevention, reclamation, and reuse of vacant and abandoned property in Cleveland are based upon best practices in the country and are also applicable to the growing problems in Cleveland suburbs. The assessment team included Alan Mallach, director of Research for the National Housing Institute, Lisa Mueller Levy, Director of Technical Assistance for the National Vacant Properties Campaign and Knowledge Sharing Director for LISC, and Joseph Schilling, Professor in Practice from the Metropolitan Institute at Virginia Tech and Director of Policy and Research for the campaign. For more information about the Campaign visit www.vacantproperties.org.
The study found that “how Cleveland confronts the challenge of vacant properties during the next five years will have a dramatic impact on the future of the city and its neighborhoods. Cleveland stands at the proverbial crossroads that compel immediate action.” Internal factors have hindered the city’s ability to effectively respond to this crisis: the fragmentation of governmental authority and responsibility; the lack of adequate property information systems; the absence of a strong, clear, housing preservation policy; and the need for new property acquisition tools- both legal and financial- to deal with today’s conditions. Still, there is hope.
