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TRIBUNE ILLUSTRATIONPortland is home to 430 abandoned residences — most with large city liens placed on them. Those properties could provide much-needed low-income housing, but the city has not foreclosed on a vacant home since 1965.

There are solutions to the problem of abandoned homes, experts say. And there are cities that have, of necessity, drafted regulations and developed policies to deal with them.

“The good news is the problem is solvable,” says Joe Schilling, a researcher with the Washington, D.C.-based Urban Institute. “Part of the challenge sometimes is you have to get all the right people in the room together and develop a plan.”

But that’s not easy in Portland, where different governmental agencies are under the purview of different city commissioners and there are ordinances preventing representatives from each of the agencies from easily working together.

TRIBUNE PHOTO: ADAM WICKHAM - Portland police regularly check up on abandoned homes such as this one in Southeast Portland, but in some cities, vacant homes are viewed as potential sites for low-income housing Abandoned homes at the very least involve police, who often get notified about the homes through neighborhood complaints and who do initial investigations in order to determine who owns the homes. The Bureau of Development Services (BDS) inspects homes for property violations and often is the only other agency aware of an abandonment. The city auditor has a foreclosure manager in charge of working out payments from homeowners who are delinquent in paying liens. Housing officials have a stake in what happens to foreclosed properties. Developers, nonprofit and for profit, are interested in taking foreclosed properties and potentially turning them into low-income housing. County officials are in charge of actions against owners of homes with unpaid property taxes.

Separate from all that there is Mayor Charlie Hales, who wants to prioritize the problem of abandoned homes — and whose staff was not allowed to participate in a meeting of the city foreclosure committee two weeks ago.

Maybe trying to get all the players in one room together is too much to ask, says Matt Grumm, policy adviser for City Commissioner Dan Saltzman, who oversees the BDS. BDS enforces city code by making home inspections and levying fines that become liens on neglected houses.

Sarah Landis of the city auditor’s office, which oversees lien collection and foreclosures, says a city czar overseeing abandoned homes might be the answer. Hales and Saltzman agree on that point.

That czar could be a BDS employee, Grumm says. He or she could make sure that all of the actors in the zombie home drama play only the roles assigned to them.

The auditor could continue to work with homeowners who have a possibility of preventing foreclosure — precisely what that office has been doing for years, Grumm says. The czar would take on those abandoned homes which meet a standard the city would set for foreclosure.

Perhaps, Grumm says, rules would be adopted to put a house on the BDS foreclosure list after two years of abandonment, or a certain number of times the city has boarded up the house only to come back and find it needs boarding again. Or maybe there would be a threshold of a minimum number of police calls to a vacant house that kicks that property onto the list for foreclosure. Some of those criteria are already in city code.

The city treasurer currently is tasked with disposing of foreclosed properties, so the proposed czar could reside in that officer rather than BDS, Grumm says. What’s clear, he says, is that continuing to house the foreclosure manager in the city auditor’s office won’t work because the auditor isn’t interested in foreclosing.

In Grumm’s view, every time the auditor’s office seeks to reduce the liens on an abandoned house it reduces the city’s leverage to foreclose on that property. The auditor’s generosity works for homeowners who truly want to stay in their homes and need a little help, but also is greatly responsible for the hundreds of zombie homes that are infuriating neighbors and vexing police, Grumm says.

“We have to create a way to unplug this system,” Grumm says. “We’ve never had an auditor who had the will to bring a foreclosure to (city) council.”

Schilling managed a housing code enforcement unit in San Diego which had special investigators assigned to deal with abandoned homes. That included digging through ownership records that could often be concealed in a series of mortgage transactions, skip tracing and financial analysis.

PORTLAND TRIBUNE: ADAM WICKHAM - Cities across the nation are taking a more aggressive stand on abandoned homes. Portland, however, is trying to figure out how to deal with the more than 400 'zombie houses' in the city.

New direction needed

As a first step in getting a handle on abandoned homes, Schilling recommends a Vacant Property Registration Ordinance, which requires owners of abandoned homes to pay a fee of a few hundred dollars and notify the city of their vacant dwelling.

Sometimes, Schilling says, the extra fee is enough to motivate absent homeowners or banks to sell their properties. At the very least, the data in the registry can be mined by city officials looking for trends, and the fees can provide money to finance the foreclosure process.

Portland’s Revenue Bureau proposed a Vacant Property Registration Ordinance for the city in 2012, but no action was ever taken on the suggestion.

Some cities, according to Schilling, have adopted a vacant property tax to put pressure on owners of abandoned homes. But sometimes, he adds, that tax, unpaid, just becomes an additional lien on a house and becomes an additional burden to a nonprofit hoping to purchase the property after foreclosure in order to rehab it or build low-income housing on the lot.

Streamlining the administrative process is key to getting abandoned homes either occupied or demolished, says Dekonti Mends-Cole, director of policy for the Washington, D.C-based Center for Community Progress, which specializes in addressing abandoned properties.

Baltimore’s Vacants To Value program has been a particularly successful model, Mends-Cole says, though Baltimore, with somewhere around 20,000 vacant properties, bears little resemblance to Portland.

Still, in gentrifying neighborhoods the Baltimore program has increased code enforcement and fines against owners of vacant housing and simplified the process for getting an abandoned home into receivership.

The advantage of receivership is that, unlike foreclosure, the city never takes ownership of the property, according to Mends-Cole.

With receivership, the city asks a judge to transfer an abandoned home from its owner to a developer (usually a nonprofit) willing to turn the property into low-income housing. The developer can auction the property to individuals committing to rehabbing the home. Baltimore officials claim that over a four-year period the use of receivership or the threat of it has resulted in 448 properties being rehabbed or cleaned up by owners.

Detroit and Baltimore have even set up relationships with individual judges who regularly hear receivership cases and are familiar with the procedures and the players — including irresponsible owners of multiple properties.

Receivership might be the way to go in Portland, says Grumm, because the city might have more leeway in turning foreclosed properties into low-income housing.

In a hot housing market like Portland, Mends-Cole says, the city has a great opportunity to turn problem homes into community assets, if the political will can be mustered.

“A lot of cities don’t recognize this,” Mends-Cole says. “They see properties that are distressed and think of it as a liability. There shouldn’t be a detachment from affordability and the revitalization of distressed inventory. If you are in a tight market, that land is unusually valuable.”

Next: Portland’s king of abandoned homes

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