It is no secret or surprise that Memphis has been hit hard by the foreclosure crisis, like many cities across the nation. Foreclosures not only have the immediate effect on families that lose their homes, but most have a lasting effect on neighbors and cumulatively on neighborhoods. A standard foreclosure will stay vacant for a year and a half; during that year it is likely that those properties will become blighted, which brings down neighboring property values, not to mention neighborhood morale. Last year alone, according to CBANA's lending study Memphis saw 12,855 foreclosure notices. This year, the trend is likely peaking and moving east, with Cordova at the epicenter as opposed to Frayser last year (and the year before). What is surprising is how lackadaisical Memphis has been in dealing with the wake of problems left behind by the wave of vacancy and abandonment. As the wave continues to move east, code enforcement still works in the same archaic, complaint based system.
The good news is that there is plenty of time left to start taking actions to ease the pain going forward. Many cities across the country have implemented innovative tools that help stop vacant structures from becoming blighted. ARRA (stimulus) funding opens the door for more cities to adopt some of these tools. I am going to provide a brief overview of only a couple of proactive tools that could be applicable in Memphis, but any proactive tool would be of great use to Memphis communities. If you want to read about more of the tools being enacted across the country, browse on over to the National Vacant Properties Campaign.
Vacant Property Registration
Many US cities have enacted Vacant Property Registration (VPR) ordinances which help to prevent vacant properties from turning into problem properties. These ordinances require owners of vacant buildings to register their property with the city and generally charge a registration fee with penalties for those not complying. Once registered, the properties are inspected periodically to ensure their compliance with city code. Most VPR ordinances require a minimum amount of liability insurance on registered properties and some require that a property management company be hired to keep the vacant property up to code. If a property is not in compliance with the VPR ordinance then a penalty is assessed. Penalties are usually monetary and each day that the property is out of compliance is a separate offense.
Chula Vista, CA’s VPR ordinance, cited as a best practice by the 2008 US Conference of Mayors, registers properties which are entering into foreclosure and are vacant. This ordinance charges a $70 annual registration fee. The ordinance is enforced by the city’s planning and building department. No additional staff has been available, but so far the program has generated enough revenue to nearly cover its administration costs. In only the first nine months of operations $61,500 in fees and penalties were collected while $174,302 has been assessed in special assessment liens (US Conference of Mayors). Although this ordinance allows for foreclosed homes to be proactively inspected, Chula Vista has not had the capacity to be proactive in enforcing the ordinance. Administrators found that the main problem in administering the ordinance was that it was often difficult to identify and locate the current beneficiaries of a mortgage.
Memphis could benefit from a VPR ordinance if it is properly drafted. The issue at hand for Memphis would be enacting the ordinance properly. Foreclosures are entering the market in Memphis at a rate among the fastest in the country. There would be obstacles in implementing a VPR ordinance such that it becomes the proactive tool that it is meant to be. Chula Vista recognizes that one of their greatest obstacles is identifying the actual beneficiaries of a mortgage. Memphis would likely face that same problem. Chula Vista also lacks the resources to make the VPR ordinance a proactive tool. Memphis could potentially combat both of these problems by simply hiring more staff. While running the VPR process is costly, Chula Vista has shown that it is mostly self-sustaining.
Proactive Code Enforement as a Supplement to the Complaint Based System
Memphis has a huge assett to help curb blight in the Neighborhood by Neighbor Survey. This survey, conducted by CBANA, painstakingly documents each problem property that they find in Memphis neighborhoods. Memphis only needs to take action on this massive amount of data that is available as a resource. Other cities have taken a similar approach within their own housing departments and have taken action. Baltimore has taken the same approach wich a block by block survey. They use the data to focus code enforcement on neighborhoods where it can have the most impact. I have no idea what conversations have been taking place as Neighborhood by Neighbor makes significant progress, but it would be a real shame if Memphis did not take full advantage of this resource.
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