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Cascade: No. 66, Fall 2007

Municipalities Struggle with Foreclosed Houses

Local governments in communities with a substantial number of vacant foreclosed properties are struggling to meet the demands and costs of maintaining the properties.

Municipalities are fixing broken windows, mowing lawns, and sometimes installing alarms to try to prevent blight from spreading to the rest of the community. Municipalities lose property taxes after properties become vacant and find that their expenses rise as a result of increased fire and police calls related to the properties.

Mark Wiseman, director of a foreclosure prevention program in Cuyahoga County, OH, which includes Cleveland, said that municipalities in the county “don’t have vacant property departments” and existing building and other departments don’t have the staff or the budget for a major property maintenance role.

The problem of increased vacancies “is catching Cuyahoga County communities flat-footed,” he said. They are responding in a “piecemeal” fashion, he said, with different departments doing what they can.

“It’s hard for a municipality to know who owns a foreclosed house due to multiple changes of ownership,” Wiseman said. Municipalities could place a special assessment for such tasks as cutting the grass but few have filed suit against title companies to recover such costs, he said.

In July, the county asked eight inner-ring suburbs of Cleveland how much they were spending on maintaining vacant properties. The suburbs, which had about 3,500 vacant houses at the time, had difficulty coming up with cost figures but estimated they had spent roughly $1.5 million on vacant property-related costs so far this year, he said. At the time, Cleveland had at least 9,000 vacant houses with virtually no buyers moving into the city, he said. A vacant Cleveland house is often stripped of doors, cabinets, and copper piping in three days and then it costs more to rehabilitate the house than the house is worth, Wiseman said.

In 2006, the Cuyahoga County treasurer’s office started a foreclosure prevention effort in which the county provides grants to nine housing nonprofits to add staff for counseling and provided staff with training on foreclosure workouts. The office has also marketed an area hotline that homeowners can call for assistance.

For information, contact Mark Wiseman at trmnw@cuyahogacounty.us;
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