SPI's High Risk Specialist J Nicholas Schwegel attended the Ohio CDC (Community Development Corporations) Association Conference on September 29, 2004 for a segment titled Vacant & Abandoned Properties.  SPI had been invited to attend by Judge Raymond Pianka of Cleveland Municipal Court-Housing Division.

Judge Pianka introduced J to Robert Vilkas, Deputy Director of the Department of Building and Housing for the City of Cleveland (216-664-2282). J mentioned that SPI has begun to develop a working relationship and to establish good contacts with the City of Cleveland, including Damien Borkowski, who attended a USFN Conference with SPI in Hollywood this past June as a panelist for a Code Enforcement discussion group, of which Mr. Vilkas indicated he was aware.  

J discussed SPI's role in the industry and the company's primary concerns of protecting and preserving properties where the borrower is in default and the property has been vacated and is suffering from neglect.  SPI is working hard to establish relationships in code enforcement departments across the country, with the goal of opening lines of communication between the cities and the servicers, to help expedite accomplishing their shared goal of protecting vacant properties from further deterioration and preventing them from posing an eyesore or danger to the surrounding community.  Mr. Vilkas was very receptive and asked J to contact him again soon to talk further.

There are currently approximately 11,000 vacant properties in Cuyahoga County.  Fully half of these are located within the city of Cleveland.   Judge Pianka stated that Cleveland's main goals are 1) to prevent abandonment, 2) to maintain the security of properties that have been abandoned, and 3) to transition abandoned properties back to occupied, maintained homes.
 
One of the initiatives to accomplish the above goals is the Public Nuisance Abatement Statute 3767.41, which provides that a neighbor who lives within 500 feet of the property deemed a nuisance may bring a nuisance action and may ultimately be assigned a receivership to restore the property.  Other qualified persons/entities who may bring a nuisance action include a tenant of the building alleged a nuisance, a municipal corporation where the property is located, or a duly organized non-profit with a goal of improving housing conditions in the county or municipality in which it is located.

Speaker Lisa Mueller Levy of LISC (Local Initiatives Support Corporation) and Smart Growth America analyzes the growing rate of vacant and abandoned properties in the country as well as in Cleveland, with the goal of returning vacant/abandoned properties to good use.  LISC and Smart Growth America founded the National Vacant Properties Campaign (NVPC) two years ago (www.vacantproperties.org). NVPC's main goals are to build a national network, through outreach to the government, the private sector, and the organization of a national forum; to enhance communication, through articles, reports, e-newsletters, the Web, speeches, conferences, and outreach; to advance research and policy work by advancing the level of knowledge through case studies; and to provide training and technical assistance to local groups and local governments.

She also cited a number of examples of communities that have made truly impressive progress reducing blight in their neighborhoods, including: Richmond, VA ("Neighborhoods In Bloom," accomplished through proactive code enforcement);
Flint, MI and Atlanta, GA (expedited/improved tax foreclosure); New Orleans, LA ("Quick-Take Legislation"); and Wilmington, DE (vacant property registration, where property taxes on registered vacant properties increase incrementally every year that the property remains vacant).

Speaker John Kromer is a senior consultant for the Fels Institute of Government at the University of Pennsylvania, engaged in research to address urban blight and development.  He worked with the city of Philadelphia to prevent abandonment in the 1990s with the mayor who is now the governor of PA.  He and the Fels Institute of Government also worked with the city of Reading, PA to provide a city wide vacancy inventory report.  The Fels Institute also worked on a project in Philadelphia called the Neighborhood Information System (NIS), which allows authorized users to obtain vital information about properties within the city of Philadelphia. 

The final speaker was the Genesee County, MI Treasurer Daniel T. Kildee.  He remarked that Flint, like many other old urban Midwest cities, has experienced dramatic population loss over the last 30 years.  The city that was the birthplace of GM and UAW currently has more than 3400 vacant/abandoned properties.  In 1999, Genesee County passed a law enforcing mandatory foreclosures on properties where the county has not received a tax payment for two years.  The clear title is awarded to the county, which then auctions the properties.  Mr. Kildee stated that non-profits have first choice on purchasing the property.  The county constructed the Genesee Land Bank which decides what to do with foreclosed land.  Clean-ups are financed by late-payment tax penalties.  The county has also recently undertaken a program called the Brownfield Plan, which allows the county to borrow against future taxes to pay for demolitions, clean-ups, administrative work, etc.

This conference provided a wealth of valuable information to cities and local government groups about programs other cities have implemented to manage the problems posed by vacant/abandoned properties.  This is a growing problem throughout the country, and it's clear that city governments are struggling to keep a handle on the problem.