Controlling, Acquiring, and Disposing of Vacant Properties

Abstract

No survey of urban neighborhood vacant property solutions can be complete without consideration of the approaches that involve wresting control of derelict properties away from their delinquent owners. Some of these methods can abate nuisances and return properties to productive use without permanently displacing the owners, but, frequently, no long-term resolution can be reached without the local government taking ownership and transferring title to persons ready, willing, and able to rehabilitate the property. Part II of this chapter will examine the structural and legal challenges that municipalities with many vacant properties face in disposing of vacant houses and lots that they have acquired from their delinquent former owners. It will show how land banking reforms have mitigated the problems presented by conventional approaches to the sale of publicly owned real property. Part I of the chapter will look at the various ways municipalities first take control of vacant properties that cannot be remedied through traditional code enforcement means. It begins with an overview of three situations where seizing control is the only effective way of abating the nuisance and reclaiming the property.

Three types of vacant property situations present such intractable resistance to conventional code enforcement responses as to require more aggressive action by local authorities. First, some vacant properties could be rehabbed and returned to productive use but for the fact that their owners are unwilling and/or unable to execute the needed repairs. Second, some vacant properties are so burdened by competing ownership claims, mortgages, and/or other liens as to make further secured investment in them impossible. Third, many vacant houses are located in communities where the prices for habitable houses are not sufficiently high to justify the investment of capital needed to restore the derelict ones. In situations of the first type, in particular, short-term interventions focused on completion of essential repairs would, at first glance, appear to be sufficient. But, as the various solutions are explored, the need to transfer title to the property to a new owner will become more apparent. This chapter will focus on the legal mechanics of, and limits on, the various processes by which local authorities can gain control over nuisance vacant properties.

Keywords: Vacant Houses, Vacant Lots, Code Enforcement, Demolition, Receivership, Land Banks, Tax Foreclosure

JEL Classification: K11, K32