Indianapolis Amends Code for Vacant Building Standards
On July 14, the Indianpolis Star published an article titled Council passes ‘zombie homes’ ordinance.
Council passes ‘zombie homes’ ordinance
At issue is a troublesome category of abandoned housing that multiplied in the wake of the mortgage crisis
The City-County Council took aggressive though largely symbolic actions Monday against Mayor Greg Ballard’s electric car share program and abandoned foreclosed homes.
The council approved an ordinance by a 17-10 vote to hold banks accountable for so-called “zombie mortgages” that foreclosed home owners have walked away from. Though the ordinance can’t be enforced under Indiana law, its backers insist it isn’t a meaningless exercise.
At issue is a troublesome category of abandoned housing that multiplied in the wake of the mortgage crisis. The houses are caught in limbo because owners have abandoned them, though they still own the titles for years with no one taking care of them.
Following in the footsteps of other cities across the country, the council wants to force banks to step in when an owner walks away.
Council members engaged in a spirited but courteous debate. Though all agreed that the vacant buildings were hurting their neighborhoods, some questioned the practicality of passing a toothless ordinance.
“This is not enforceable; this does nothing,” said Republican Aaron Freeman. “I have no idea why we would pass this. If you want to change the law, run for the state legislature.”
“For us to pass this is a big waste of time,” said Republican Jack Sandlin. “It’s air, it’s paper, it’s ink.”
Defenders of the action said it sends a powerful message to the legislature and their own constituents that they want to address urban blight. And Republican Jeff Miller said it has already grabbed the notice of the banking industry.
“If this was just ink and air, why did we all of a sudden start getting emails from banking lobbyists when we drew up this ordinance?” Miller asked. “Why are they now hitting us up not to do this?”
Miller and others said passing the ordinance puts the city in a position to act quickly if the law is changed.
Republican Robert Lutz said council members owe it to their constituents to fight for the law.
“Our city is made up of neighborhoods, and we need to empower them,” Lutz said. “We are sending a message to the state legislature, and we are encouraging our constituents to contact them and say, ‘Why can’t you change this?’ ”
Democrat Zach Adamson said the ordinance would send the message that “we hold all owners accountable whether they are individuals or corporations.”
As written, the ordinance would treat any lender that issues a foreclosure notice on a vacant home like a property owner. Theoretically, that would leave the bank on the hook for cutting the grass, cleaning up trash and other responsibilities.
Zombie homes aren’t the epidemic they were at the height of the housing crisis in 2008. But they haven’t vanished, either.
According to RealtyTrac, a housing data analyst, zombie foreclosures still represent 25 percent of all active foreclosures. Indiana had 5,217 zombie homes at the end of January — the seventh most in the country. City officials haven’t studied how many there are in Indianapolis.
There’s little doubt the ordinance wouldn’t stand up in court without a change in state law — Miller acknowledges as much. State Sen. Jim Merritt, R-Indianapolis, the architect of the abandoned housing bill, promised to study the issue in more depth this summer but said the issue should be addressed statewide, not at the local level.
Meanwhile, a proposal co-sponsored by Republican Christine Scales and Zach Adamson would require BlueIndy to remove within 90 days five demonstration models that have been parked on Washington Street Downtown.
Adamson and other council members have said that in rolling out the program, Ballard, a Republican, brushed aside their concerns and those of their constituents. The critics also oppose using $6 million in city funds to help pay for the $50 million program.
The resolution states that the $6 million could be used “ to repair some of our critically failing infrastructure around the county” and adds that the cars are parked illegally between Meridian and Pennsylvania streets.
The resolution states that it is illegal for cars to be “stopping, standing or parking at all times on that portion of Washington Street” and that “no person shall park a vehicle on any street in the city for the primary purpose of displaying advertising of any nature.”
The city and BlueIndy, a subsidiary of a French conglomerate, are building 200 charging stations and rental kiosks around the city. BlueIndy has dedicated $41 million, while Indianapolis Power & Light Co. is paying for construction of the chargers.
Parking meters funds are being used to pay the city’s share. The proposal was referred to the Public Works Committee, chaired by Adamson.
Please click here to view the article online.
Please click here to view the ordinance (Proposal No. 153, 2015) [pdf].
About Safeguard
Safeguard Properties is the mortgage field services industry leader, preserving vacant and foreclosed properties across the U.S., Puerto Rico, Virgin Islands and Guam. Founded in 1990 by Robert Klein and headquartered in Cleveland, Ohio, Safeguard provides the highest quality service to our clients by leveraging innovative technologies and proactively developing industry best practices and quality control procedures. Consistent with Safeguard’s values and mission, we are an active supporter of hundreds of charitable efforts across the country. Annually, Safeguard gives back to communities in partnership with our employees, vendors and clients. We also are dedicated to working with community leaders and officials to eliminate blight and stabilize neighborhoods. Safeguard is dedicated to preserving today and protecting tomorrow. Website: www.safeguardproperties.com.
