Portland Signals More Aggressive Approach to Vacant, Abandoned Homes
Industry Update
April 5, 2016
Portland announced Tuesday that it wants to be able to foreclose on abandoned, vacant and derelict homes or ask courts to place the so-called “zombie houses” under the control of a third party, paving the way for properties to get cleaned up and put back on the market.
The extent of the problem isn’t clear — city officials couldn’t provide specific numbers, including the total number of “zombie homes” in Portland — and solving it would require navigating a complex paper trail of ownership records, mortgage debts and lien payments. But during a City Council work session Tuesday morning, Mayor Charlie Hales signaled Portland will take a more aggressive tack in dealing with landowners who let homes slide into disrepair and become havens for squatters or drug use.
“What a disconnect that in a city with a red-hot housing market…where you can sell property for a very good return, we have zombie houses,” Hales said. Commissioners Dan Saltzman, Amanda Fritz and Nick Fish indicated they supported Hales’ plan. (Commissioner Steve Novick was absent.)
Portland hasn’t foreclosed on a home since 1971, city officials said. Hales thinks it’s time the city at least threatened to deploy the tool again.
Any foreclosure action would be lengthy and pose a steep challenge for the city. Portland could foreclose on unpaid liens resulting from code violations or fees. But a property owner, without addressing the underlying problems, could easily avoid losing possession of the home by simply getting current on lien payments. Secured creditors like banks would also have the ability to intervene and take control of the foreclosure process themselves before the city could take ownership.
The other option, city staff said, is for Portland to lobby the courts to appoint a receiver, who could temporarily take title to a derelict property until it is brought into compliance with city codes. The receiver could be a local nonprofit such as Proud Ground, whose executive director Diane Linn appeared before commissioners to support the idea.
The receivership model has been successful in cities such as Baltimore, said Zach Klonoski, one of Hales’ policy advisers. Often, the property owner will appear “at the drop of a hat” to resolve code issues after a jurisdiction threatens receivership action.
Sally Bowman, who moved to East Portland in 2009, has been dealing with squatters next door for years, she told commissioners. The empty home is near an elementary school and has become a magnet for drug use, trash and graffiti.
“I have four kids now,” Bowman said. “I don’t want to let my little kids out in the yard. What are they being exposed to?”
City staff also recommended that commissioners revisit whether to establish a registry of vacant properties, an idea floated by former Mayor Sam Adams that was eventually abandoned.
Portland Police Sgt. Randy Teig said law enforcement officials manage 375 distressed properties in the East Precinct, a large area stretching from Cesar E. Chavez Boulevard to as far as Southeast 174th Avenue. More than 400 homes have been boarded up since early 2014, he said. Meanwhile, the Bureau of Development Services is monitoring 25 abandoned homes they consider to be among the city’s worst cases.
Police officials have spent hours boarding up and responding to zombie homes — time that could be better used fighting gang violence, Hales said. And during a building boom, the development bureau’s employees have stayed busy tracking code violations at derelict houses and evaluating enforcement measures. The city could save “a fortune” if the homes were restored and then sold or rented to long-term residents, and the positive impact on neighbors would be “priceless,” Hales said.
As it stands now, “we are the property managers for slumlords,” Hales said. “They’re worse than slumlords, because at least slumlords have paying tenants.”
Source: The Oregonian
