The Hidden Costs of Vacant Properties

Industry Update
December 21, 2018

Source: Hot Air

The St. Louis Post Dispatch published an interesting story today titled “Tipping Point: Thousands of vacant buildings take heavy toll on St. Louis police, firefighters.” The point of the story, which is part of a series, is to focus on something that most people probably don’t spend a lot of time thinking about. The author makes a convincing case that the costs associated with vacant buildings are significant:

Fire and police officials say it’s hard to know exactly how much the buildings where no one lives or works are costing taxpayers. But they can point to some statistics.

They know, for example, that vacant buildings account for more than 40 percent of the fires they have to fight each year…

Police officers, too, could perform more community outreach if they didn’t have to spend time on structures that serve as a nexus for criminal activity.

A Post-Dispatch analysis of St. Louis police data shows that about a third of all calls for service within the past year were within 150 feet of a property identified as vacant by the city…

In addition to responding to calls for service, the police department also devotes six police officers — one for each district — and Sgt. John McLaughlin to the Problem Properties Unit, which coordinates with other city divisions to deal with buildings — some vacant — where criminal activity is chronic…

“Criminals use these places to hide their guns and drugs,” says McLaughlin, the sergeant assigned to the Problem Properties Unit.

A St. Louis Chief Investigator says fires often destroy evidence of what started them and even when the evidence of arson can be found, that doesn’t necessarily point them to the person responsible.

Police work to seal up vacant properties at a cost of about $800,000 per year, but the Post Dispatch notes that it’s common for police to be called out to buildings that have already been boarded up, sometimes more than once. In a video that’s including in the report, police officers say the most common thing to find inside are human waste and drug needles. They occasionally find homeless people inside who are looking to escape the cold and when they do they usually try to find them some alternative shelter.

Today’s article is part of a series on the topic. In a previous article published in September, the city estimated the cost of vacant buildings as $66 million per year:

When Shadiah Thomas steps out the front door of her duplex in the 3900 block of Labadie Avenue, she sees crumbling homes all around her.

To her right are five vacant buildings, including one frequented by drug users and two gutted by fire. To her left, next to an empty lot, is a two-family brick building that’s been empty for at least three years. Across the street, facing her, are more vacants.

“It’s depressing here,” she says…

In a city of just over 300,000 people now — a big drop from its postwar high of 856,000 — there are about 25,000 abandoned properties, according to a city estimate. More than 7,000 of those are vacant buildings, including about 4,000 that have been condemned…

A growing sense of urgency appears to have gripped City Hall, where the Krewson administration is working closely with a coalition of nonprofit and community development groups on the vacancy problem.

Krewson’s office estimates vacant properties cost the city as much as $66 million last year. Vacant lots need mowing and tree removal. They foster illegal dumping and use up police time because of the crime they attract. Over the last two years, city firefighters have responded to more than 500 fires at vacant properties, Krewson’s office says.

Of course, not every city in the U.S. is facing this problem but there are others that are. This graphic was produced by the Lincoln Institute of Land Policy based on government data and published earlier this year at Curbed.

As you can see, St. Louis is in the middle of that graph and other cities have comparable or even bigger problems. In every case, the vacant properties are a potential magnet for crime and a drain on already tight resources.

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CEO

Alan Jaffa

Alan Jaffa is the Chief Executive Officer for Safeguard Properties, steering the company as the mortgage field services industry leader. He also serves on the board of advisors for SCG Partners, a middle-market private equity fund focused on diversifying and expanding Safeguard Properties’ business model into complimentary markets.

Alan joined Safeguard in 1995, learning the business from the ground up. He was promoted to Chief Operating Officer in 2002, and was named CEO in May 2010. His hands-on experience has given him unique insights as a leader to innovate, improve and strengthen Safeguard’s processes to assure that the company adheres to the highest standards of quality and customer service.

Under Alan’s leadership, Safeguard has grown significantly with strategies that have included new and expanded services, technology investments that deliver higher quality and greater efficiency to clients, and strategic acquisitions. He takes a team approach to process improvement, involving staff at all levels of the organization to address issues, brainstorm solutions, and identify new and better ways to serve clients.

In 2008, Alan was recognized by Crain’s Cleveland Business in its annual “40-Under-40” profile of young leaders. He also was named a NEO Ernst & Young Entrepreneur Of The Year® Award finalist in 2013.

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Esq., General Counsel and EVP

Linda Erkkila

Linda Erkkila is the General Counsel and Executive Vice President for Safeguard Properties, with oversight of legal, human resources, training, and compliance. Linda’s broad scope of oversight covers regulatory issues that impact Safeguard’s operations, risk mitigation, strategic planning, human resources and training initiatives, compliance, insurance, litigation and claims management, and counsel related to mergers, acquisition and joint ventures.

Linda assures that Safeguard’s strategic initiatives align with its resources, leverage opportunities across the company, and contemplate compliance mandates. She has practiced law for 25 years and her experience, both as outside and in-house counsel, covers a wide range of corporate matters, including regulatory disclosure, corporate governance compliance, risk assessment, compensation and benefits, litigation management, and mergers and acquisitions.

Linda earned her JD at Cleveland-Marshall College of Law. She holds a degree in economics from Miami University and an MBA. Linda was previously named as both a “Woman of Influence” by HousingWire and as a “Leading Lady” by MReport.

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COO

Michael Greenbaum

Michael Greenbaum is the Chief Operating Officer of Safeguard Properties, where he has played a pivotal role since joining the company in July 2010. Initially brought on as Vice President of REO, Mike’s exceptional leadership and strategic vision quickly propelled him to Vice President of Operations in 2013, and ultimately to COO in 2015. Over his 14-year tenure at Safeguard, Mike has been instrumental in driving change and fostering innovation within the Property Preservation sector, consistently delivering excellence and becoming a trusted partner to clients and investors.

A distinguished graduate of the United States Military Academy at West Point, Mike earned a degree in Quantitative Economics. Following his graduation, he served in the U.S. Army’s Ordnance Branch, where he specialized in supply chain management. Before his tenure at Safeguard, Mike honed his expertise by managing global supply chains for 13 years, leveraging his military and civilian experience to lead with precision and efficacy.

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CFO

Joe Iafigliola

Joe Iafigliola is the Chief Financial Officer for Safeguard Properties. Joe is responsible for the Control, Quality Assurance, Business Development, Marketing, Accounting, and Information Security departments. At the core of his responsibilities is the drive to ensure that Safeguard’s focus remains rooted in Customer Service = Resolution. Through his executive leadership role, he actively supports SGPNOW.com, an on-demand service geared towards real estate and property management professionals as well as individual home owners in need of inspection and property preservation services. Joe is also an integral force behind Compliance Connections, a branch of Safeguard Properties that allows code enforcement professionals to report violations at properties that can then be addressed by the Safeguard vendor network. Compliance Connections also researches and shares vacant property ordinance information with Safeguard clients.

Joe has an MBA from The Weatherhead School of Management at Case Western Reserve University, is a Certified Management Accountant (CMA), and holds a bachelor’s degree from The Ohio State University’s Honors Accounting program.

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Business Development

Carrie Tackett

Business Development Safeguard Properties