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Wednesday, July 02, 2008

Editorial: Turning empty homes into opportunities

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15 Comments:

Blogger Bob said...

Cities are adopting wise policies on vacant houses.

Last update: June 27, 2008 - 6:34 PM

VACANT PROPERTIES
Minneapolis 927

St. Paul 2,000

Sources: Cities of St. Paul and Minneapolis.

• • •

"We're in a rebuilding mode ... the city is priming the pump.''

-- TOM STREITZ, Minneapolis director of Housing Policy and Development.

It's a basic, well-known investment principle: Buy low, sell high. And with home prices dropping due to the credit crisis, foreclosures and the economy, it's a good time to use that advice.

Yet it matters mightily who gets those bargain-basement deals on homes -- especially in urban areas with growing numbers of foreclosed, vacant houses. The same lower prices that can benefit responsible buyers can also open doors for irresponsible speculators and slumlords. The last thing city neighborhoods need is a new wave of absentee owners who don't care for their properties.

To their credit, the core cities of Minneapolis and St. Paul are taking sensible, proactive steps to head off that problem. By adjusting some housing codes and regulations, the cities have developed good blight-prevention policies that can be models for other cities and counties.

Minneapolis, for example, now charges a $1,000 fee to change a vacant house from homestead to rental. The idea is to discourage such conversions. The city also imposes a hefty $6,000 annual fee on vacant property owners under certain conditions. That helps the city cover the costs of boarding up abandoned homes as well of maintenance tasks such as mowing and shoveling. Vacant houses can also affect policing costs when they attract drug dealing, vandalism or other illegal activity. According to housing officials, that high fee has prompted several owners to turn properties over to the city.

In another effort to reclaim and develop homes for families, the city successfully brought legal action against Roseville-based TJ Waconia for mortgage fraud that resulted in dozens of foreclosures on the North Side. As a result, the city controls 140 more homes that will be made available to responsible owners.

In St. Paul this week, council members wisely approved the last of several vacant-property code reforms. Under the new ordinances, owners must bring buildings up to safety codes before they can be sold. In addition, buyers of mid-level "fixer-uppers'' have to prove their financial ability to fix the homes before the sale can close. Basic safety concerns, such as improper electrical wiring, broken windows or deteriorating roofs, walls and ceilings must be addressed.

And like Minneapolis, St. Paul has increased the cost of owning a building that sits empty too long. The city once charged owners only $250 annually; now the fee is $1,000.

Minneapolis housing officials say their efforts are paying off because the hardest-hit communities are beginning to attract good buyers. Nearly 500 people recently applied for a city program that offered funds to use toward down payments or home improvements. Applicants must live in the house, get homeownership counseling and buy on a block with at least one vacant house.

It is difficult to see boarded-up homes sprout like weeds. But it is encouraging that city governments are taking smart steps to turn "buying low'' into building stronger communities.

9:46 AM  
Blogger Bob said...

Bill Cullen provided this information.

According to the US census
, Mpls has 168,606 housing units and St. Paul has 115,713. This means that 1.7% of the homes in St. Paul are registered vacant while .5% of the homes in Mpls are vacant.

9:53 AM  
Anonymous Anonymous said...

That is because St. Paul has an agenda to remove the poor by removing the housing. Get rid of the nest and get rid of the critter.....right Eric?

8:11 PM  
Anonymous Anonymous said...

Put more diplomatically, St. Paul is working to overcome the education and income gaps between whites and minority residents. Isn't that right S.O.B. Journer?

8:42 PM  
Anonymous Bill Cullen said...

This is interesting to me. As many of you know (I am calling and talking with people), I am trying to get back into an aggressive buying mode. All of the real estate agents I have spoke with have given me the same advice: DO NOT BUY REGISTERED VACANT BUILDINGS. Their logic, which I agree with, is that the cities requirements are so high, the costs are not worth it.

2000 empty homes, 1.7% of all housing and realtors are recommending no one buy them.

Will we ever dig out of this hole?

Bill Cullen.

3:52 PM  
Anonymous Bill Cullen said...

One more thing... Can someone elaborate on what the St. Paul city council passed? The article says "owners must bring buildings up to safety codes before they can be sold .... such as improper electrical wiring, broken windows or deteriorating roofs, walls and ceilings must be addressed."

Isn't that another way of saying fix everything? Why would the city council want to make it harder to sell real estate -- especially distressed? I am dumbfounded the council would do this and more amazed the strib likes the idea! Stupid is as stupid does.

Bill Cullen.

4:01 PM  
Anonymous Anonymous said...

I'm suprised you don't understand this Bill. Kepp your eyes on ricomen, they've had the answer all along. The city is eliminating all the housing the poor (trouble makers) can occupy. They cant't raise taxes, so they cut expenses and the poor are an expense. That's why they want to make it harder to sell, and especially the distressed stuff! They don't want a new bunch of landlords coming in and providing low income housing (crime magnets) after they have just chased the original bunch out. This guarantees it!

7:07 PM  
Anonymous Bill Cullen said...

Come on Chuck, Eric, Froggy, etc help me out here.

St. Paul claims one of their biggest problems is the housing crisis and the vacant buildings.

How will these changes "prime the pump" as the Strib says?

I think they are all very bad ideas. Seriously, as a guy who will start aggressively buying, these moves tell me St. Paul will trail the rest of the metro in recovery. Help me understand...

Bill Cullen.

8:02 AM  
Anonymous Anonymous said...

It would appear that St. Paul wants to be sued for this and they surely will be. Who do they think they are to tell people they cannot sell thier property? This vity is starting to look like Russia more and more every day.

9:10 AM  
Anonymous Anonymous said...

"Nearly 500 people recently applied for a city program that offered funds to use toward down payments or home improvements."

And not one of them has 2 nickles to rub together. Just another handout program that's going to backfire in their face!

9:17 AM  
Anonymous Anonymous said...

I find it odd that the people of St. Paul are so stupid that they need a city council to tend to the most basic of needs. Why is it when you go to the suburbs, people seem to be able to get along and live their lives without all these government intrusions?

10:13 AM  
Anonymous Anonymous said...

St. Paul is aspiring to be the "Bureaucracy Capital of the World." Think about all the bureaucrats that need to administer all the issues they have created. All of them will need to be housed. Once they get this rolling, bureaucratic Nazis will make a beeline for St. Paul, the Fatherland.

12:56 PM  
Anonymous henry said...

This should be titled "turning vacant houses into vacant lots" because the banks are not equiped to fix them and since they are insured they don't care what happens to them. St Paul City Council is just too, too STUPID.

12:44 PM  
Anonymous Anonymous said...

"I find it odd that the people of St. Paul are so stupid that they need a city council to tend to the most basic of needs. Why is it when you go to the suburbs, people seem to be able to get along and live their lives without all these government intrusions?"

B.S.
These suburban areas would falter i f it wasn't for the St paul or Ramsey County officials. The burbs benefit from being close enough to the city for its people to take advantage of the economic engine and jobs there. Their local infrastructure like roads, brigdes and parks are county owned so they share taxes for upkeep. Of course having a city with more than a quarter million people in the county helps keep their portion of taxes down. They also rely heavily on the county for law enforcement. They may have 8 to 12 members on their force but they contract with the county- at a discount thanks to the big city paying the bulk of the county rate-for most police and emergency services. I guess you think you run your own hospitals too? What about the subsidized commercial development from the state?

You're better to cut this conversation off now. You haven't a leg or fact to stand on?

Oh, not to mention the suburban councils that ban everything you can do from what ornaments can go in your yard to how many cars you can park on the street (one or two)


Eric

10:27 AM  
Anonymous Bill Cullen said...

Eric,

Is the purpose of your ornament comment to imply that burbs have more regulation than St. Paul? Do you REALLY believe that? THAT is funny.

I don't know about county costs as I do not recall any studies on that. However, when looking at the state financing, the burbs pay in FAR more than they receive. St. Paul is near break-even and rural communities are the main beneficiaries from state taxation.

Bill Cullen.

10:04 PM  

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