The foreclosure crisis that has swept the country in the past few years has had wide-reaching effects. Aside from the well publicized double digit drop in average home prices, the many vacant homes are causing many issues for cities like Minneapolis.
The Star Tribune published an article about this topic on March 10th. The article covers some of the common problems: vacant buildings that attract trash, junk, squatters, drug users, and vandalism (ie stolen copper pipes). Who deals with all of this? Definitely not the homeowners! They’ve been forced out due to foreclosures. Banks also aren’t well equipped to deal with it because their role is to service the loan. The burden ends up falling on the cities, who must have the cash and resources available for cleanup, boarding of broken windows, and police surveillance.
To help defray the costs of the dealing with vacant homes, the City of Minneapolis enacted the Vacant Building Registration (VBR) Program. Owners of vacant properties must pay a fee of $6,000 or more per year. The intent is for the banks with foreclosed homes in their inventory to pay when the property is purchased by a new buyer.
Note – I have found that this does not always happen so the fee is NOT paid at closing and ends up being the responsibility of the new owner. This is an avoidable situation. Contact me and I can explain how.
The article points out that some people are unhappy with the fee, especially when comparing it to St. Paul’s $1,100 fee. While the cost may be debatable, the objective of the program is perfectly reasonable. Vacant buildings can become unsightly and are a magnet for vandalism. Regular maintenance and monitoring benefits neighborhoods. One could argue that it is the responsibility of city leaders to take charge during a crisis and do what they can to ensure the safety and well being of its residents.
Please call or email me with any questions on these programs or if you are interested in Minneapolis foreclosed properties.
Tags: foreclosure, vacant building
