Who pays when a home goes empty?

by Brandt Williams, Minnesota Public Radio

The foreclosure crisis has led to a sharp increase in the number of abandoned buildings in the city of Minneapolis. The city's list of vacant and boarded properties has grown to over 800. City officials say monitoring and managing all these buildings is draining city resources. And they say the city needs to triple the fee it charges property owners who let their homes sit vacant.

Minneapolis, Minn. — To get the most vivid picture of the foreclosure crisis in Minneapolis, you have to come the city's northside. It's home to 60 percent of the city's boarded and vacant buildings. City inspectors like Farrokh Azmoudeh have to keep track of them all.

Azmoudeh is sitting in his green city-issued Chevy Malibu sorting through a stack of papers which contain the addresses of homes that he needs to visit today. He says the average work summary for an inspector is about 120 pages long.

"My summary, 430 pages, as of Monday, yesterday," he says.

Azmoudeh and two other inspectors do nothing but drive around the city checking abandoned properties. They note if they have been broken into. They check for graffiti and they report when debris like old appliances or tires are dumped on the property. Inspectors post the brightly colored notices on the doors which signal their status as vacant or in many cases condemned. And they add newly boarded homes to the growing registry of vacant and boarded properties.

We head off to Azmoudeh's next assignment and he points out his work along the way. Most of his workload is concentrated in the Hawthorne and Jordan neighborhoods. Every block we drive down has at least one boarded home. Most blocks have two or three - sometimes all right in a row. The slate gray boards on the doors and windows are mounted by a city contractor.

"That is boarded, this is boarded," says Azmoudeh. "You can't keep track of it. I confuse myself somedays, I think did I see that yesterday?"

Azmoudeh parks near the intersection of Bryant Avenue North and 29th street. There are three properties close by. The first is a large white, two and a half story house right on the corner. Azmoudeh tries the front door and it opens easily.

"This is open to tresspass," says Azmoudeh.

The house has been broken into. So Azmoudeh takes out his camera to take pictures of his discovery. He will attach the pictures to the file for this house.

Azmoudeh walks around the side of the house and finds a broken window large enough for a person to fit through. He takes another picture and completes a loop around the house. After he's done, Azmoudeh gets back into his car to do the paperwork.

"We have to give the owner six days ... six days to secure," he says. "I come back on the 7th day."

Azmoudeh spends about four to five hours out in the field every day. He visits about 40 to 50 different properties. Then he goes back to the office where he finishes his paperwork.

For the work he and his colleagues do, the city charges the owners of the boarded and vacant properties a fee of two thousand dollars a year.

But some city officials like council member Gary Schiff say that's not enough.

"When we looked at what the actual cost is, it turns out it's over $6,000 per property," he says.

Those costs don't come just from city inspections. Abandoned properties generate police and fire calls. A city report shows that nearly a quarter of those expenses don't get reimbursed. Schiff says over 90 percent of abandoned buildings have required at least one or more police call, grass cutting, rubbish removal, a re-boarding or visit from the fire department. The city tacks on the cost of some services, like cutting an uncut lawn -- at $110 per job -- as a special assessment.

"The city recovers 78 percent of the assessed costs," says Schiff. "The rest go unpaid because we assess the property taxes which are collected by Hennepin County. If the property goes into forfeiture, then those fees are never paid and the city never gets a dime. So part of what we're doing with this $6,000 fee is recovering the true cost to the city for providing these services."

But that means the city has to send somebody a bill. Schiff says that's tough to do. That's because often the city can't even find who or what bank holds the paper on the home.

"One of the parts of the foreclosure crisis is we're unable to determine which bank owns the title," he says. "Because these homes are being traded and a percentage of the mortgage is being split up and traded on the international markets. We can't even tell who to send a letter to."

The prevalence of abandoned properties in Minneapolis incurs other costs that are much harder to quantify. Besides their unsightly appearance, they make neighbors feel unsafe. And behind each boarding there is the story of an uprooted and displaced family that had to find somewhere else to live.

Inspector Farrokh Azmoudeh says there's something else to consider.

"Once there is a boarded building on any block, the statistics shows there's at least a drop of eight percent in the value of the adjacent homes. Which is not fair to the neighbors," he says.

Boarded and vacant homes, like open sores, are visible signs of an otherwise invisible illness. Recently, the federal government and several lenders announced a series of remedies designed to ease the pains of struggling homeowners and prevent further foreclosures. But these remedies will not help the city with the homes that are already vacant.

Broadcast Dates

• All Things Considered, 02/21/2008, 3:49 p.m.
• All Things Considered, 02/21/2008, 6:17 p.m.