Foreclosures costing suburbs time and money

Nobody home
Mounds View City Council member Joe Flaherty lives across the street from a vacant, foreclosed home. He says cities like Mounds View should consider putting more fees on tax rolls of vacant property.
MPR Photo/Mark Zdechlik

Standing in the driveway of his Mounds View home, Joe Flaherty points directly across the street to a house that has been sitting empty for a long time.

"People drive down the street, they recognize something's going on with this house," Flaherty says. "If you look at the driveway it is unplowed after all the snow that we've had, and basically people know and that's the sign that nobody's living there. It's a worry to the community. It's a worry to me."

Flaherty's concern is simple. The vacant house threatens the stability of his neighborhood. It could attract crime or fall into disrepair. That could cut into his quality of life and the value of his house.

A foreclosed home in Coon Rapids with a new for sale sign offers hope of a new owner coming in and taking care of the property.
MPR Photo/Mark Zdechlik

Flaherty sees the foreclosure problem from two sides. Not only does he see a vacant house every time he looks out his picture window, he is also a Mounds View City Council member trying to figure out how the suburb might best deal with the increasing problem of vacant properties.

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Most people are unaware of the threat foreclosure may pose to their own communities, Flaherty says.

"I think people don't really understand the magnitude of the problem within their city, and how many homes are abandoned or foreclosed," Flaherty says.

Foreclosure proceedings are registered at the county level and not with cities. That means a big challenge for suburbs is simply determining which properties are in foreclosure.

To the northwest of Mounds View in the city of Coon Rapids, building inspector Michelle Posch provides a tour of some of the vacant homes in her community.

Abandoned, flooded
An abandoned townhome in Coon Rapids was found flooding with water.
MPR Photos/Mark Zdechlik

The first stop is a house where, just a few weeks earlier, city crews were dispatched to shut off water that had been accumulating in the basement.

The house does not look that bad, but it certainly looks abandoned. There is plywood over the door of the detached garage. Posch says the back of the house is completely boarded up and that it is a terrible mess inside.

The house was attracting people who did not belong there and that was worrying the neighbors, she says.

"They were scared," Posch says. "They've got all these people hanging out. They don't know who they are. They know they don't belong there."

The city of Coon Rapids paid to have trash removed from the yard. Posch says city workers put the boards up.

We stop by several other vacant homes on which the city of Coon Rapids is trying to keep an eye. Posch calls a for-sale sign in front of one them good news. If someone buys the empty house and moves in, Posch says there is a much better chance the property will be cared for.

"People don't really understand the magnitude of the problem within their city, and how many homes are abandoned or foreclosed."

The tour ends outside a vacant townhome that came to the city's attention around Thanksgiving. Posch says her colleague came to check on this property after a neighbor called the city, saying water was flowing into their adjacent unit. The inspector found a mess that was getting worse by the second.

"When they went in there, there was turkey on the table, garbage all over the place, clothing all over the place," Posch says. "There was water running down the stairs. It was just really soggy. Everything upstairs and the whole stairway was really soggy."

The water is off now, and a big sheet of plywood covers a second-story window above the garage. The townhome is now on a list of properties Coon Rapids inspectors and police are watching.

Not long ago she spent most of her time licensing and inspecting rental property, but now the focus is on foreclosed properties, Posch says.

"This is the major problem," Posch says. "It's all over. Everybody's having the same problems. We're all trying to deal with it, all trying to find some ways of doing some proactive things."

Just as Posch works with law enforcement in Coon Rapids, housing officials in Mounds View work with their city's police department to track vacant properties. Mounds View Housing and Code Enforcement Director Jeremiah Anderson holds weekly meetings with the police to keep a list of abandoned homes up to date.

One day recently, Anderson sat at a conference room table at Mounds View City Hall with public service officer Justin Solberg. Solberg checks out properties Anderson thinks are vacant. Solberg says it is good information for police to have.

Staying current
Mounds View Housing and Code Enforcement Director Jeremiah Anderson meets regularly with city police officer Justin Solberg to keep current a list of vacant properties.
MPR Photos/Mark Zdechlik

"We have a list of vacant and foreclosed properties, and we need to keep that current to know what's going on in the city. Because sometimes we get police calls to these properties, and it helps our officers when they know if people should be there or if people should not be there," Solberg says.

Jeremiah Anderson echoes what his counterpart from Coon Rapids says about the time he is spending keeping track of vacant properties.

"It's kind of the old adage where we're spending a lot of our time at a few places. But the few places are growing, so we're spending a lot of time in a lot more places," Anderson says. "Sometimes the daily activities to deliver services to the general public suffer because of it."

Mounds View City Council member Joe Flaherty, who lives across the street from a long-vacant foreclosed house, is asking the city to consider charging significantly more money to take care of idle homes.

Flaherty thinks stinging fees might be enough to get the attention of some financial institutions to take better care of foreclosed property.

"To get their attention you've got to hit them in the pocketbook," Flaherty says. "To charge them on their tax rolls $100 or $200 is not going to do anything to make them to move. I think if perhaps the cleanup costs, the maintenance costs to these homes within cities was a little bit steeper, perhaps we can get the banks' attention and they can take care of their properties that they have here."

One problem with tacking large upkeep fees on the tax rolls of vacant property is that it makes it even harder to eventually sell those homes to new owners who could take care of them.

The Association of Metropolitan Cities, which represents nearly 90 cities in the seven-county metro area, says state lawmakers can expect to hear from cities about the strain vacant properties are putting on local governments.

Among other things, the association says it is considering asking the state to give cities dedicated money to help defray costs of securing and monitoring vacant homes. It is also looking at law changes that would give cities easier access to foreclosed property.