Demolitions. Foreclosures. Progress?

In west Louisville, 3313 Hale Ave. will fall. The city has cited the crumbling, white, two-story home 90 times since 2002. One could call it an eyesore. For that reason, Mayor Greg Fischer applauds the demolition scheduled for this afternoon, as well as other efforts being made to address the city’s estimated 6,000-7,000 vacant and abandoned properties.

At a press conference this morning, Fischer touted the fact that since the start of this fiscal year, demolitions have increased by 30 percent. Foreclosure proceedings have started on 77 homes, the goal being 100 foreclosures by the end of this fiscal year. (The Mayor set aside $125,000 in the budget to foreclose on those 100 properties. Ultimately, the city holds the goal of reducing the number of abandoned properties by 40 percent in the next three years and 67 percent in the next five years.)

Fischer said for each of these properties, there’s a plan. In essence, either someone or an organization has expressed interest in turning the dilapidated property into a productive piece of land.

“It could be we sell it to a neighbor. Or we split it up between two neighbors,” Fischer said. “But there won’t be a home that’s foreclosed on if we don’t have a purpose for it.”

Sounds great. In reality, though, it may not unfold so easily. Once these properties go to foreclosure auction, if someone outbids the interested party, they get it. Those neighbors would be out of luck.

“Yes. We have no control,” Mary McGuire, leader of Metro’s Vacant and Abandoned Property Initiative, tells LEO.

It’s an issue that concerns housing advocates who want to ensure responsible landowners take control of dilapidated properties like 3313 Hale Ave. which sits in Parkland, a neighborhood where 25 to 30 percent of the housing stock is either vacant or abandoned. And that, of course, leads to a whole host of problems, including crime and costs incurred by the city for maintenance.

On the topic of costs, Fischer pointed out that his administration has successfully helped change a state law making the city the top lienholder, even above banks, when properties are sold. So, for instance, while the city has spent $1.8 million caring for properties this past year, when those properites are sold, Metro gets first crack at recovering costs.

“That’s great news for the citizens of Louisville,” Fischer said.

Fischer also lauded other initiatives to deal with the vacant and abandoned issue; one being a proposed registry for vacant properties, an idea that hasn’t been received with open arms by all on Metro Council.

Also, Metro secured $3 million from Attorney General Jack Conway as part of the $19.2 million Kentucky received under the National Mortgage Settlement. That money will go toward the foreclosure of 700 homes, the demolition of 75 homes, and will help build a revolving loan fund to rehab vacant properties.

For more than a year, housing advocates have pushed for dramatic legislative changes they say will help curb foreclosures and vacant and abandoned homes.

First, rather than selling unpaid tax bills (or liens), cities would have the option to float a bond and buy up their own overdue tax liens with fees and interests. The second reform would allow cities to efficiently foreclose and keep the money from subsequent property sales, helping to pay back that bond. Finally, land bank reform would let cities wipe titles clean, assemble land, and seek productive use for empty properties. (As of now, Metro’s land bank is only equipped to accept donated land.)

Pat Mulvihill, Metro’s general counsel, says with a 30-day legislative session, there’s no way those reforms could wind their way through the General Assembly. But, he says, the city will push for a change in state law that will allow an independent third party — say, a nonprofit — to take receivership of a foreclosed property rather than the bank.

Finally, on the issue of vacant and abandoned properties, LEO has an update: In September, LEO wrote about a boarded-up, crumbling pharmacy located at 2000 Portland Ave. The elegant, 120-year-old Victorian structure had languished on the city’s demolition list. At the same time, Metro was making some effort to foreclose on the property, hopefully getting it into the hands of a rehabber. Alas, last month the building was demolished. The piece of property, though, still sits in legal limbo due to complex ownership issues.

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