When it comes to the housing recovery in north Minneapolis, there's a tool in our collective toolbox that we haven't been using. In impacted areas, or at the city's request, Hennepin County can accelerate the tax forfeiture process so that vacant properties can go into forfeiture after as little as one year of delinquent taxes. I found out about that opportunity just before I left my job at Hawthorne. I can't help but wonder how much farther along my old neighborhood would be if I had known about this process and utilized it from the start.
Thankfully, I don't have to just wonder. By comparing the current boarded/vacant list and the properties for sale on the MLS in Hawthorne, we can get a pretty good idea.
There are seventeen properties listed for sale on the MLS in Hawthorne as of today. There are fifty structures registered as boarded and vacant in Hawthorne as of July 1, 2013. Not all MLS or VBR structures are residential, and it's possible that there is some crossover in that some of the houses for sale may be vacant. Still, in a housing market that is currently starving for inventory, the potential is there to almost triple the number of available properties in Hawthorne.
Digging a little deeper, the median time that a property has remained vacant since being registered as such in Hawthorne is two years and five months. Out of those fifty vacant structures, two are known to be in the midst of rehab by private developers. Nine are owned by non-profit developers, and eight of those have rehab work that is expected to either finish or at least start in the foreseeable future. Five are already in tax forfeiture, two are owned by the city, and one by HUD. At least five are bank-owned. Two are owned by Mahmood Khan, and the last two worthy of mention were purchased from the county and have not had their VBR status removed by the requisite one-year deadline. Hopefully the county is taking them back from inattentive or predatory owners.
Twelve properties are more than one year behind on taxes, and could immediately fall into an accelerated tax forfeiture - in fact, those twelve should have already had such attention. An additional nine are 6 - 12 months behind and could be swiftly added to the roll if the delinquency continues.
In the Jordan neighborhood, the numbers are even more stark. There are thirty-three properties on the MLS and ninety-one on the VBR list. Housing committee members and other volunteers have canvassed the community extensively, and we have identified a total of one hundred fifty-seven structures that appear to be vacant. There is a plethora of data to go with that, which I haven't had the time to sift through. But it's a reasonable conclusion that we'll find some homes in the rehab stream already, and quite a few in VBR purgatory.
We are moving out of a housing crisis and into a housing recovery. Buyers are eagerly looking for homes, and not finding enough. The private market is poised to play a much larger--and healthier--role in north Minneapolis than it has in a long time. Our city and county should have been collaborating with each other to put our community in a position to benefit from these current trends, but they have not done enough in that regard.
Let's get moving; it's better late than never.
The problem I have heard from brokers is that it's hard to get appraisers to get the values up so that deals can close!
ReplyDeleteThe real issue isn't the appraisers. We shouldn't be trying to "get appraisers to get the values up." As long as they are following the processes of their profession, the values are what they are. The real issues with our vacant properties are that there are large amounts of back taxes and assessments against them. These need to be waived for VBR (Vacant Boarded Registry) properties if someone enters into a restoration agreement. The way things work currently is that these large amounts discourage investment. And then we knock down the buildings and don't collect them anyway. And are left with even more vacant lots that don't contribute to our tax rolls, require maintenance, and heavy public subsidy to reconstruct upon the parcel. Make a "dollar house" program available to well vetted rehabbers. We could be done with this crisis and this blight if would do just that.
ReplyDeleteThis sounds like the Nicole Curtis subsidy plan.
DeleteAmen!
DeleteHow many tax dollars do we invest in trying to recoup these loses?
However, since the community (all Communities) are already saturated with non-homestead investment properties, it is important that we stipulate that any $1 home program be for owner occupancy. (See next post for example.)
Even if it were a Nicole Curtis subsidy plan, I'd rather subsidize quality rehab and resale to owner-occupants instead of demolitions.
DeleteNicole Curtis only sells properties to owner occupants. That said, I would love it if owner occupants themselves took on the rehab - not all are able or willing, but if they do, hats off to them! We have enough vacant properties that I don't care who fixes them up as long as the work is good and the house ends up owner occupied in the end.
DeleteI do not think it is fair for the State/County/City to collude to accelerate the time line of tax forfeiture of property for some and not for others. Particularly when the so-called "targeted areas" of such acceleration are where poor people reside, own homes, and may borrow against their tax bill to save their home if they cannot borrow elsewhere. I will explain if need be but unequal protection under the law is the clearest objection.
ReplyDeleteKeith Reitman
Oh, that's rich, coming from the guy whose business model is essentially "buy, do nothing, wait for the neighborhood to improve, and sell the last remaining blight at inflated prices." By the time the tax delinquency is accelerated, the property's been abandoned a year or more. It's not anyone's home at that point.
DeleteI'd like to hear more about how you borrow against a tax bill.
Thanks for taking the cheap, and false shot and providing me with the best laugh today. And coming from the guy that walked away from his home mortgage; you! I guess that is your business model? And then walked into a government subsidized 8-ways hand-out house. You can put quotation marks around anything you want to; it's your blog. That does not make it true. Finally, you did not address my point: unequal protection under the law for poor people who may often have to make a choice between food on the table and paying the property tax bill or going to the "pay day loan company". And you filter free speech so this will not see the filtered light of your blog. Betcha a dollar!!
ReplyDeleteKeith Reitman
HEY COWARD
ReplyDeleteKEITH REITMAN
Let's put some numbers to this.
ReplyDeleteMinneapolis's "Green Homes North" initiative is subsidized at about $60K per structure and it costs around $20 to demo the existing building and clear the land. So thats about a $80K investment into each home. The prior back taxes and assessments are forgiven.
There are a little over 600 vacant lots on the Northside and around 650 Vacant Boarded Homes. So that is roughly 1250 potential construction candidates.
This means in order for our local Government to reclaim all the demoed homes under the "Green" initiative it would cost $100,000.000 dollars in tax payer subsidies alone and another huge (and risky) investment of developer funding (This is the reason why non-profits using grants and volunteer labor have been the predominate force behind this initiative).
The current average sale price of a Jordan Home was around $44K. At this cost the average listing period was 33 days. (Keep in mind that many of these better properties were swept up by cash investors and non-profits during the 10 day first look period.)
So, at what point do we subsidize enough new homes to force up property values enough to catch up with knocking down existing buildings?
Wouldn't it make more sense for the City/County to stop trying to gouge potential developers for back taxes and assessments on existing homes (created in a failed effort to control bad licensing practices of non-homestead investment) and work together with private developers to rehab these structures for owner occupancy?
Hello You Lilly Livered and ignorant asshole,
ReplyDeleteI spent more than $500,000 of my own money rehabbing just 2 of my buildings within one block of your hovel. I still own them. And no subsidy like you, asshole. This, before the tornado. You have as much correct knowledge in your head as Christian sentiment in your soul; zero. You are a jerk and a doof. Again you are an ignorant asshole but you wrote your own subsidized ticket to 26th and Penn; so cheers.
Put that in your miserable blog you coward-
Keith Reitman
Where's the proof for this mighty renovation? The only properties I can recall adjacent to that block were two absolutely atrocious excuses for rental properties owned and bungled by yourself, Keith.
DeleteMr. Reitman,
ReplyDeleteYou haven't explained "equal protection," nor have you explained how to borrow against a tax lien. Instead, you became increasingly shrill. Which, I admit, was fun to watch. But unless your future posts are substantive without personal accusations, I don't see a reason to publish them.
I will respond to one item though: the down payment assistance I used to buy my home. I got $10,000 from Minneapolis Advantage (funds are still available, contact GMHC) and another $7,500 from Jordan (contact NHS). I would have bought a house somewhere regardless. But this assistance swayed me to buy this house in this neighborhood. I have a four-bedroom, two bathroom 1917 bungalow with original hardwood floors and built-ins, and my total PITI is as much as renting a room costs.
So if anyone out there is reading this, come and buy a home in Jordan while the prices are low and the assistance is high.
I am glad you enjoyed my comments, you delayed posting them but ultimately you followed through. You have promoted free speech and surprised me. OK, I owe you a dollar. And you earned it, too. It could be the first non-profit dollar you earned in a long time. You also earned my respect, this time and in this matter only, for including my comments. Not that you will be likely framing that prize and mounting it over the fireplace you don't have. By the way you still have falsely speculated (hence lied?)about me in past blog postings. Accuracy is not your priority.
ReplyDeleteAs to your "queries": "Equal protection" means the same timeline for tax forfeiture in the hood as by the lakes; fairness. And no, one would not borrow against the "tax lien" directly, at all. Rather, if someone needed to make a choice at property tax payment time between food on the table, paying a vital medical expense, buying motorist insurance so one could commute to a much needed job, keeping the lights on, etc. One could defer the property tax bill, but at an incredibly usurious penalty and interest rate as set forth in state statute. Once that payment is deferred, for whatever reason, no one in the hood should lose his/her house faster than someone by the lakes. That is "equal protection".
And I am Keith Reitman
Can we see some photos of this half-million dollar renovation, Keith??
ReplyDelete