DEALING WITH VACANT PROPERTY OWNERS
Dealing with privately-owned vacant properties is both simpler and more complicated than dealing with occupied rental properties. The properties do not have tenants, and the issues are often clearer; at the same time, since the owner is unlikely to have any cash flow from the property, the city’s ability to motivate him or her to reuse it in a productive way may be limited, particularly in weak market areas.
While some owners of vacant property may have knowingly bought them vacant, and may have some strategy to reuse or hold them, many were not vacant when their owners or their owners’ ancestors first acquired them. These owners may have limited or no attachment to the property, and may even be hard or impossible to find. In such situations, the city’s leverage with them will be limited.
At that point, the city must be willing either to take control, or let the building remain in limbo. It is difficult, therefore, to separate out strategies to deal with privately-owned vacant properties from strategies to gain control of vacant properties.
Whatever the city’s overall approach toward its vacant properties, having a vacant property registration ordinance is a critical part of any strategy. It allows the city to both identify owners of vacant properties and hold them to minimum standards of care for their properties .
A city may want to go beyond registration, and create ordinances that can impose penalties for continuing to maintain a vacant property, or incentives for rehabilitating and reusing the property. When trying to design such ordinances, it is critically important to understand the market conditions affecting vacant properties in the community. An ordinance that puts financial pressure on vacant property owners to reuse their properties is likely to be effective in areas where conditions make reuse economically feasible; that is, where the owner can sell or rent the building for more than it costs to rehabilitate or where public funds are offered to make up the difference. In other conditions, such an ordinance may lead to the owner walking away from the building entirely.
A powerful tool cities (and in some cases non-profit entities) have in many but not all states is the ability to do vacant property receivership, to take temporary control of vacant properties in order to rehabilitate them and put them back into use. While in some cases receivership results in the city or a non-profit ultimately taking title, in many cases the property is restored to the owner, or in others, the threat of receivership motivates the owner to restore the property. For that reason, this tool appears under this element.
In the end, all of these tools should be part of a larger strategy. A city that is serious about tackling its vacant property problems should do what it can to get private owners to act responsibly – to maintain and reuse vacant properties – but must recognize that those strategies have their limits. It is important to have the ability and the will to take control of properties when owners are clearly unable or unwilling to act responsibly, by both using acquisition tools such as tax foreclosure or spot blight eminent domain, and by building the capacity in local government or the local non-profit infrastructure to maintain and reuse vacant properties for community benefit.