Vacant & Abandoned Properties Task Force Report City of South Bend Pete Buttigieg, Mayor February 2013 Task Force Members Mayor Pete Buttigieg Co-Chair James Kelly Co-Chair Clinical Professor of Law, University of Notre Dame Community Develpopment Clinic, Notre Dame Clinical Law Center Marco Mariani Karen Ainsley Executive Director, Near Northwest Neighborhood, Inc. Executive Director, South Bend Heritage Foundation Marilyn Gachaw Pam Meyer Community Developer, First Step Properties Director Neighborhood Engagement Mark Gould Department of Community Investment, City of South Bend Assistant Vice-President and Community Relations Officer Pete Mullen 1st Source Bank Auditor, St.Joseph County Mitch Heppenheimer Rafael Morton Deputy County Attorney, St. Joseph County President, St. Joseph County Council Penny Hughes Ann-Carol Nash Realtor/Realestate investor, Hughes Investments Assistant City Attorney, Legal Department, City of South Bend Andrew Kostielney Kathryn Roos President, St. Joseph County Board of Commissioners Deputy Chief of Staff, Office of the Mayor, City of South Bend Anne Mannix Tim Scott President, Neighborhood Development Associates, LLC 1st District Councilmember, City of South Bend Elizabeth Maradik Cathy Toppel Planner, Department of Community Investment, City of South Bend Director, Department of Code Enforcement, City of South Bend Special thanks to: Michael Cwidak-Kusbach Frieda Fein Chrystal O’Connor Malcolm Phelan fig. 1 Newly constructed homes by a private developer on once vacant lots, East Bank Village Table of Contents Introduction Executive Summary Data-Driven Code Enforcement: Decision-Making: Tackling Vacant & Assessing the problem Abandoned Properties Letter of introduction Understanding of past and present History Broad Responsibility Mayor Pete Buttigieg situation Population decline Legal Authority Statement of Purpose Loss of manufacturing Administrative orders & hearings Jim Kelly Focus on elimination of abandoned National housing crisis Demolition of the structure house nuisances Property value reassessment Order to repair the property Current conditions Targeted Code Enforcement efforts Pursue land banking Vacant and abadoned properties Focusing order for repair efforts Location and concentration Prioritizing the demolitions list Develop resources and reuse Focus on abandoned houses The missing pieces options Ownership of abandoned houses Receivership Neighborhood market conditions Land banking Market condition classifications Stablization & maintenance of Market indicators abandoned properties Recommendations Recommendations What the City should do What the City should do What the community can do What the community can do Land Banks & Tax Sales: Resources & Reuse: Planning for the future Appendix Long-term Legislative Solutions Purpose & function of land banks History of resources and reuse Reuse strategies I. Market condition classification Acquisition CDBG/CDBG-R Pocket park indicators Management HOME Side-lot program Disposition NSP1/NSP3 Community garden II. Demolition prioritization form History Community Partners Wildflower & native grass spaces First and second generation Neighborhood Housing Services Large open spaces & linear parks III. Good samaritan law Third generation and beyond South Bend Heritage Foundation Urban forest Tax sales Near Northwest Neighborhood Urban agriculture IV. Federal funding and resource Current tax sale process NNRO Water management allocation breakdowns Commisioners sales Habitat for Humanity Energy generation Need for tax sale reform Housing Assistance Office Housing redevelopment V. Tax sale and Commissioners’ Solutions to tax sale problem Current operations & funding Reuse tools Certificate sale process Redevelopment Strategies Housing counseling Recommendations Renovation or demolition Owner occupied rehab programs What the City should do VI. Definitions Management Rehab & new construction What the community can do Disposition Financing assistance VII. Acronyms Foreclosure prevention Demoltion Funding sources Other strategies Tax recapture Marketing Penalties and interest on taxes Quality of life Federal grants Neighborhood capacity building State-wide legislation Resource strategies 2006 reforms Work with financial institutions Current legislative efforts Self-sustaining programs Recommendations Taxing vacant properties What they City should do Leveraging municipal funds What the community can do Introduction The issue of vacant and abandoned properties has been a major concern for South Bend and cities like us throughout the Midwest. The economic shocks of past decades, combined with population shifts and changes in the housing market, have combined to leave communities like ours with more homes than families can fill, and many teetering on the brink between demolition and rehabilitation. Shortly after taking office, I convened a group of city and county officials, private sector practitioners, and neighborhood advocates to form a working group on this policy challenge. Co-chaired by academic expert Jim Kelly from the Law School of the University of Notre Dame, this group took on the dual challenge of analyzing the dimensions of South Bend’s problem, and assessing the elements of a comprehensive solution. The Task Force met over a dozen times throughout 2012, and held three field hearings to share initial findings and gather input from affected neighborhoods. Based on this work, they were able to create a much more sophisticated view of the dimensions of our abandoned property prob- lem than we have ever had before. Thanks to their work, instead of flying nearly blind, we now have a deep and rich body of data to guide policy decisions going into the future. Even more importantly, the group was able to evaluate a number of short-term and long-term policy approaches to deal with vacant and aban- doned houses. Their recommendations range from small tweaks to the way we already handle problem properties, to wholesale change in state laws governing the ability of municipalities to acquire and dispose of land. There is no magic wand to deal with the issue, and the report’s recommendations are not a cure-all. But the information and recommendations here will guide our administration’s policy and activities as we undertake more proactive and ambitious action to improve our neighborhoods. Over the next five years, we will coordinate internally and externally to address the problems described in this report, using the tools the task force has identified. Change will not come over- night, but citizens will see a difference in our responsiveness and efficiency in dealing with prob- lem properties. n I also made a point of asking that the Task Force identify ways that citizens and private actors o wanting to help address the problem can make a difference, and this report includes information i t on how you can be part of the solution. This is a community problem, and it will be addressed by c u the whole community—government and citizens working together to ensure every neighborhood d is a great place to live. o r t n Pete Buttigieg I Mayor 2 fig. 2 The well-kept homes of River Park Introduction In the decade that I have spent working at the neighborhood, city, and state levels to help older communities confront the problem of vacant and abandoned properties, I have had no experience more fulfilling than serving with Mayor Pete Buttigieg as co-chair of South Bend’s Vacant and Abandoned Properties Task Force. The Mayor recognizes the vital importance of effective strategies to deal with abandoned houses in South Bend’s neighborhoods. The Task Force, in partnership with the City administration, reached out to those most affected by vacant property nui- sances to develop solutions. This report presents those strategies so that the conversation may continue even as the City moves forward to facili- tate the transformation of South Bend’s vacant and abandoned properties. Our work as a Task Force focused on understanding the problem, moving forward on immediate and long-term responses and marshaling the re- sources for helping older neighborhoods overcome the enormous challenge of vacant and abandoned houses and lots. Our report mirrors these four focus areas: Data-Driven Decision-Making, Code Enforcement, Land Banks and Tax Sales, and Resources and Reuse. The working groups that took up each of these areas were guided by three principles. First, good decisions require a full understanding of the rel- evant information. Second, the success of any governmental intervention must be measured by the outcomes achieved more than by the outputs produced. Third, the communities most affected by the problem of vacant and abandoned properties must be engaged in shaping and imple- menting the responses. As one way of moving forward on this last principle, the Task Force supplemented its bi-weekly meetings with three community hearings in three neighborhoods hardest hit by the problems associated with vacant and abandoned properties. The first two, held at Muessel Elementary School and Kennedy Primary Academy, focused on gaining input from community members about not only the problems they saw but also the solu- tions they could contribute. The third forum, held at Riley High School, allowed the Task Force to preview and receive feedback on its initial findings and recommendations. The Report that follows is the work of many hands coordinated and led by the City’s Deputy Chief of Staff Kathryn Roos. The members of the Task Force listed at the front of the Report served not only as deliberators but as workers. The Report would not have been possible without the help of several others, including Michael Cwidak-Kusbach, Malcolm Phelan, Frieda Fein, and Chrystal O’Connor. In addition to helping produce the report, city planner Elizabeth Maradik produced the Neighborhood Market Condition mapping system featured in the Data-Driven Decision- Making section. Although much of what the Task Force has produced amounts to guideposts for future action, this mapping system tool allows the City to make the critical resource decisions that will allow South Bend’s neighborhoods to preserve and renew their vitality. Jim Kelly Co-Chair Vacant and Abandoned Properties Task Force fig. 3 Homes from the turn of the century line Portage Ave. n o i t c u d o r t n I 4 Executive Summary To control the future of the vacant and aban- • Using the proper use of owner, property The City needs to focus Code Enforcement doned properties problem in South Bend, the condition and neighborhood market on what it can do best: Promptly eliminate City needs to understand its past and present. conditions data, the City should cat- abandoned house nuisances. egorize all abandoned houses into three • The vacant and abandoned proper- • Code Enforcement should identify groups, each with its own particular ties problem in South Bend has several which abandoned house nuisances can response or action: causes, including population decline, loss be eliminated promptly through either of manufacturing, the national housing repair order proceedings or demolition. Type of Abandoned City Response crisis, and effects of property value reas- House sessment. • Code Enforcement should aggressively Houses to be Code Enforcement pursue repair orders only: • At the request of the Task Force, the repaired now Order to Repair Against any owner who has the funds City’s Department of Community Invest- Houses that can be Land Bank without to complete repairs and also ment has mapped neighborhood market repaired, but only Demolition On any abandoned house in a conditions to help the Department of later neighborhood with a market strong Code Enforcement focus its enforcement Houses that will not Demolition, then enough to support a rehabilitation and demolition resources. be repaired Land Bank loan on the property. • The City should make the information • The City should develop regular progress relevant to vacant and abandoned prop- reports about its efforts to prevent, re- erties, especially vacant houses, available claim and renew vacant and abandoned to the public through its website. properties and make this information freely available to the public. • The City should continue to evaluate and update not only its data, but also its approach to measuring neighborhood market conditions. fig. 4 The community works to repair homes through Rebuilding Together