Decaying properties pose a problem

Authorities in the US are getting tough on foreclosed properties that are falling into decay and generally degrading areas to such an extent that prices are falling even further.

With 2.2 million homes expected to fall into foreclosure this year there is growing concern that rubbish is piling up, paint peeling, lawns growing wild and areas taking on a derelict appearance.

In some cities the mayor is taking on the responsibility of making the owners - usually the lenders who can't sell the property, either clean them up or pay for them to be sorted out.

Jerry Abramson, mayor of Louisville, Kentucky, was so fed up with the state of several properties owned by one of the largest mortgage lenders in the US that he sent a bill for €27,000 to the senior vice president of Wells Fargo which owns multiple foreclosures in the city.

'Many foreclosed properties will remain empty for months, if not years, while the housing market recovers, potentially becoming objects of blight and targets for vandalism and theft,' said Garry Hanson, a real estate consultant in Florida. 'The problem is that unsightly property has an affect on other properties and can bring down the overall tone of an area where genuine sellers want to get a good price,' he added.

According to estimates from Enterprise Community Partners, a national nonprofit group that assists cities in developing affordable housing programs, some 44.5 million homes sit adjacent to subprime foreclosures in the US. Each home stands to lose $5,000 in value as a result, said Ali Solis, a director.

He said it is a nationwide problem. 'In the next 18 months every single community will be directly impacted by foreclosure and see a significant decrease in property values,' Solis said.

Many cities have property codes but at an administrative level code enforcement directors don't have the phone numbers or the clout to deal with banking officials.

Some municipalities are buying up foreclosed properties to renovate and rent them out as the only way to clean up neighbourhoods.

'Cities are taking steps to act before properties decay. They are also facing rising bills for keeping them clean for which unltimately local taxpayers are footing the bill,' said Robert Klein, of Safeguard Properties, which contracts with lenders for property maintenance services.

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