At a committee of the whole meeting on Tuesday, council members reviewed an updated list of properties that are in the process of being foreclosed on. According to City Engineer Rich Miller, there are currently 281 houses on the list. Additionally, there are approximately 89 properties identified as vacant lots.
Miller said that so far, the city’s codes department has been able to look at approximately 96 houses and has identified 25 as occupied. He warned the council about the potential liabilities to the city associated with acquiring occupied properties.
“If you become landlords on these houses and something goes wrong, you’re responsible,” said Miller. He added that many of houses had multiple code violations that would now become the city’s responsibility.
“If you don’t fix the code violations and something occurs, you could be in real trouble,” said Miller.
“We need to hire someone as property manager,” said Miller. “I don’t think any of our departments we have right now have the time to go do what needs to be done.”
Council members agreed to seek the advice of the corporation counsel on the matter.
Miller also said that 47 of the properties on the list have been identified as candidates for demolition. He said the cost to demolish these homes would be approximately $2 million.
Alderman Jim Martuscello suggested that revenue from the sale of the properties could be used to fund the demolition.
Controller Matt Agresta said that revenue from the sales would have to offset the outstanding tax bills for the properties first, before any funds could be used for projects.
After the meeting, Agresta said, “The only way we have extra money from an auction would be if we collected more than the total amount of city taxes that were owed, and that is highly unlikely.”
Last year, Agresta reported that the total amount of back taxes and fees for the foreclosed properties was approximately $13 million. Of that amount, $4.2 million is fees and interest, which is not booked as anticipated revenue. City taxes and money paid to reimburse school tax bills account for approximately $7 million. The remainder is county tax.
Agresta said, “The city will have to give a share of [property sale revenue] to the county as there are taxes owed to them as well. Now we don’t make them whole, so it will be a percentage of the revenues that will go to them as an offset to their county receivables.”
Council members agreed that it would be better to sell some properties that are in good condition rather than put them in the auction.
Agresta suggested the city use a real estate agent, however Martuscello disagreed and suggested they offer the properties as a “general listing” which would allow any real estate agent to sell the property.
Council members agreed to come up with recommendations from each of their wards as to which properties should be sold directly rather than through the auction.