Spokane City Countil to consider registry for abandoned homes

The windows and doors are boarded with plywood, the siding is fading and falling off and the yard is littered with soggy mattresses. No crystal ball is needed to see that the abandoned fourplex at the corner of North Napa Street and East Fairview Drive has a dim future.

“It’s a health hazard,” said Spokane City Councilwoman Amber Waldref. “It’s a blight on the neighborhood.”

On Monday, the Spokane City Council will consider an ordinance put forth by Waldref that officials say will prevent abandoned homes from collapsing into such states of disrepair. By creating a registry for abandoned homes, Waldref said, banks and mortgage lenders will be held accountable for properties they’ve foreclosed on, keeping them in good condition and protecting neighborhood character.

“It’s really hard to get people to build (new homes) in some neighborhoods in Spokane,” she said. “And if we have to tear down houses, it makes it even harder.”

If passed, the ordinance would require banks or other responsible parties to register all abandoned homes within city limits and provide a local contact to monitor and respond to issues with the property, including graffiti, broken windows, an unkempt lawn and other problems.

The city would require an annual $200 fee for each property and plans to hire a private company to create and maintain the registry. Waldref said many other communities have similar registries, such as Portland; Florida City, Florida; and Newark, New Jersey. She estimates there are up to 300 abandoned properties in the city that would be on the registry.

Banks would be required to register a property within 30 days of its abandonment, according to the ordinance. Failure to register a property would result in a $500 civil fine, which if unpaid would follow the bank and not be placed as a lien on the property. The registry would include properties that are abandoned and under foreclosure, trustee’s sale, tax assessor’s lien sale, deed transfer in lieu of foreclosure or subject to a contract forfeiture.

Corey Oberst, president-elect of the Spokane Mortgage Lenders Association and a loan officer at Inland Northwest Bank, said he supported the registry but worried it wouldn’t go far enough to prevent houses from falling into substandard condition, something he said banks already try to avoid because it devalues the assets.

“On the surface, it sounds like a good idea. A lot of these abandoned houses are a problem for our area,” he said. “I’m glad somebody’s trying to do something, but I think there’s more to it.”

Oberst said the biggest issue is how long it takes a bank to officially take possession of a foreclosed house after its previous owner has left, which he said can take up to two years.

“The process is arduous. It takes a little while to get through it,” he said. “Even if you do it perfect, it takes a little while.”

Waldref said the registry could help prevent this legal limbo, which allows “zombie” properties to degrade with no identifiable owner.

David Eagle, a homeowner in the Chief Garry neighborhood and an associate professor of finance at Eastern Washington University, has seen firsthand how a zombie property can change a neighborhood.

Next door to his East Cataldo Avenue home, a house has been vacant for five years.

The lawn was out of control and Eagle, who is interested in building another unit on his plot of land, said neighbors watched as the entire block was adversely affected by the deteriorating house. Before the city came and boarded it up, squatters “made a mess of it,” Eagle said.

He soon started calling the mortgage-holding bank, but had no luck.

“Even though I bank at Bank of America, I can’t get through their bureaucracy,” he said. “I’m appalled.”

After enough phone calls, Eagle said the bank started tending the lawn, but he said it’s not enough. He’s supportive of the registry but calls it only “a first step.”

“It’s a problem throughout the city, not just my neighborhood,” he said.

According to the Spokane County Auditor’s Office, there were 1,230 properties foreclosed in the county in 2013, 713 in 2012 and 1,146 in 2011. In the past decade, more than 8,700 properties in the county have been foreclosed.

Spokane County commissioners initially raised concerns that the ordinance might require registration of properties seized by the county treasurer because of unpaid property taxes within city limits. The county Engineering Department found 16 such properties, mostly tiny parcels smaller than 300 square feet.

Commissioner Al French said requiring the county to pay the $200 annual fee on these 16 properties would be an inefficient expense of taxpayer dollars.

All three commissioners signed a letter requesting exemption from the ordinance and a waiver of the $3,200 in fees that would need to be paid.

Waldref said the city will find a way to exempt county-owned properties.

She said the rule of thumb is 1 in 5 foreclosed properties is abandoned. If it’s true, there could be 1,700 abandoned properties countywide.

“The reality for me is I just want to see those responsible take responsibility to meet our basic standards in Spokane,” Waldref said. “This has been a loophole but it won’t be anymore.”