Housing

Keeping Houses Occupied

Most of the problems foreclosed properties cause come because they tend to become vacant and stay vacant for a while. Often a homeowner flees at the first notice of a […]

Most of the problems foreclosed properties cause come because they tend to become vacant and stay vacant for a while. Often a homeowner flees at the first notice of a foreclosure filing. If not, they, or their tenants, are almost always evicted at foreclosure.

We all know the litany of what happens then: legal limbo, deferred maintenance, vandalism, increased crime, often demolition. An ugly tale.

In my column for Metroland this week, I argue that it’s habit, and a kneejerk desire to punish those who default on mortgages, that keeps lien-holders from exercising their own best interests in maintaining these assets — by doing whatever they can to keep them occupied.

The idea of letting people stay rankles. It doesn’t punish anyone. At least not enough. The destroyed credit rating, lost equity, and shame of failing at the American Dream are not enough. A defaulting owner must pay the largest possible price for . . . for what? For being pressured, misled, or lied to by a mortgage broker in most cases. For betting wrong on a rising housing market in others. For being fiscally irresponsible in some, sure. Or for losing a job or getting sick at the wrong time. Without a ton research into each case, we don’t know.

There are options — from foreclosure deferrals to allowing owners to stay on as renters to buying distressed loans before foreclosure. More and more, I’m hearing that these are going to be crucial strategies to implement as soon as possible.

Relatedly, one researcher from Detroit recently told me that she thinks nonprofits in these hard-hit weak-market areas need help transitioning to a focus on managing rental property instead of developing for-sale property, and quickly, if they are going to play a role in truly stemming the negative effects of vacant property on these high-foreclosure areas. After all, we’re basically ending up with a glut of for-sale homes, but a continued shortage of affordable rentals.

Thoughts?

Related Articles

  • Illustration of a right hand holding a small red two-dimensional house between thumb and index finger. The hand is dark blue and the arm, shown a bit beyond the wrist, is wearing a white shirt and suit jacket. The background of the image is a city skyline, in lighter shades of the same blue, with puffy clouds above.

    Ownership Matters: Institutional Investors and Corporate Ownership

    May 23, 2024

    Who owns our homes is an absolutely essential part of housing policy, and an even greater part of housing politics.

  • A Black woman in blue flowered dress and dusty pink hijab speaks into several microphones. In foreground, blurry, are news cameras. The woman is part of a large group at a rally, carrying signs promoting rent stabilization and saying "Home to Stay MPLS"

    Affordable Housing Sector Split on Rent Control

    May 21, 2024

    In the Twin Cities, where voters have recently supported rent control, most nonprofit housing developers have stayed silent, and some have openly lined up with the developers and landlords who oppose it.

  • Seven people wearing jackets and caps on a city sidewalk holding signs that say "Listen to UREB," "Save Our Homes," "Negotiate with UREB," or "5,000 Against Displacement." One person is speaking into a microphone. At the curb by the speaker is a van with WRLC painted on the side, for Western Reserve Land Conservancy.

    Nonprofit to Close Mobile Home Community to Build a Park

    May 10, 2024

    Ohio’s largest conservation land trust has been accused of purchasing a manufactured housing community with the very intention of closing it, evicting more than 100 households in the process. But proponents of the park’s closure say the land's failing infrastructure—and the benefit the property will bring to an entire city—is what forced the decision.