banktime.com

Many American cities have made it a goal to move forward with more and more foreclosure demolitions. In Detroit, Michigan, which has arguably the most blighted housing market in America at present, there is a goal to demolish no less than ten thousand structures by the end of next year. To date, some four thousand properties – ninety-five percent of which were residential – have been torn down. The properties often come into the city’s possession by way of either donation, because of delinquent taxes or failure to respond to nuisance-abatement procedures.

Bank of America says that it has identified one hundred homes for possible demolition in Detroit. According to Rick Simon, a spokesman for Bank of America Home Loans, homes designated for demolition are donated to public agencies and “generally would require prohibitive costs to make them habitable.” Usually, he says, these homes are under fifteen thousand dollars in value, are expensive to keep up with or to prepare for possible sale, and are usually located in areas with many vacant properties, creating blight and hurting surrounding property values. The agencies that receive the properties after the demolitions are complete get the task of deciding what will be done with them next. The bank will contribute to the cost of demolition or complete the demolitions before donating the properties, completing the cycle.

Last year, Chicago contracted out the tearing down of five hundred and nine properties, at a cost of twelve million dollars. That comes to just under twenty-four thousand dollars in demolition costs per structure. This year to date, the city has contracted out the demolition of three hundred thirty-five additional buildings at an average cost of just under twenty-three thousand dollars. Things are moving faster in 2012 thanks to some legislation designed to stop properties from stagnating in legal limbo for as long as they have been. A city ordinance was introduced last month to reduce the time it takes for foreclosure to six months, down from the two years now allowed. The goal is to work with banks to pass statewide legislation to speed up the foreclosure process and return the properties to the market.

According to Gus Frangos, the president of the Cuyahoga Land Bank in Cleveland, the state of Ohio has reduced the time it can take to get clear title on a property to just forty-five days. One key change came in the redemption process, which no longer lets a homeowner pay taxes and other costs at the last minute of a foreclosure and take back the property. Frangos said that the redemption process had majorly slowed down what could be done to either rehabilitate or demolish declining properties, with loans and permits delayed. Cuyahoga Land Bank is just two years old, a nonprofit entity that gets funding from penalties and interest paid on delinquent property taxes. It has demolished some five hundred homes, has twice that amount of homes in its inventory, and has disposed of an additional fifteen hundred properties by turning them over to neighbors or churches, or to contractors to rehabilitate. Frangos estimated there are fifteen thousand homes in Ohio’s Cuyahoga County that could be considered for demolition – and that it would be a positive move for the county as a whole, and for the neighborhoods in which these homes reside.