Abandoned and neglected properties vex virtually every city, creating ugly and sometimes dangerous blight and taking money out of municipal coffers.
Birmingham, Alabama, is working to tackle its vacant property challenge with a new ordinance that will give the city greater discretion in foreclosing on nuisance structures. The City Council passed the ordinance at a public meeting in September. It will go into effect Wednesday.
The ordinance was made possible by a state law in 2024 that allows municipalities to enforce foreclosures on liens. In Birmingham, properties can be targeted for foreclosure if:
- the property has liens from code enforcement or unpaid taxes totaling more than $1,500,
- payment of liens has been delinquent for at least six months; and
- the property has received three nuisance abatements in the past 36 months.
Vacant properties can be harmful to cities on several levels, said Matt Kreis, general counsel for the national nonprofit Center for Community Progress organization. Kreis has worked with cities other than Birmingham to develop and pass similar measures. One city he worked with is Mobile, Alabama. “There is a point at which a piece of property, once it has become vacant or abandoned … becomes harmful,” Kreis said. “Not just to the people who live next door to the property, but to the people that live on that block. And it’s not just a physical danger, although it can be that, but it can also impact the mental health of people there.”
Lots cost cities money
Beyond the potential risks these properties can pose, nuisance lots also directly cost the city money. Unpaid property taxes cut into city budgets while the maintenance costs of mowing overgrown lawns and making other repairs can add up to millions of dollars in expenses.
City council member Valerie Abbott was quoted as estimating the cost to the city for maintaining neglected properties at between $3 million and $4 million annually. Officials with the city did not return multiple requests for comment.
Liens also make it harder to redevelop blighted properties, according to Kreis. “The amount of public debt begins to add up and make it less and less attractive for anyone to want to step in and do anything,” he said.
Foreclosing on a property allows debts attached to it to be satisfied, either through sale at public auction or from being transferred to the Birmingham Land Bank Authority. The authority has several programs to encourage redevelopment at low costs.
The land bank's job "is to manage that inventory and figure out who out there can do something with this,” Kreis said.
Kreis said that cities should consider foreclosure only as a last resort. “Up to the point where that property isn’t a harm, we want to do everything we can to help that owner fix it,” he said.
The question Kreis asks when a property cannot be restored by the owner is, “'Why did that property get stuck that way?' The market plays a huge factor in that."
Displacement is a risk
Whether it was because the cost of repairs exceeded a property's value or because owners passed away, Kreis said the answer to why a home has been abandoned often comes down to a policy issue.
Kreis said his organization helps communities remove legal and policy barriers to redevelopment. “If we do that strategically, we can start to move the market back to where people are going to want to repair that home or rebuild in that neighborhood,” he said.
One of the dangers of an aggressive foreclosure program is displacement.
At the meeting where they adopted the foreclosure ordinance, city officials stressed it would only apply to non-owner-occupied buildings and that they would be targeting repeat offenders.
“I don’t think you should ever use this tool if the house is legally occupied,” Kreis said.
However, he said that cities should not shy away from taking over nuisance properties to improve their communities.
“You already have the problem,” Kreis said. “You might as well own it.”