2:45pm | Amid all the budget hullabaloo last night, the Long Beach City Council also approved an item to create a Foreclosure Ordinance that will impose fines on banks that do not maintain foreclosed residential properties.
The item is an effort to stop the growing trend of foreclosed homes that become blighted and community eyesores. It was proposed by newly-elected Councilmember Steven Neal, and supported by Councilmembers James Johnson and Gerrie Schipske. The item was passed unanimously last night.
The City Manager and City Attorney will now develop the new Foreclosure Ordinance and the Council will vote on it at a later date.
The item stems from fear that continued economic troubles could force many more people out of their homes. This causes a problem because vacant homes pose a fire hazard, attract criminal activity and can hurt a neighborhood’s value. Some estimates say that a foreclosed property can cost the City about $34,000 in increased police and fire attention, weed abatement, building inspections and more.
“We have an opportunity to protect our neighborhoods from the crime, blight and vermin that vacant buildings attract,” Neal said in a recent statement. “If we place responsibility on the banks that own vacant and foreclosed properties, they will think twice about leaving them unmaintained for such a long period of time.”
Under the item recommendation, banks would be required to pay a fee and register their foreclosure upon issuing a notice of default on a foreclosed home, and owners who acquire foreclosed properties will be given 30 days to fix the home before fines are issued. California passed a bill called SB 1137 in 2008 that gives cities the right to create programs like this.
The item notes that several other California cities have created similar plans and benefited quite handsomely. The city of Richmond, which just over 104,000 residents, has issued about $1 million in fines while Chula Vista issued more than $900,000 in fewer than six months of the program’s existence. The cities of Los Angeles and Garden Grove as well as several counties have similar programs.
The item recommends that revenue generated from the registration fees be used to maintain vacant properties, though any money fines could be applied to the General Fund as a revenue generator. However Rex Richardson, 9th District Chief of Staff, told the lbpost.com today that revenue is not the Foreclosure Ordinance’s primary intention.
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