City Passes Foreclosed Properties to Land Bank
Monday, December 2, 2013
By WILX Lorne Fultonberg - Email
You could call it a sign of the times.
A rough economy and struggling housing market has increased the number of foreclosures the City of Lansing has given to the Ingham County Land Bank by five-fold since 2006.
At a city council meeting Monday night, members officially passed on their chance to take ownership of properties passed on at the auction block -- 101 parcels in all.
"In reality, we should be somewhat concerned because these are properties that are not collecting taxes and paying for the services that we're all trying to enjoy," said Carol Wood. "So those less dollars come in have a big impact on city services."
A foreclosure occurs after two years of unpaid taxes or mortgages, Wood said, at which point the properties go to auction. If no one buys them, the city has the option of taking them back, but it must first pay the county for each parcel, something that's not always desirable or affordable.
"Fortunately in this county we have a land bank authority," said Ingham County Treasurer Eric Schertzing. "It's a public entity set up to deal with unwanted tax foreclosed properties that can take them to a better future."
The land bank will add the 101 parcels to the 900-plus it already has. Half will be demolished and the rest will be renovated, Schertzing said.
The properties can't be taxed and the city can't collect on delinquent taxes, but Schertzing says the end result more than makes up for it.
"Quality pays and we're about the quality," he said. "Those blighted properties weigh on all the surrounding properties, so when you remove through demolition that worst property or fix it up, it all of a sudden lifts values up, rather than what has been happening is holding them down."
The process is slow though, Schertzing said, adding he doesn't expect to see a drop in the foreclosure numbers in 2014.
"This is a lagging process," he said. "We hope in 2015 and 2016 that the economy will continue to build and that we will be through the worst of it."
Wood said it would be a "blessing" if the number simply didn't increase in the next year.
She says the solution is more long term: job creation and economic development so people make enough money to pay their taxes and mortgages on time.