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Win/Win: St. Pete Program Builds Homes, Boosts Revenue

An aggressive attitude and foreclosure threat against zombie homes’ owners have opened up land for building/rehab – or it’s fed city coffers if owners pay their tax debt.

ST. PETERSBURG, Fla. – St. Petersburg’s code enforcement director, James Corbett, has started using foreclosures, or the threat of foreclosure, as a tool to clean up the city.

Corbett says the program evolved organically after he focused on the problem with dilapidated, unoccupied homes – the city had 830 in 2014 – and slowly developed into an actual program. While St. Petersburg is thought to be the first city to try it, Largo, which is just north of St. Petersburg, has also made moves to use the process, as has Bradenton.

Cleaning up St. Petersburg

The process developed under Corbett expanded step-by-step but generally followed a pattern, outlined in an article, “St. Petersburg is transforming vacant lots into affordable housing” on tampabay.com:

  1. Create an inventory of all the boarded-up, vacant homes. Corbett found 830 in St. Petersburg that “needed major repairs or had deteriorated so much that they needed to be demolished.”
  1. Crack down on property owners. With the list of homes in hand, St. Petersburg’s mayor at the time, Rick Kriseman, ordered city employees to demolish (more than 100) homes and repair ones worth saving (62 homes).
  1. Don’t use the “file and forget” system. Once homes were razed, a vacant lot remained – but it was still owned by a person or company that often had tax debt or unpaid code violations. Many cities “file and forget” those debts and, over time, that debt grows larger. Corbett told the Tampa Bay Times that city costs increased over time because “we’d have to mow the grass twice a month religiously” and take other safety precautions. The work would also increase after a major storm.
  1. Be aggressive using foreclosure as a tool. In many cases, Corbett says the value of the blighted houses or land was less than the amount absent owners owed in taxes and fines. And he says most of the homes were corporate owned rather than individual investors. One company owned about 60 homes, and he said its foreclosure response was “like waking a bear.” While the process took “a lot of data,” it eventually worked, however.
  1. Sell some lots to first-time homebuyers. St. Petersburg gave one lot to Habitat for Humanity, which built a 1,300-square foot home. A single mother with two children bought it for $210,000.

Benefits for St. Petersburg

The Tampa Bay Times says the city spent $1.3 million in legal fees for the program to succeed – but it collected $4.4 million in unpaid fines. Not all owners of zombie properties wanted to go through foreclosure; as a result, they paid past due amounts to keep the property.

According to St. Petersburg foreclosure attorney Matt Weidner, “in the vast majority of cases,” people say, “Great, get this property off my hands. … If it’s in your name and you don’t want anything to do with it, it’s a liability.” He says the foreclosure process takes about six months – far less than trying to take property via eminent domain.

Beyond money, St. Petersburg also has fewer blighted properties.

St. Petersburg program by the numbers

  • 830 – Derelict homes in 2014
  • 110 – Derelict homes now
  • $1.3 million – St. Petersburg attorney foreclosure fees
  • $4.4 million – Unpaid fines collected
  • 635 – Foreclosure proceedings so far
  • 235 – Foreclosed homes sold
  • 330 – Lien repayment or settlement agreements reached
  • 70 – Homes currently in foreclosure

Most owners are “literally a large company that doesn’t care anything about this city, and one of two things will happen: They’ll either pay their liens, or their properties will be sold and someone else will get them,” Corbett says.

Source: Tampa Bay Times, April 7, 2022, Amy Martinez

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