When properties are abandoned or neglected due to foreclosures, they can pose a significant threat to community stability, particularly if the properties are vacant. The problems caused by vacant properties range from overgrown lawns and mosquitoes breeding in unmaintained pools to opportunists stripping the homes for scrap metal and other valuable appliances and components, squatters taking up residence and risking fire to get heat or electrical service, and gangs using the properties for illegal activities. (Learn more about the effects of foreclosures on neighborhood crime levels.)
High concentrations of foreclosures may contribute to declines in nearby property values and encourage other residents to leave the neighborhood, potentially sparking a spiral of abandonment and neighborhood decline. (Learn more about the effects of foreclosures on property values.) Communities may be able to address and prevent the harmful spillover effects of foreclosure-related vacancies through policies and programs that help to secure and maintain foreclosed properties.
Many communities already have tools on the books, such as code enforcement, that they can put to use to address the problems caused by foreclosure. Building on these existing tools, communities can help secure and maintain foreclosed properties by expanding code enforcement in areas impacted by foreclosures, taking steps to identify the entities that own or are responsible for foreclosed properties, engaging the assistance of community groups or local officials, and following up on code violations to ensure that the problems are addressed.
Some communities have taken steps to hold lenders or loan servicers responsible for the maintenance and security of properties vacated during the foreclosure process
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Photo credit Robert Schoen, Courtesy of Massachusetts Housing Investment Corporation
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thereby addressing the common problem of vacant properties sitting in limbo before foreclosures are finalized. Nuisance abatement programs can also be effective, whether conducted by the government using a nuisance abatement fund or conducted by a private third party (known as a receiver) through a program often referred to as vacant property receivership where the repair costs become a lien on the property.
Click on the links below to learn about how communities can secure and maintain foreclosed properties:
 Expand monitoring of foreclosed properties and locate owners
Communities can increase code compliance of foreclosed properties by targeting and streamlining code enforcement, facilitating identification of the owners of vacant foreclosed homes, and building partnerships with community groups and local officials for assistance.
 Resolve code violations quickly and effectively to reduce neighborhood decline
Communities can help to restore foreclosed properties to code by preserving curb appeal, increasing the effectiveness of enforcement processes after code violations, creating nuisance abatement funds, and using vacant property receivership for property rehab.
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The Center for Community Progress also provides a wealth of information on restoring vacant and abandoned properties to productive use. Click here to go to their web site.
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Photo credits (top to bottom): Mills of Carthage, Cincinnati, OH -- Courtesy of Potterhill Homes; Elm Brook Homes, Concord, MA -- Courtesy of Urban Land Institute Development Case Studies.
