It was four years ago this summer that we first started trying to take stock of the City of St. Paul’s new “vacant building” policy.
Under this policy – passed in the spring of 2008 by the St. Paul City Council, with little fanfare – vacant homes that have been classified as Category II (needs work) or Category III (teardowns) need to be brought up to current building codes to get their certificate of occupancy restored. Which, with a house built in 1920, is going to be $100,000-200,000 worth of work. In Saint Paul, that’s on top of a house that probably got foreclosed with a bubbled-up $200,000+ mortgage which, in a distressed neighborhood like the East Side, the North End or Frogtown, is on a property that sits on a block with several other foreclosures, in a neighborhood with many more, and might go for $50,000 today.
So sales prices have plummeted – median home prices in Saint Paul crashed by nearly half from 2007 to 2011.
And as those prices plummet, the odds of getting a refinance dwindle away to nothing, increasing the likelihood of more foreclosures.
You were warned.
It’s starting to have an effect that the local leftymedia is starting to notice, even if they misattribute its caues. The Daily Planet, a non-profit left-leaning news site, has a report from the East Side:
Active in her church, outdoors often with her home daycare, and prone to taking long walks, Carol Overland is one of those ladies who everybody in the neighborhood knows, or at least recognizes. She’s lived on St. Paul’s East side for 35 years.
In the last three years, she’s noticed something new. “They put up a blue sign or a white sign and it’ll say ‘Notice of Foreclosure,’” she said.
“There’s one house right up here,” she said, pointing. “There’s a house down here. There’s a house on Cottage. There’s two houses going down towards Ivy.”
It’s a piker, of course; one could find blocks around Payne and Maryland where half the houses were vacant, at one point.
A recent report by the interfaith non-profit ISAIAH titled “Lost Homes: How the foreclosure crisis has hit the East Side and North End of St. Paul,” describes the crisis. Members of the organization are pressuring city officials to implement solutions laid out in the report.
We’ll look at the “solutions” in the report tomorrow.
“There’s this silent, selective tornado that’s just touching down and—Bam. Bam. Bam,” said Jonathan Zielske, pastor at Hope Lutheran Church, near Overland’s home. “If it were a real tornado or a real flood, city officials would all rush and try to do something.”
A real tornado or flood is not controllable by humans.
This disaster, on the other hand? It’s got the fingerprints of the Saint Paul City Council, just as surely as those of Bank of America, all over it.
The coalition is pushing hardest for a foreclosure mediation program that would encourage bank representatives and foreclosure candidates to sit down with a third-party mediator and come up with a solution that works for everyone. They argue that mediation could prevent foreclosure for some homeowners and offer a graceful exit for others.
The solution would address charges that banks have pushed homeowners out only to resell homes at prices the original owners could have afforded.
In other words, the banks are “charged” with lending home-owners one amount – say, $200,000 – and then not writing that down to $110,000.
Who’d have thunk it?