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State Initiatives

States have considerable latitude to enact legislation, dedicate funds, and take action to address the issue of vacant and foreclosed homes. Ideally, a vacant property will be reoccupied quickly, but in a weak housing market where properties may not be readily absorbed, they need to be properly maintained to remain viable as potential investments.

The following is adapted from the publication, Tackling the Mortgage Crisis: 10 Action Steps for State Government, created by the Metropolitan Studies Program at the Brookings Institution.

How States Can Take Action

  • Ensure responsibility on the part of property owners for proper maintenance
    • Grant themselves or local governments broad authority to enforce stringent codes
    • Allow local officials to take legal action and/or impose financial penalties on owners who neglect their properties
    • Place liens on the property to cover maintenance costs
    • Require servicers to bear the cost of maintaining properties
    • Take control of properties when necessary
  • Remove barriers that prevent properties from being put into the hands of responsible owners quickly. To do this, states need to:
    • Review their laws governing foreclosure and judicial sales to ensure they are efficient and cost-effective
    • Provide assistance to municipalities to remove backlogs in the courts and in sheriff’s offices
    • Enact statutes authorizing expedited tax foreclosure procedures for vacant properties, vesting title to foreclosed properties in the county or municipality
    • Enact statutes permitting “spot blight” eminent domain of vacant properties
  • Regulate the mortgage lending system so that abuses do not lead to further foreclosures and vacant or abandoned properties:
    • Provide adequate resources for overseeing the lending industry
    • Increase penalties for and/or ban abusive lending practices, being careful to differentiate between clearly abusive tactics (such as no-documentation underwriting) and those that are not necessarily abusive, but may be used in an abusive manner (such as adjustable rate mortgages)