CLEVELAND – Northeast Ohio housing experts are keenly aware the aftermath of the housing crisis is far from giving our region a break. In fact, some are predicting the ripple effect, caused by thousand of foreclosures and vacant homes, will have some of its greatest impact in 2012.
Former Cuyahoga County Treasurer Jim Rokakis predicts dropping property values, partly caused by thousands of vacant homes, could put our region into a further economic slide.
“This foreclosure crisis has had an impact that none of us really fully understand,” said Rokakis. “We’re feeling the impact every day. We’re feeling it in vacant properties, we’re feeling it in reduced sale prices and we’re feeling it a destabilized real estate market that seems to have no end.”
Rokakis predicts thousands of homeowners will apply for reduced property taxes, because of dropping home values, during the upcoming tax reassessment in next year. This could mean millions in lost property tax base over the next three years.
“In Montgomery County, in Dayton, there was $2 billion off of their reassessment,” said Rokakis. “That reassessment cost the taxing subdivision $40 million, who knows what the impact will be here.”
Rokakis estimates there are 30,000 condemned northeast Ohio structures that need to be demolished as soon as possible, with few federal dollars to do the job.
Cleveland’s Department of Building and Housing is doing all it can to keep pace in tearing down a growing number of vacant properties.
Building and Housing Director Ed Rybka said his department has taken down more than 5,400 condemned homes since 2008, but admitted another 10, 000 to 12,000 are awaiting demolition.
“This mess has been dumped upon cities across the country, including Cleveland,” said Rybka. “Citizens have every right to demand the problem be taken care of.”
Citizens, like Kivin Bauzo of Cleveland, have been looking for answers to the problems created by vacant homes for the past five years.
Bauzo said he put some $20,000 in upgrades into his home over the past three years; however, a growing number of vacant homes in his neighborhood have caused his property value to slump by the same amount or more.
Bauzo showed NewsChannel5 the nine vacant homes in his block that make up nearly half of the houses in his neighborhood.
“A lot of homeowners are concerned,” said Bauzo. “They can’t sell because of the vacant properties, and they can’t rent because nobody wants to live near these abandoned houses.”
Housing experts said crime, safety hazards,and dropping property values caused by condemned homes aren’t just affecting Cleveland. Vacant homes are having an impact in nearly every northeast Ohio city.
Smaller cities like Elyria, Ashtabula and Canton are feeling the impact caused by a distressed housing stock.
“it’s a growing number,” said Canton Housing Director Fonda Williams. “We have 1,200 to 1,500 houses that need to come down right now.
Housing experts like Williams said problems caused by vacant homes are also being seen in rural neighborhoods, as well.
Perhaps the most dramatic evidence of property value decline was outlined in a study prepared by the Federal Reserve Bank of Cleveland. A startling preview of a study, released exclusively to 5 On Your Side last week, may show the worst from the housing crisis could be on the way.
The study calculated the huge loss in property values by tracking the sale of some 27,000 Cuyahoga County homes in 2010.
Researchers found the 27,000 homes sold carried a county assessed value of $4 billion; however, the actual sale price of these houses may have totaled as little as $2.6 billion.
The report concluded that Cuyahoga County residents who sold their homes in 2010, may have lost as much as $1.4 billion in value.
Cleveland Councilman Tony Brancatelli, whose ward was one of the hardest hit by the housing crisis, said he believes federal funding must be found to take down a growing number of vacant homes.
“We’re seeing the loss of value in real estate at incredible level,” said Brancatelli. “So until we take these toxic assets down, we’re going to see a huge loss of value.”
“We have to raise more demolition dollars, we have to go to our federal government and have them hold the mortgage companies accountable,” said Brancatelli. “We got to stop bailing out the banks, and the mortgage companies, and have them start bailing out our neighborhoods.”
Brancatelli said he believes another solution is to go after the hundreds of irresponsible property owners who have “walked away” from their obligations to distressed homes.
Last week, the city of Cleveland passed two new laws that will re-invigorate its effort in going after irresponsible landowners.
The first law allows the city to go after out-of-state investment companies that have bought up hundreds of properties and aren’t responding to numerous violations and fines.
The second law gives the city the authority to pursue all parties in the chain of title on a condemned home and make them
responsible for all demolition costs.
Currently, it costs Cleveland taxpayers an average of $7,000 for every home taken down within city limits.
Both laws would give Cleveland’s Law Department and Department of Building and Housing more tools to recover the costs incurred by irresponsible vacant property owners.
Sadly, the problem of vacant homes isn’t expected to get better anytime soon. Cleveland Housing Court Judge Ray Pianka said foreclosures in Cuyahoga County are back on the up-swing, with nearly than 1,000 new foreclosures per month.
Judge Pianka another solution to the problems associated with vacant homes is to empower residents by getting them involved in the process of reporting vacant homes.
Cleveland Housing Court Judge Ray Pianka responded to our 5 On Your Side story, setting up a Vacant Property Research Toolkit on the court website. The toolkit is loaded with resources that will help residents step by step in moving vacant homes toward progress.
5 On Your Side Troubleshooter Joe Pagonakis invites viewers to report condemned homes to his Facebook page . Post pictures and information on vacant eyesores in your neighborhood, and 5 On Your Side will contact the proper agencies to get you an update on the status of that condemned home.
Check out this page for an interactive map that points you to the correct person to contact about vacant homes in your community.