Dead House Walking

Posted by Andrew Macurak on November 17, 2008

A few months back I wrote about two pieces of vacant property legislation making their way through the Pennsylvania General Assembly. I’m happy to report today that one of these bills has passed, with exciting implications for the commonwealth’s dozens of smaller, postindustrial cities, as well as its two major urban centers.

The Housing Alliance of Pennsylvania reports that the new conservatorship (nee receivership) statute will give municipalities and community development corporations the ability to take temporary control over abandoned properties, make improvements to them, and then attach liens to those properties for the cost of improvements.

According to HAP, the state Treasury and Federal Reserve Branch worked to mitigate the concerns of the banking industry, which initially objected to conservators’ liens taking priority over bank liens. Through its overcoming these objections, the passage of this bill shows that urban revitalization can be beneficial to all parties involved:

Let’s consider a theoretical house that has been abandoned for 15 years and is encumbered by liens stemming from an unpaid mortgage. (Granted, in Pennsylvania, liens are even placed for owners’ unpaid child support—effectively punishing the property for the sins of the owner, and possibly exacerbating a community’s vacancy problem – but that’s another story.) Having been scavenged for all its valuable materials—copper plumbing, aluminum siding—the house has little chance of selling to anyone but the odd “fixer-upper” type of urban homesteader. If a qualified conservator were to make improvements to that property, the house would have a much better chance of being sold – and a sale must satisfy all liens before title can be transferred. Mortgage banks’ last, best hope to recoup their investments in these downtrodden properties is through their revitalization.

Conservatorship isn’t the only instance of successful collaboration between community interests, government, and private industry toward community betterment. The relationship between community housing development corporations and utilities companies historically has also been robust, since urban infill brings utilities companies more customers in areas where they’re already maintaining infrastructure. Pennsylvania’s new conservatorship statute is, however, a timely and pointed fulfillment of the Brookings Institution’s imperative for higher levels of government (in this case, the state) to act in support of metropolitan areas.

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