The city will soon take over 200 properties through tax foreclosure, but it is unlikely to do much with the houses until next spring.
More than 200 properties could not be foreclosed upon last month because city officials couldn’t locate the owners. So they posted the properties, which requires a longer waiting period.
Next month, that period will be over — and if none of the owners contest it, the city will be given all the properties. But with winter on the way, what will it do with them all?
Corporation Counsel John Polster said the city will offer month-to-month rental agreements to those living in the houses. In some cases, landlords have rented the buildings while not paying taxes. In other cases, owners are living there but did not pay their tax bills for years.
The properties will be inspected and categorized for immediate sale, demolition or renovation. Those living in a house that must be demolished will have to leave at once. They will also have to leave if the house is sold.
But most of the rest can stay — for now.
“If there are no life-safety issues that would cause us to issue a vacate order, we would consider a rental agreement that would allow them to continue,” Polster said.
Contractors will bid on the houses they want to renovate and share any profit with the city after the house is sold. But there are already 50 houses in the renovations category and only about a dozen contractors approved to do the work.
Even if contractors renovate 10 houses a month, the new batch of foreclosures won’t be touched until spring.
So occupants may get to stay in their houses for many months — possibly until next summer, Polster said.
“Once we know when and what we’re going to do with the property, we will ask people to leave,” he said.
“It doesn’t make sense to kick people out now.”
Polster is also negotiating again with American Tax Funding over 200 other properties the city wants to take through foreclosure. ATF is also owed tax money from those properties’ owners, from when the city sold tax liens to ATF and let that agency try to collect. The owners haven’t paid ATF or the city, so both groups have standing to foreclose.
If the city forecloses, ATF loses all the money it is owed. Likewise, the city loses if ATF forecloses. ATF went to court to block the city from quickly foreclosing on those properties last month, and both sides are now negotiating a settlement, Polster said.
That agreement could include a resolution to the problem with nonprofits that were taxed by the city years ago. ATF bought those liens — apparently without the city or ATF realizing they were issued to a tax-exempt property — and has threatened to foreclose if the nonprofits don’t pay up. It has already foreclosed on one, the Hindu Temple.
City officials have offered to let ATF foreclose on some other properties in exchange for giving back the nonprofits’ tax liens.