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Boston Globe: AG’s program helps towns clean up derelict buildings

12.21.2015

AG’s program helps towns clean up derelict buildings

As a building official in Franklin, Gus Brown could never figure out how to clean up a handful of abandoned, run-down homes that plagued several of the town’s neighborhoods for years.

Everything changed, though, when he decided in May to place his town in the state attorney general’s Abandoned Housing Initiative. Jason Piques, a lawyer in the AG’s office, sent warning letters to the property owners, and within a month things started to happen.

“To date, there are ongoing cleanups and repairs on these houses and no complaints from the neighbors [anymore],” said Brown, Franklin’s building commissioner. “That letter from him seems to have wonderful results without even getting into any of the legal proceedings.”

Other towns are noticing results, as well. The number of municipalities in the program has surged in the past year by more 40 percent, with Franklin and 23 others joining in 2015. About 340 properties in those communities have been identified.

Here’s how the program works:

Once a community has signed up, local officials identify vacant homes that need attention. Lawyers with the attorney general’s office can then seek court approval to put a property into receivership to ensure that it’s cleaned up, with the hopes that it will then be sold and therefore end up back on the local tax rolls.

But the threat of going through that legal process is usually enough to persuade delinquent homeowners — or the banks that may have seized the homes — to restore the houses.

Municipal officials have long had the ability to get properties cleaned up through tax foreclosures, but they don’t often have the resources or the time to enter what can be a protracted legal process. The attorney general’s initiative takes much of the work out of their hands, while adding the firepower of a big state agency.

That agency attributes much of the recent surge in interest to word of mouth — municipal officials talking to each other about how the program has helped.

More cities and towns are also noticing the lingering impact of the foreclosure crisis from the Great Recession: the loss of property taxes, the blight caused by dilapidated homes, and the criminal activities that sometimes follow.

“We’ve made more efforts to get the word out about this, as a resource and an opportunity,” Attorney General Maura Healey said. “Some of the places are starting to see the success and are taking more advantage of it.”

If a lawyer with Healey’s office succeeds in putting a home into receivership, a receiver can complete the needed repairs. The costs can be recovered by placing a lien on the home, which can be paid off when the house is sold, often at an auction.

“An abandoned property is going to reduce the property values in the surrounding neighborhood, [and] in areas where we see whole blocks of foreclosures and abandoned homes, the problem is magnified,” Healey said.

The receivers could be contractors or small nonprofits without equity in the homes, often making it tough to finance the repairs. The attorney general’s office has a pot of money that gets divvied up in the form of small grants and loans for receivers.

In 2013, the agency unveiled an initial $2 million in grants, funded with money from a nationwide settlement with big lenders over improper foreclosures. The attorney general’s office expects to announce another $2.5 million this month.

The financial assistance is enough for the nonprofit Chelsea Restoration Corporation to directly repair four homes in a year, as opposed to two, said Helen Zucco, its director.

In the Town of Franklin’s case, Gus Brown’s involvement helped encourage other municipalities to join the state program.

Brown hosted a presentation about the initiative in the spring that drew building officials from nearby communities. At least two of them, Needham and Walpole, now participate in the Abandoned Housing Initiative, as well.

Brown said he’s still trying to deal with a couple of problematic homes in Franklin, but he seemed optimistic that they’ll be fixed, now that he has the state’s legal support.

“I can’t say enough about this program,” Brown said. “It really takes a burden off of what we do.”

Jon Chesto can be reached at jon.chesto@globe.com. Follow him on Twitter @jonchesto.
 

This article appeared in The Boston Globe on December 21, 2015.

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