CITY OF WOODBURY, MINNESOTA

Office of City Administrator

Council Workshop Letter No. 08-

March 5, 2008

TO:	The Honorable Mayor and Members of the City Council
FROM:	Clinton P. Gridley, City Administrator
SUBJECT:	Foreclosed Properties

SUMMARY

Woodbury currently has 224 properties on the 2007 sheriff’s list that are in some stage of foreclosure.  It is very likely this list will grow in 2008 and beyond. Currently we have no mechanism in place to track these properties, measure their impact on calls for service or the effects on their neighborhoods and nor have pre-identified services that could be of assistance to the property owners or concerned neighbors. We have had calls at some properties that are in foreclosure, and concerns from residents about unoccupied homes.  While we do not have a true measure of how the community is impacted by foreclosures, we do know that some of these houses become problems whether or not they are occupied. Issues include lack of maintenance, city code violations, frozen or burst water pipes, renters with no background or record checks, and abandoned or blighted properties.  This council letter is to discuss the impact of foreclosures and to seek policy direction regarding City practices in this regard.

RECOMMENDATION

Develop a comprehensive strategy that will seek to protect neighborhoods from the negative impacts of foreclosure.  A summary of the proposed procedure is:

1. The city will create and maintain a foreclosure list based on information obtained from Washington County.

2. Staff will contact owners, mortgage companies, builders or other responsible parties about security and maintenance issues.

3. Public Safety will facilitate a “neighborhood watch” to keep homes under observation.

4. Staff will monitor the properties.

5. Staff will take action to secure the houses, perform basic exterior maintenance and shut off water to prevent freezing as needed.

6. Staff will provide information and resources available through the both the city and county HRA.

BUDGET IMPACT

These activities will require a significant time commitment by various City staff; however, additional out-of-pocket or staffing impacts is not known at this time.

PUBLIC PROCESS

This is the first public discussion of this issue.

PROCEDURE

The following are proposed activities regarding properties under foreclosure.  The comprehensive strategy involves several departments and exactly which department is assigned specific tasks is dependant on the circumstances. The Public Safety Department may monitor properties where the main concern is building security or there is a history of police related issues. Code enforcement personnel may monitor properties that have ongoing maintenance issues.  

1. The city will create and maintain a foreclosure list based on information obtained from Washington County. Abandoned new construction projects will be included on the list.

2. Perform a police record check on each property.

3. Properties that have had calls for police service that are criminal in nature or nuisance complaints will be assigned to a police officer for further follow up.

4. Public Safety will facilitate a “neighborhood watch” to help keep homes under observation.

5. A current list of properties, owners, vacancies and issues will be available in squad cars, at roll calls and be a part of the strategy for community oriented policing projects.

6. Staff will monitor the properties and determine the status of occupancy, security and maintenance.

7. Staff will contact owners, mortgage companies, builders or other responsible parties about security and maintenance issues.

8. Staff will take action to secure the houses, perform basic exterior maintenance and shut off water to prevent freezing if needed.

9. Staff will order builders to finish the exterior of unfinished new construction projects.  If the builder is unable to complete work the City should not finish exteriors because of the liability related to water intrusion issues.

10. Staff will develop a resources flier for residents.

11. Staff will refer residents to existing resources by utilizing programs available from Washington County HRA.  Examine ways the Woodbury HRA can work cooperatively with the County so as to complement the County programs and keep Woodbury homes occupied and maintained.

12. Evaluate Woodbury HRA programs with County HRA offerings to see if changes in the city HRA programming are needed to fill any gaps.

Washington County HRA

As noted above, the Washington County and the County HRA have agreed to supply foreclosure information on a more regular basis to cities.  In addition, the County HRA has been working on other programs to assist with foreclosure issues.  

• Foreclosure Counseling Services:    The Washington County HRA has initiated a foreclosure prevention and counseling program.  The HRA has obtained $100,000 in grant funds and has recently hired 2 FTEs for foreclosure counseling/pre-purchase education activities.  The grant funds were provided by the Minnesota Home Ownership Center, with funding from the Minnesota Housing Finance Agency, the St. Paul Foundation and the Bigelow Foundation.  Funds have been awarded for 12 months, and the County is working on having that funding continue through 2009.  The grant agreement requires that 1,050 households be assisted with foreclosure counseling.  Program information, phone numbers, and counseling information will be available shortly. 
• Grant Application:  Pending authorization from the Washington County HRA Board, the HRA will be developing a funding application to the Minnesota Housing Finance Agency for a rehabilitation program and an acquisition/rehabilitation program to stabilize and reinvest in neighborhoods where the physical deterioration of foreclosed homes is posing significant concern.   A 1:1 match of state and local dollars will rate the highest.  If Woodbury is interested in participating in this program we should let the County HRA know, so that it can be included in the grant application which is due later this summer.  Several other communities have expressed interest already.  Once all parties have been identified, a meeting will be scheduled to overview the program concept and to discuss the specifics.
• Three Point Plan:  The Washington County HRA planned to hold a special Board meeting to discuss elements of a broad three point strategy that would provide a framework to address the impacts of the foreclosure issue. In general, the three strategies include:

1. Establishing foreclosure prevention and pre-purchase education activities (including establishment of an "early warning system").

2. Establishing a "clearinghouse" of foreclosure remediation tools, practices/programs.

3. Establishing a pilot program for neighborhood reinvestment and/or stabilization. 

Items #2 and #3 are starting points for a broad framework that the County hopes to improve upon as they move forward.  Partnerships between government jurisdictions, private institutions, non-profit organizations, and others will have to be developed.

Other Activities

Twin Cities Habitat for Humanity and the Two Rivers Community Land Trust have both recently applied to the Minnesota Housing Finance Agency for grant funding to address foreclosure issues.   The grants would allow them to acquire foreclosed properties and rehabilitate them and re-sell them to income qualified families.   The City Council approved resolutions of support for both of these agencies’ request for funding, and offered to provide assistance through the waiver of building permit fees if necessary.

Written By:	Clinton P. Gridley, City Administrator and Janelle Schmitz, Planning and Economic Development Manager
Attachments:	Metro County Foreclosures Chart of Foreclosure Process in Minnesota Mortgage Foreclosure by Advertisement / Action