|5-A – 5-F
DEPARTMENT OF HOUSING AND COMMUNITY DEVELOPMENT:
OVERHAUL THE PROCESS OF PROPERTY ACQUISITION AND DISPOSITION
– While the city has a database that tracks all property ownership and vacant buildings throughout the city (Real Property database), the accuracy of its content is uncertain. In addition, the database does not include information about properties being acquired, disposed or developed. Finally, the internal HCD/HABC operating system, HABNET, is not linked with the Real Property database. All of this makes it difficult for the agency to develop an accurate, reasonable acquisition/disposition strategy.
– The current backlog of parcels to be acquired by known interested buyers is 400 citywide; the total number of buildings known to be vacant and deteriorated is estimated to be 12,000; and the total number of unoccupied (not yet deteriorated) buildings is estimated at 40,000 (including the 12,000 vacant and deteriorated buildings).- The City has no proactive strategy for acquiring and disposing of vacant buildings in middle-class neighborhoods.
– The acquisitions function is split among three departments (HCD, Department of Real Estate, City Solicitor’s Office). The three departments are not staffed adequately to address the backlog or ongoing demand of acquisitions and dispositions, nor do they coordinate their procedures to expedite the acquisitions process.
– Goals are not set for the parcels the city should acquire and dispose of annually and staff are not held accountable to performance standards.
– The acquisitions process includes unnecessary steps that slow down the speed at which properties can be acquired.
– Many title companies and appraisers refuse city assignments due to low fees and slow payment, thereby increasing delays in the acquisition process.
– The disposition process is lengthy and complicated and discourages people from attempting to buy city-owned residential and commercial properties. The process currently takes almost a year from receipt of a proposal from a potential buyer to the settlement date.
– No system exists for quickly disposing of small lots that are not part of a greater redevelopment strategy.
– Eliminate the current 400-unit backlog of properties to be acquired. Address ongoing staff shortage by hiring 5 professional real estate staff (3 in HCD, 2 in the Department of Real Estate) and 2 attorneys in the City Solicitor’s Office. Hire 2 additional real estate staff to handle disposition in HCD.
– Assign one staff person the responsibility of identifying vacant buildings in middle-class neighborhoods and proactively pursuing options for acquisition, rehabilitation and sale.
– Establish annual goals of number of parcels to be acquired and disposed of by the City. The number of parcels acquired should be tied to the demand for these properties. Assign teams of acquisition staff in HCD, Department of Real Estate and City Solicitor’s Office to work together to complete specified volume of acquisitions annually.
– Eliminate routine ordering of a second appraisal of property to be acquired.
– Improve City procurement process for title services by increasing fees for service and ensuring timely payment. Consider hiring in-house title and valuation staff.
– Decrease processing time for dispositions in half, to no more than 6 months, by eliminating the need for HCD to get approval from the Department of Public Works (DPW), the Planning Commission and the City Council when trying to convey a property to a potential buyer.
Estimated Annual Impact:
Estimated Implementation Costs:
Barriers to Implementation:
Estimated Annual Impact – Cost-Benefit Analysis of Recommended Staff Additions
At this time, it is not possible to estimate the capital costs required to develop an interactive database that will handle data collection, evaluation, and mapping.
Estimated Annual Salaries and Related Costs
Current staffing level at HCD (professional staff only): 3
Estimated Property Tax Revenues, Years 2 through 10 (7)
Total revenue to City at end of Year Five: $3.0 million
Net revenue to the City at the end of Year Five: $425,236
(3) Includes salaries of 5 Real Estate level II employees (three for acquisitions and 2 for disposition at HCD, two in Real Estate), each at the maximum level in grade ($37,700 – $46,100 per year) and two contract attorneys at $70,000 per year each.