Local Administration Adversely Affected By Foreclosures

Posted in Foreclosures, November 8th, 2007 |

The house owners are not the only ones hit by the foreclosure but the city fathers are losing time as well as money as they are being forced to grapple with the problem.

The landlord of a duplex unit in Minneapolis owes the municipality $117 as water dues. If it is not paid then the water supply will be cut off. The landlord will not be interested in paying dues while the foreclosure matter is pending. Meanwhile the municipality will have to do without the money or try to ease it on to other users.

The police too are in a fix. They are spending far too much time hounding people out of foreclosed houses, looking into overgrown lawns and piled up snow. The force is just not prepared for this type of task taking into consideration the sheer increasing numbers of foreclosures.

It is happening everywhere and not just Minneapolis. In New Prague the city authorities are confused about keeping a pump running in a small pocket of foreclosed units in one sub division. If the pumps are silenced then water related damages would show up making it more difficult to sell. If they are not sold and a new landlord is not found then who will pay the taxes?

Minnesota cities have formed an organization to locate the owners of foreclosed units. It is a difficult uphill task because these mortgages have been sold and resold amongst lenders and investors leading to complete chaos. Meanwhile while as the owners remain untraced the city fathers have spent $1 million in Minneapolis to board up deserted houses. The property can be assessed but when will it be paid? May be years! It is proving to be difficult to even realize the costs for boarding up houses.
The vacant house do not use water, sewerage and garbage services. This means that the costs of services existing have to spread out among less number of people across the city.

Minneapolis has lost 2,400 garbage users since 2003, which means $1.4 million garbage fees. It all coincides with the timing of rising foreclosures. For others the garbage rate will go up. Collections made from water and sewer connections are less by $1.1 million. It is the people who comprise the wealth of a community and not bricks and mortar. But the people have gone. The houses are vacant.