Coon Rapids is being asked to consider an ordinance that its creators say would address the broader costs of the foreclosure crisis.
Our Future Minnesota, a group that works for economic equity, will ask the City Council on Tuesday to require banks to pay a larger share of the cost of upkeep for vacant properties that can go untended, fall into disrepair and become magnets for undesirable activity.
The group homed in on Coon Rapids not because the city has experienced foreclosures (439 in 2011). Rather, the group's state director said, it's because Coon Rapids has taken steps to protect neighborhoods and housing -- and some of those are at taxpayer expense.
"What the city is really eating is the cost of having to have this big enforcement mechanism and the administration," said Emma Greenman.
Our Future Minnesota will present a model ordinance for the council to consider. The proposal would set standards for property upkeep, require banks to register vacant properties and to pay a fee for administration and maintenance. It also would sets penalties for lenders that fail to comply.
Coon Rapids Community Development Director Marc Nevinski said the city already is doing much of what the model ordinance recommends.
"We certainly appreciate the intention of where they want to go, and we think maintaining those properties and paying attention to those properties is important," he said.
What's the cost?
Using national figures, Our Future Minnesota estimated that each vacant, foreclosed property costs a city about $19,000 for increased safety inspections, police and fire calls, garbage removal and maintenance. The South St. Paul-based group cited property value hits for foreclosed homes and for those in the surrounding neighborhood.
Coon Rapids officials said Monday that some of the group's numbers didn't match their own. City Manager Matt Fulton also said it's his understanding that the city does recoup most of its costs.
"We abate those costs and assign those costs back" to the property owner, he said, adding that the city treats problem properties the same, whether they are bank-owned, owner-occupied or rental properties.
Vacant properties do get some extra attention, especially to make sure pipes don't freeze in the winter.
As of Monday, city officials had not done a specific analysis to determine how many of the invisible costs of foreclosure are not covered by assessments and fines.
Impact on neighborhoods
Our Future Minnesota also studied the impact of foreclosures on neighborhoods. It cited estimates of a 1 percent drop in home values within an eighth of a mile of a foreclosed property.
Resident Dave Hoaglund was one of the homeowners the group contacted. Hoag- lund, who has lived in Coon Rapids for less than a year, said his search for the home he ultimately bought included several blighted houses on the market "as-is."
"I certainly don't want the value of my home to go down," he said.
Several banks were contacted for comment on the report. In a written statement, Wells Fargo spokeswoman Peggy Gunn said her bank works with local governments, nonprofits and Realtors to move properties toward private ownership as quickly as possible.
She and a representative from Bank of America declined to comment on the model ordinance. Both banks said they work to maintain their own properties to community standards.
Coon Rapids City Council Member Bruce Sanders worked with Our Future Minnesota as it conducted its research. He said he hopes the city will study the report and adopt parts of the model ordinance.
"It may not happen as stated, but there certainly is a need," he said.
Maria Elena Baca • 612-673-4409