North Side auction puts families in vacant homes

It was an auction for amateurs.

People hoping to find a new home in north Minneapolis vied for properties Friday without having to compete with the high-stakes investors who often dominate similar Hennepin County auctions.

The event — which drew about 40 people — was a county experiment to give prospective homeowners a better chance to pick up the vacant homes that fall into government hands after owners stop paying taxes.

Bidders on the seven houses, in the Jordan and Hawthorne neighborhoods, agreed to repair the properties and live in them for at least three years. Some hope it will encourage more investment and involvement in the city's hardest-hit neighborhoods, in contrast to owners who simply rent out the properties.

"This … is better because then you know homeowners get to live there and just people who [will have] a good impact in the community," said Itzayana Amigon, who successfully encouraged her sister to buy a property on 3rd Avenue N., near where she lives.

The auction is part of a larger city and county effort to rethink how vacant and boarded homes in some of the city's most economically depressed areas are returned to the tax rolls. The county recently filed several test lawsuits to expedite the normally lengthy redemption process on a number of vacant and problematic houses not paying taxes. Officials also put new restrictions on buyers at the traditional tax-forfeited property auction this May.

"We're trying to be innovative. We know what works, what's tried and true," said Mark Chapin, the county's director of resident and real estate services. "We're trying to push the edges a little bit and see whether some of these other kinds of efforts will bear more fruit for the residents."

A wider range of buyers

Minneapolis officials, who pull some tax-forfeited homes away from the county's auction process, held new public events this winter to woo a wider range of buyers for their properties on the North Side. Offers are now pending on 12 of those 22 houses, while another six have already sold or are nearly sold to buyers new to the city's process.

"It does mark a shift," city spokesman Matt Lindstrom wrote in an e-mail Friday. "Previously most of the sales were through one of our subsidy programs to developers."

Big money won the day at the county's spring auction: one rehabber grabbed seven houses and two pieces of land for $405,000. Friday's houses, by comparison, each garnered a different buyer, who paid between $7,000 and $31,000 for the houses. That's before substantial rehab costs and possible city assessments.

"My plan is fixing it up. I rent right now," said Kurt Daniels, who bought a home on Ilion Avenue for $15,000. A contractor estimate of all the repair costs — excluding electrical, plumbing or heating — added up to about $71,000.

Robert Laliberte, who did not bid, said the auction eliminated the normal "dogfight that exists between someone who's nonexperienced, noneducated in these areas [going] up against some of the guys that know the terminology, they know the ins and outs."

Neighborhood activists like Roberta Englund, executive director of the Folwell Neighborhood Association, have closely watched the impact investor purchases have had on North Side neighborhoods.

"[They have] no real commitment to the community beyond their investment," Englund said. "And that's the difference: It is the investment beyond the dollars in the mortgage or the dollars in the purchase."

Joseph Taylor, who arrived too late to bid on the houses he wanted, said investors can be a frustrating influence for people trying to preserve their neighborhoods. "The whole thing is we're trying to keep it family oriented," Taylor said.

Friday's auction was a first for Hennepin County. Ramsey County does not hold special auctions for prospective homeowners, but spokesman John Siqveland said they were looking into the idea.

Counties receive the homes only after a yearslong process giving owners in arrears time to pay the taxes. The number of homes entering forfeiture in the metro area has fallen dramatically following a 2011 recession peak.

Eric Roper • 612-673-1732

Twitter: @StribRoper