Portland forecloses on the first of many “zombie houses”

The abandoned house at 8515-8517 N. Portsmouth Ave. has sparked complaints from neighbors for 24 years. Its owner has violated multiple city codes over the past five years and racked up more than $66,000 in liens. But its days as a nuisance are coming to an end.

Last week, the Portland City Council unanimously voted to start foreclosing on five abandoned homes and approved new codes to make it easier to force sales of homes with mounting unpaid liens. The five that made the cut were considered “the worst of the worst” of the city’s more than 400 abandoned homes, says Sarah Landis, the chief deputy city auditor.

Along with the Portsmouth house, the city plans to foreclose on homes at 4112-4118 S.E. 91st Ave., 15803 S.E. Powell Blvd., 7101 N.E. Prescott St. and 9120 N. Tioga St.

All five are part of the Bureau of Development Services’ Extremely Distressed Properties Enforcement Program. Together, these five properties carry a total of 37 liens worth $378,291, Landis says. Much of that owed money is the result of unpaid nuisance violations.

The code changes should help the city get a handle on a longstanding problem that has distressed neighbors and confounded city officials for years. Many owners are neglecting their homes, attracting squatters and other illegal activities, at a time when Portland faces a severe housing shortage. By using its powers of foreclosure, the city can sell the homes, earning funds to pay off unpaid liens and get the homes back into productive use.

“The foreclosure process will not be a quick fix nor will it be appropriate for every blighted property with delinquent liens,” Landis says.

However, it’s a start. The city has been reluctant to use the foreclosure process since the last foreclosure was bungled in 1965.

“It’s an outrage that houses are unoccupied and falling apart in a city where the housing prices went up faster than anywhere in the country last year — 11 percent — and where people are desperate to find housing,” says Portland Mayor Charlie Hales.

Until now, city code allowed the property to be sold for no more than the total of liens and collection costs. That means a property potentially would sell for a tiny fraction of its value, Landis says. The new code allows the city to sell the home for its true market value.

A second code change will allow the city treasurer to recoup city costs of conducting the sale.

In order for a property to have these new laws applied, it will have to be vacant, abandoned and have a long list of violations and unresponsive owners, Hales says.

The City Auditor’s Office will select the homes for foreclosure. The list is then approved by the City Council and given to the city treasurer to start conducting a foreclosure sale.

Even after the foreclosure process has begun, property owners will have a grace period in which they can pay off their liens and reclaim their properties.

“We want the property owners to get the message and fix them before we foreclose,” Hales says.

The entire article can be found HERE on the Portland Tribune’s website.