SB Council Orders Full Tilt Press On Receivership Program

Having achieved a small measure of success with a receivership program that eradicates blighted property by commandeering dilapidated houses from their owners, the city of San Bernardino is looking toward a stepped-up employment of the strategy intended to transform an estimated 4,000 ramshackle abodes into respectable and livable dwellings that will cease driving down the value of neighboring properties.
Deputy city attorney Jason Ewert this week briefed the mayor, council and public on the details of how the city’s receivership program had been applied against a property that had fallen into significant disrepair as the background for a request for an appropriation of $198,904.57 to establish an advanced code enforcement officer position in the community development department and add the position of administrative analyst/assistant of elective officer to the city attorney’s office, both of which are intended to support the city’s receivership program.
Ewert said the use of receiverships to redress the city’s blight problem has been formulated as a last resort, after property owners have been contacted, warned and cited repeatedly about redressing conditions on the land and/or structures they own, at which point a receiver is appointed.
Ewert said the process results in the property being declared blighted and then being entrusted to a receiver who undertakes to rehabilitate the property. Though legal title is not transferred to the receiver, he or she is granted possession and control of the property to undertake the repairs. Legal title is transferred after the property is sold to a new owner after the property is declared as reclaimed.
Ewert referenced the case of a property at 2942 Bangor Ave., which the city undertook as a pilot effort last fall and sold on June 18 for $282,000.
According to Ewert, the city paid the receiver $46,853, spent $134,883.38 toward repairs of the property, had staff costs of $34,583.44, had other costs, including costs of sale and the paying of delinquent property tax, in the amount of $19,948.57, and paid the prior owner of the home a total of $27,180.88.
Members of the city council were enthusiastic about the program.
“I would like to see a significant ramping up of this program, if possible,” Councilman Henry Nickel said. “We need to look at very aggressively moving forward on this program. I’m not talking about dozens. I’m talking about many, many more.”
To his inquiry as to how many disheveled homes in the city would qualify for the program, Ewert indicated that were many but did not offer an exact number. City manager Allen Parker ventured the number 4,000, contrasting it with 40,000 in the city of Detroit. Detroit, like San Bernardino did in 2012, filed for bankruptcy protection.
Nickel said that with respect to houses in squalor he wanted “optimal enforcement. “We need to be moving aggressively on this and quickly. I’ve been through a number of neighborhoods over the last couple of weeks. We have blighted properties and we have good homeowners that are saying we are simply tired of having to deal with degraded properties that are bringing down our property values and endangering our families. We need to take a stand and begin moving forward on this program.”
Councilman John Valdivia said that the program should be expanded and privatized. “If there are in fact 4,000 homes, why not knock on Wall Street’s door?” Valdivia asked. “Who is to say we cannot put a request for proposal or request for qualifications out for a national organization to come out, privately-funded, no-strings-attached from government but let the private industry [do this]. I feel that private industry has great potential here. Certainly there initiative is to make money. If we can wash out government of getting involved and mired and mucked up here, I think there might be an opportunity for our city. Private industry has the ability, the capital, to move forward with private industry money unencumbered by government. I think this is a prime opportunity for our economic development department here. If we go larger, it is attractive for private brokers and Wall Street to get involved where we certainly have the guardrails of government but we are protected by the buoyancy of private industry giving the necessary capital to get this done.”
Nickel called for the program to be pursued with vigor sufficient “to take a significant bite out of the 4,000 properties identified as eligible for this program.” He said he wanted “full cooperation of staff, the community development department and the city attorney’s office. I want this to be multi-departmental. I want to nurture a culture of collaboration between departments.”
Community development director Mark Persico offered Nickel his assurance “This will remain as a joint program.”
Parker sized the program up as “fairly complex. But it but can be done,” he said.
“We concur completely that this program ought to be ramped up,” said city attorney Gary Saenz. “We would expect to see increased numbers. Our current goals are to go up to four a month We expect to be doing fifty a year There is certainly no reason we cannot do more numbers based upon” the success the city had already achieved with the pilot program. “We would be happy to bring back to the council an assessment of what additional resources can be utilized to increase those numbers even greater,” Saenz said.
Two city residents, however, were less sanguine about the program.
“Government should not go into the business of flipping houses,” said Deanna Adams.
Jay Lindberg objected to the aggressive use of the program. “Some of these units are probably multi-family units,” Lindberg said. “You’re probably talking about ten to fifteen percent of the population of this city. When you run into people with serious health care issues, what are you going to do? Just kick them out on the streets? I’m looking at those costs up there and you can practically tear down the place and build a brand new one for 134,000 bucks. It looks like it was structurally sound. It was a mess.
“Some of you might have parents that are still around,” Lindberg continued. “Think of what their places looked like shortly before they passed. Some of them look a lot worse than what they we’re talking about. My mom’s 83 and I have to help her keep the place up. Don’t just assume ‘Let’s kick the poor out on the streets… Yeah, that’ll work.’ Where are you going to put these people? You’re talking about at least 20,000 people living in this and most of them probably do have, if they are living like this, health care problems. I’m sure hitting a lot of these homes is a really good idea. It is probably a great idea, but don’t put on your swastikas and start acting like Nazis here. You know what they did to old and feeble people in Germany? They sent them off and gassed them. It’s like 20,000 people. What are you going to do with those folks? Can’t you show just a little humanity here? Not just, ‘We have to clean up this city. Punish the poor. They deserve it. They’re poor.’ One of these days all of you are going to be senile and you’re going to be doing a lot of stupid stuff in your houses and that stupid stuff would put you right in their crosshairs. Be careful about just kicking these people to the curb, because they are senior citizens.”
Neither Adams’ nor Lindberg’s comments, however, dimmed the council’s enthusiasm for the project and they approved creating the two new positions to facilitate it.
Ewert said, “Code enforcement did a great job identifying properties. I will definitely look at ramping the program up further and explore how we can do more.”
He said the city could possibly increase the number of homes submitted to the receivership process because he had already recruited two firms willing to act as receivers on a deferred billing basis.

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