Free Markets at Work?

Last night around midnight the fire department came to a house on our block to put out a fire...

A mere 18 months ago 157 Dewitt St was a functioning building with several apartments in it, and several tenants living there.  Since that time, the building has been abandoned, left unsecured, and routinely vandalized by neighborhood teens, homeless looking for shelter, and criminals using it as a base for activity.

This, of course, has a negative impact on life on our block.  It creates noise, it's an eyesore, it produces garbage and debris in the street, and is a dangerous playground for children.  It invites criminal activity, and depresses the property values on our block.

Up until the fire last night, this property still had lots of potential.  The foundation was good, the 'bones' were solid, the roof and siding were still fairly new.  In fact, several individuals and organizations had expressed interest in purchasing the property.  In spite of the problems it was creating on our block, it could still have been a healthy and productive part of life on our block.

So what happened to it?

The story on the street is that the owner went through a divorce that caused him to be unable to continue payments on the mortgage, the bank initiated foreclosure proceedings on the owner.  The owner then relinquished the property to the bank.  Then the bank decided it didn't want the property after all, and so never took legal steps to finalize the transfer of title.

At this point, the original owner had been run off by the bank, and the bank was refusing to take responsibility for the property, so it had become our problem...

We repeatedly called the numbers the bank left on the doors during the foreclosure action, but they refused to talk to us.  We called the police when we saw it being vandalized and broken into, but they have bigger and better things to do than chase away trespassing kids.  We even enlisted the aid of local housing organizations who were interested in purchasing and rehabbing the property, but they couldn't make any headway with the bank.

This would all just be a sad but curious story, if it weren't for the fact that this is a systemic problem.  This story is repeated on every block in our neighborhood, and in half the neighborhoods of our City.  (From what I understand there are many Cities with identical problems.)  The neglect of those in power is one of the sustaining forces of urban blight.

The bank sent out a crew to 'secure' the house at one point (they boarded up doors and windows, but never bothered to lock the basement door).  One of these men told me, "the bank doesn't really care about this house, they aren't even interested in selling it, having it sit here vacant is just a tax write-off."  I don't know about his official position with the bank (I had the feeling he was just an outside contractor) but the simple fact is that the bank created a huge mess, and is doing nothing to solve it.  In fact, they carry on with business as usual, while we suffer the consequences.  It is one of the forces tearing at the fabric of health and peace in the life of our neighborhood.

So while there are many people who bear responsibility for this problem, the owner who lost his ability to pay and then walked away too soon, the individuals who vandalized the property, and the parents who allow their kids to play unattended in vacant houses, the real culprit in this is the parasitic bank that created this situation, and the system of finance and politics that fostered it.

Needless to say, this reality is frustrating and even, at times, enraging.

Our politicians take credit for 'cleaning up the City' when all they ever do is crack down on homeowners who are trying to do their best to maintain their homes.  They wouldn't dream of holding banks accountable for their actions.

I recently had an officer of City Hall tell me that they had to raise the listing prices of City-owned properties in order to help bolster the market.  I said then, and I say now, instead of artificially inflating prices, lets fix the problems!  I want banks to simply be financially responsible in the same way I am.  If I were to own a house, and let people come in and do whatever they wanted there, criminal activity, vandalism, and ultimately setting it on fire, I would be held liable for it by the City.  I would be fined repeatedly, and ultimately be forced to sell the property or have it taken from me.

Of course all of this assumes the bank and the City are immoral, and that we are merely trying to get them to follow the same legal and financial rules as the rest of us.  They could actually go further than the law; they could actually do the right thing.  I'd love it if banks actually took responsibility for the property they owned, and the impact those properties have on the neighbors.  But I don't expect it...

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