Oklahoma State Legislature moves to stop municipal programs that manage blight created by vacant property
Oklahoma: In many if not most cases, vacant or abandoned properties generate very little in the way of revenue due to property or sales tax. Much of the time, those properties sit empty and create eyesores, accumulating debris and becoming safety hazards due to building and grounds disrepair, as well as animal infestation or use for criminal activities.
Oklahoma City suffers from such difficulties due to blighted property, to the tune of 12,000 homes, according to study released June 23, 2013, by GSBS Richman Consulting. The cost to the city is estimated at “$6.5 million annually for services (police, fire, and animal welfare) attributed to the [vacant and abandoned buildings].” Additionally, the estimated loss of revenue to Oklahoma City, due to potential registration and ordinance fees, was upwards of $20 million; with an estimated $2.7 billion in reduction of property value due to those neighborhoods left in continued decline.
With that information on hand, a vacant building registry was undertaken with the ordinance set to begin Jan. 3, 2014. Property owners were expected to begin receiving notification as early as spring 2014.
An argument was raised that vacant property registries are unnecessary, as methods to contact and track owners already exist, and just because a home is vacant, it is not necessarily in a state of disrepair.
Such opposition to the registry was spearheaded by the Oklahoma Association of Realtors, and joined by the Oklahoma State Home Builders Association, Oklahoma Credit Union Association, Oklahoma Bankers Association, and Oklahoma Farm Bureau via House Bill 2620, as sponsored by Rep. Steve Martin, R-Bartlesville.
“This (Oklahoma City) ordinance has now become a model for other municipalities,” Matt Robison, vice president of government affairs for the Oklahoma Association of Realtors, said. “In an effort to protect property rights and keep local governments from overreach for the purpose of generating revenue, this bill assures that municipalities cannot mandate such registries.”
“For purposes of promoting commerce and the equitable treatment of the citizens of this state, the registration of any real property by any municipality is declared to be a statewide concern and shall be prohibited pursuant to the provisions of this act … No municipality shall enact or attempt to enforce through civil or criminal penalties any ordinance, rule or regulation to require the registration of real property.
No municipality shall assess or charge any involuntary fee or fine to own or register real property or for the lease, rental, occupancy or non-occupancy, lease-purchase, transfer, assignment, bequest or devise of any part or parcel of the real property located within its boundaries.
Any ordinance, rule or regulation contrary to the provisions of this section, whether enacted prior to or after the effective date of this act, is declared null and void and unenforceable against every owner, purchaser, assignee, lessee, mortgagee or beneficiary of any interest in the real property,” according to the bill as approved by the governor May 23.
The prohibition could be construed as a mixed message, due to the attested desire to rejuvenate blighted neighborhoods, yet the decree not allowing cities to put in place further financial measures to back such rejuvenation.
Additionally, contrary to some claims from the home associations that sponsored the bill prohibiting such ordinances, a survey conducted by Oklahoma City leadership found nearly 80 percent of respondents listing upkeep of vacant buildings in their neighborhoods as “below average” to “poor,” with more than 90 percent believing owners of vacant properties should be required to register and pay fees to mitigate costs to the city.
The initial ordinance efforts were intended to use and generate revenue only for the purpose of funding the program and its employees, according to a statement from Jane Abraham, Oklahoma City community and government manager.
Oklahoma City spent approximately $75,000 on unsecured building problems from July 2013 to April 2014, and $245,000 in contractor fees for further disrepair difficulties. Those costs are anticipated to rise, if the past 10 years is an indicator, as “over the past decade the number of long-term vacant housing units in Oklahoma City has increased by roughly 25 percent. The primary cause is low property carrying costs, meaning that vacant buildings cost so little to own that owners prefer to keep them vacant rather than putting them into productive use,” according to the GSBS study.
Without disincentives, or incentives, to push vacant property owners to resell or rejuvenate properties, success in overcoming blight or circumventing blight would rest primarily with owners of properties acting in the city’s interest, even when those interests were financially more burdensome than merely letting the properties sit.
The issue could be interpreted as a matter of whose opinions about blighted property are more in the interest of the city: those of business home associations, or those of the people living in the neighborhoods of the vacant properties?
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