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United States Government Accountability Office:
GAO:
Report to the Ranking Member, Subcommittee on Regulatory Affairs,
Stimulus Oversight, and Government Spending, Committee on Oversight
and Government Reform, House of Representatives:
November 2011:
Vacant Properties:
Growing Number Increases Communities' Costs and Challenges:
GAO-12-34:
GAO Highlights:
Highlights of GAO-12-34, a report to the Ranking Member, Subcommittee
on Regulatory Affairs, Stimulus Oversight, and Government Spending,
Committee on Oversight and Government Reform, House of Representatives.
Why GAO Did This Study:
Vacant and unattended residential properties can attract crime, cause
blight, and pose a threat to public safety. While homeowners or
mortgage owners-—including the mortgage servicers that administer
loans on behalf of loan owners—-are responsible for maintaining vacant
properties with mortgages undergoing foreclosure, the costs local
governments incur to mitigate any unsafe conditions can be
significant. GAO was asked to examine (1) trends in the number of
vacant properties and how they relate to the recent increase in
foreclosures, (2) the types of costs that vacant properties create and
who bears the responsibility for these properties and their costs, and
(3) state and local government strategies to address vacant properties
and the federal role in assisting these efforts. GAO analyzed Census
Bureau vacancy data and data on property maintenance costs from the
Federal Housing Administration (FHA) and two housing-related
government-sponsored enterprises (GSE). GAO conducted case studies in
nine cities selected to provide a range of local economic and housing
conditions, rates of foreclosure, and geographic locations. GAO also
interviewed local officials, representatives of community development
organizations, federal agencies, and mortgage servicers, among others.
The Federal Reserve, Census, Office of Comptroller of the Currency,
FHA, Federal Housing Finance Agency, and GSEs provided technical
comments, which GAO incorporated as appropriate. Treasury commented
that the report was informative and noted the need for all
stakeholders to analyze policy responses to this issue.
What GAO Found:
According to Census Bureau data, nonseasonal vacant properties have
increased 51 percent nationally from nearly 7 million in 2000 to 10
million in April 2010, with 10 states seeing increases of 70 percent
or more. High foreclosure rates have contributed to the additional
vacancies. Population declines in certain cities and high unemployment
also may have contributed to increased vacancies. However, these data
do not indicate the number of vacant properties that are inadequately
maintained and imposing costs on local governments.
Figure: Percentage Increase in Number of Vacant Properties (excluding
seasonal use/migrant worker properties), 2000 to 2010:
[Refer to PDF for image: illustrated U.S. map]
If a homeowner abandons a property, servicers may have the right under
typical mortgage agreements to conduct certain maintenance, although
they generally are not obligated to do so until they assume ownership
on behalf of the loan owner after foreclosure. In 2010, the GSEs
reimbursed servicers or vendors over $953 million for property
maintenance costs. However, local governments reported spending
millions of dollars—-including federal funds-—on vacant properties
that are not adequately maintained. For example, Detroit spent about
$20 million since May 2009 to demolish almost 4,000 vacant properties.
Unattended vacant properties produce public safety costs and lower
communities’ tax revenues due to the decline in value of surrounding
properties, with some studies finding that vacant foreclosed
properties may have reduced prices of nearby homes by $8,600 to
$17,000 per property in specific cities.
Cities and states are implementing a variety of strategies to minimize
the negative impacts of vacant properties but face various challenges.
For example, some local governments are creating special entities
called land banks that acquire and hold vacant properties for later
development, sale, or demolition. However, difficulty obtaining
adequate and sustained funding and finding buyers for the properties
can hamper these local efforts. Some cities have passed ordinances
that require servicers to notify the city when a property they are
managing becomes vacant and attempt to hold them responsible for
maintenance. However, localities often lack resources or staff to
enforce these requirements fully. Some suggest fewer properties would
become vacant if servicers had to account for communities’ costs—such
as for policing and fires—when considering whether to modify loans or
foreclose, but servicers and others questioned the feasibility and
effectiveness of such an approach. Local officials and community
groups said they need more funds and increased oversight by federal
regulators to ensure that servicers comply with local property
maintenance codes.
View [hyperlink, http://www.gao.gov/products/GAO-12-34] or key
components. For more information, contact Mathew J. Scirè at (202) 512-
8678 or sciremj@gao.gov. [End of section]
Contents:
Letter:
Background:
More Properties Have Become Vacant in Recent Years, in Step with
Increased Foreclosures and Unemployment:
Improperly Maintained Vacant Properties Create Costs and Other
Problems for Neighborhoods and Local Governments:
State and Local Government Strategies to Address Vacant Properties
Face Resource and Other Challenges:
Agency Comments and Our Evaluation:
Appendix I: Objectives, Scope, and Methodology:
Appendix II: U.S. Decennial Census Data on Residential Vacancies, 2000
and 2010:
Appendix III: Comments from the Department of the Treasury:
Appendix IV: GAO Contact and Staff Acknowledgments:
Tables:
Table 1: Census 2010 Vacancy Status Categories and Definitions:
Table 2: Population in Selected Cities and Percentage Increase in
Nonseasonal Vacancies, 2000 and 2010:
Table 3: GSEs' Reimbursements to Servicers and Payments to Vendors for
Maintenance Costs Incurred Prior to and Following Foreclosure Sale,
2010:
Table 4: FHA Reimbursement to Servicers and Contractors for
Maintenance Costs Incurred Prior to and Following Conveyance, 2010:
Table 5: Census Data on Vacant Residential Units, 2000 and 2010:
Table 6: Number of Vacant Residential Units, 2010 Census:
Figures:
Figure 1: Percentage Increase in Number of Nonseasonal Vacancies by
State between 2000 and 2010:
Figure 2: States with the Greatest Increase in Nonseasonal Vacant
Units' Share of Housing Stock, 2000 to 2010:
Figure 3: Total Nonseasonal Vacant Properties in Selected Cities and
Vacant Properties in the "Other Vacant" Census Category as a
Percentage of Housing Stock, 2000 to 2010:
Figure 4: The Change in Vacant Properties between 2000 and 2010, and
Percentage of Loans in Foreclosure and Unemployment Rates as of
December 2010, by State:
Figure 5: Example Timeline of the Foreclosure Process and Potential
Periods of Vacancy:
Figure 6: GSEs' Property Maintenance Costs Paid on Properties for
Which They Assumed Ownership through Foreclosure, 2010:
Figure 7: Types and Amounts of FHA Property Maintenance Costs Paid to
Contractors Post Conveyance, 2010:
Figure 8: Examples of Vacant Properties in Chicago and Detroit:
Figure 9: Damaged Property in Henderson, Nevada:
Figure 10: A Row House Next to a Vacant Lot in Baltimore, Maryland:
Figure 11: Demolition of a Single-family Property in Indio, California:
Figure 12: Examples of Interior Conditions of Vacant Properties in
Indio, California:
Figure 13: Vacant Properties Near Recently Rehabilitated Homes in
Chicago, as of 2011:
Abbreviations:
ACS: American Community Survey:
CDBG: Community Development Block Grant:
CDC: community development corporation:
FDIC: Federal Deposit Insurance Corporation:
FHA: Federal Housing Administration:
FHFA: Federal Housing Finance Agency:
GSE: government-sponsored enterprise:
HAMP: Home Affordable Modification Program:
HUD: Department of Housing and Urban Development:
NEO CANDO: Northeast Ohio Community and Neighborhood Data for
Organizing:
NPV: net present value:
NSP: Neighborhood Stabilization Program:
OCC: Office of the Comptroller of the Currency:
REO: real-estate owned:
USPS: U.S. Postal Service:
[End of section]
United States Government Accountability Office:
Washington, DC 20548:
November 4, 2011:
The Honorable Dennis J. Kucinich:
Ranking Member:
Subcommittee on Regulatory Affairs, Stimulus Oversight, and Government
Spending:
Committee on Oversight and Government Reform:
House of Representatives:
Dear Mr. Kucinich:
During the continuing foreclosure crisis and economic downturn,
increased numbers of vacant residential properties are becoming
vandalized or dilapidated, attracting crime, and contributing to
neighborhood decline in many communities across the country. Even
though homeowners whose properties are being foreclosed upon may
continue to occupy their properties until after a foreclosure sale
occurs, many leave their homes during the foreclosure process. In
addition, properties for which a new entity has assumed ownership
through foreclosure may be vacant until the property is resold. If
neither of these owners nor the mortgage servicer--the entity that
manages mortgage loans and foreclosures on behalf of banks and other
holders of mortgage loans--acts to maintain these vacant homes, these
properties can deteriorate, increasing blight in the community.
Unattended vacant properties can also increase costs for local
governments that must expend resources to inspect the properties and
mitigate any unsafe conditions, including demolishing some properties.
[Footnote 1]
Because of the impact of housing on the national and local economies,
the federal government has attempted to address issues arising from
the financial crisis that began in 2007 and its aftermath. As part of
the Troubled Asset Relief Program created to restore stability and
liquidity to the financial system, Congress called for the Department
of the Treasury (Treasury) to preserve homeownership and protect home
values.[Footnote 2] In addition, Congress created the Neighborhood
Stabilization Program (NSP), which provides grants to states and local
governments to help reduce the number of foreclosed and abandoned
properties and restore depressed local housing markets.[Footnote 3]
Your letter expressed concern over the costs that foreclosed and
unattended vacant homes are creating for local communities and asked
us to review the strategies state and local governments are using to
address unattended vacant property problems and the challenges those
governments face. Specifically, this report addresses (1) trends in
the number of vacant properties and how they relate to the recent
increase in foreclosures, (2) the types of costs that vacant
properties create and who bears the responsibility for these
properties and their costs, and (3) state and local government
strategies for addressing vacant properties and the federal role in
assisting these efforts.
To address these objectives, we analyzed data on vacant residential
housing units from the Census Bureau (Census) from 2000 to 2010, as
well as from the U.S. Postal Service (USPS) as of the second quarter
of 2010. We also analyzed data on property maintenance costs from two
housing-related government-sponsored enterprises (GSE)--Fannie Mae and
Freddie Mac--and the Department of Housing and Urban Development's
Federal Housing Administration (FHA). We assessed the reliability of
the data we used by reviewing past GAO and other assessments of the
data and interviewing knowledgeable agency officials. We determined
that these data were sufficiently reliable for use in the report. We
also collected information about local strategies by reviewing
literature and conducting case studies in nine localities that we
selected based on high vacancy and foreclosure rates, geographic
location, economic conditions, and foreclosure processes. These
localities were Baltimore, Maryland; Cape Coral, Florida; Chicago,
Illinois; Cleveland, Ohio; Detroit, Michigan; Indianapolis, Indiana;
Indio, California; Las Vegas, Nevada; and Tucson, Arizona. In each
location, we interviewed local government officials and
representatives of nonprofit and community development organizations.
In addition, we interviewed code enforcement officials in two states
that recently passed laws pertaining to maintenance of vacant
properties in foreclosure--New York and New Jersey. We also
interviewed staff from one of the largest maintenance companies that
conducts property inspections and maintenance on behalf of services
nationwide, academic researchers, GSE staff, and five mortgage
servicers--including some of the largest firms and those that
specialized in subprime loans. In addition, we interviewed
representatives of federal agencies, including the Board of Governors
of the Federal Reserve System (Federal Reserve), Census, Federal
Deposit Insurance Corporation (FDIC), Office of the Comptroller of the
Currency (OCC), Department of Housing and Urban Development (HUD),
Federal Housing Finance Agency (FHFA), and Treasury. Appendix I
contains more information about our objectives, scope, and methodology.
We conducted this performance audit from November 2010 to November
2011 in accordance with generally accepted government auditing
standards. Those standards require that we plan and perform the audit
to obtain sufficient, appropriate evidence to provide a reasonable
basis for our findings and conclusions based on our audit objectives.
We believe that the evidence obtained provides a reasonable basis for
our findings and conclusions based on our audit objectives.
Background:
Multiple entities have specific roles regarding mortgage loans and the
maintenance of properties that experience foreclosure. When
individuals purchase residential real property with borrowed funds,
they usually enter into a contractual agreement, typically called a
promissory note, in which they agree, among other things, to make
principal and interest payments to the originating lender for a period
of time and to maintain the property in order to prevent it from
deteriorating or decreasing in value due to its condition. Borrowers
usually also sign a mortgage or deed of trust that pledges the
underlying property as collateral against the borrower's default. The
holders of these documents are allowed to record a lien against the
property and are granted the right to seize, and usually sell, the
property should the borrower fail to pay.[Footnote 4]
Institutions that originate home mortgage loans generally do not hold
all such loans as assets on their balance sheets but instead sell them
to other financial institutions or the GSEs, Fannie Mae or Freddie
Mac, for the purpose of securitizing them.[Footnote 5] Through
securitization, the purchasers of these mortgages package them into
pools and issue securities known as mortgage-backed securities for
which the mortgage loans serve as collateral. In some cases, loans are
purchased by financial institutions and issued as mortgage-backed
securities to investors without any involvement of the GSEs or FHA in
securitizations known as "private label." In other cases, mortgage-
backed securities are backed by pools of GSE loans or mortgage loans
insured by federal agencies, such as FHA.[Footnote 6] Mortgage-backed
securities pay interest and principal to their investors, which
include other financial institutions, pension funds, or other
institutional investors. The GSEs guarantee investors in their
securities the timely payment of principal and interest. The
Government National Mortgage Association (Ginnie Mae), a wholly owned
government corporation, guarantees the timely payment of principal and
interest on securities backed by federally insured or guaranteed loans.
After a mortgage originator sells its loans to an investor or to an
institution that will securitize them, another financial institution
or other entity is appointed as the servicer to manage payment
collections and other activities associated with these loans. Mortgage
servicers, which can be large mortgage finance companies, commercial
banks, or small specialty companies unaffiliated with a larger
financial institution, earn a fee for acting as the servicer on behalf
of the purchaser of the loans. Servicing duties can involve sending
borrowers monthly account statements, answering customer-service
inquiries, collecting monthly mortgage payments, maintaining escrow
accounts for property taxes and hazard insurance, and forwarding
proper payments to the mortgage owners. In the event that a borrower
becomes delinquent on loan payments, servicers also initiate and
conduct foreclosures in order to obtain the proceeds from the sale of
the property on behalf of the owners of the loans. Servicers often
contract with third-party vendors to conduct some of their
responsibilities. For example, they may hire property maintenance
companies to inspect and conduct maintenance on properties. The duties
of servicers may vary based on the entity on whose behalf they are
servicing the loans. For the loans they have purchased, Fannie Mae and
Freddie Mac each have issued servicing guidelines that must be
followed by entities servicing loans on their behalf. In addition, FHA
has specific servicer guidelines for entities servicing FHA-insured
loans. For loans that are in private-label securities, servicers'
duties are specified in a contract called a pooling and servicing
agreement, which may place similar expectations on these servicers as
the Fannie Mae or Freddie Mac standards.
If a borrower defaults on a mortgage loan secured by the home, the
mortgage holder is entitled to pursue foreclosure. Once the borrower
is in default, the servicer must decide whether to pursue a home
retention workout or foreclosure alternative, such as a short sale, or
initiate foreclosure.[Footnote 7] If the servicer determines that
foreclosure is the most appropriate option, it follows one of two
foreclosure methods, depending on state law. In a judicial
foreclosure, a judge presides over the process in a court proceeding.
Servicers initiate a formal foreclosure action by filing a lawsuit
with a court. A nonjudicial foreclosure process takes place outside
the courtroom, and is typically conducted by the trustee named in the
deed of trust document. Trustees, and sometimes servicers, generally
send a notice of default to the borrower and publish a notice of sale
in area newspapers or legal publications.
At a foreclosure sale or auction, if no third party has the winning
bid, the servicer can obtain title to the property on behalf of the
mortgage owner and sell it to repay the loan. Servicers transfer
foreclosed properties, referred to as real-estate owned (REO)
properties, from loans that were owned by the GSEs or insured by FHA
to those entities within designated time periods following the
foreclosure sale. The GSEs and FHA have contractors and other entities
that manage the properties on their behalf during the postforeclosure
period. Unless servicing agreements for loans in securitization trusts
require the properties to be transferred to another party, servicers
generally hold the remaining REO properties in their inventory and
manage them until they are resold. Several states have enacted
"redemption" laws that give borrowers the opportunity to match the
winning bids from the foreclosure sale and reclaim their properties.
After foreclosure sales and applicable redemption periods, servicers
or entities working on behalf of the GSEs and FHA typically proceed
with eviction proceedings if foreclosed properties are not already
vacant and then market and sell the properties.[Footnote 8]
Federal Agencies Involved in Overseeing Mortgage Servicers and Funding
Housing Programs:
Several federal agencies share responsibility for regulating the
banking industry in relation to the origination and servicing of
mortgage loans.[Footnote 9] Various agencies oversee federally and
state-chartered banks and their mortgage-related subsidiaries
depending on which agency granted the institution's operating charter.
At the federal level, OCC has authority to oversee nationally
chartered banks and federally chartered savings associations, or
thrifts, (including mortgage operating subsidiaries). The Federal
Reserve oversees insured state-chartered banks that are members of the
Federal Reserve, as well as holding companies for thrifts and any
lenders owned by these companies. The Federal Reserve also has general
authority over bank holding companies, including having responsibility
for oversight of any nonbank subsidiaries of these companies that
conduct mortgage servicing activities. FDIC oversees insured state-
chartered banks that are not members of the Federal Reserve System and
state-chartered thrifts. Both the Federal Reserve and FDIC share
oversight with the state regulatory authority that chartered the bank.
In addition, the Bureau of Consumer Financial Protection has the
authority to supervise mortgage servicers with respect to federal
consumer financial law.[Footnote 10]
Other agencies also are involved in overseeing certain aspects of U.S.
mortgage markets but do not have supervisory authority over mortgage
servicers. For example, FHFA has direct supervisory authority over
Fannie Mae's and Freddie Mac's activities but does not have
supervisory authority over servicers in general. The FHA oversees
institutions approved to service loans that FHA insures for the
servicers' compliance with servicing regulations on, for example, the
timing of foreclosure initiation. Similarly, Treasury has a
contractual relationship with servicers that voluntarily participate
in the Home Affordable Modification Program (HAMP), which is a program
designed to help borrowers avoid foreclosure and stay in their homes
by providing incentives for servicers to perform loan modifications.
To oversee compliance with this program's guidelines, Treasury can
conduct reviews of participating servicers.
The federal government also provides funding assistance to state and
local governments for various housing-related activities, including
for addressing issues related to vacant properties. NSP provides
grants to states and local governments both to help reduce the number
of foreclosed and abandoned properties and to restore depressed local
housing markets. Since 2008, almost $7 billion has been authorized
over the course of three phases. In each phase, grantees receiving NSP
funds may use them directly or reallocate them to other entities
within their states. Grantees must use funds for specifically defined
eligible uses to address issues associated with foreclosed and
abandoned properties. For example, grantees may choose to acquire and
rehabilitate properties for rental or resale or demolish blighted
structures. Participants must also follow several key requirements
governing the use of NSP funds, such as using the funds in "areas of
greatest need" within specified time frames and using a certain
percentage of funds to benefit low-income households. Another program
administered by HUD, the Community Development Block Grant (CDBG)
program, provides grants to localities for 26 eligible activities,
including acquisition, administration and planning, economic
development, housing, public improvements, and public services, among
others. For example, CDBG funds could be used to rehabilitate single-
family residential properties.
More Properties Have Become Vacant in Recent Years, in Step with
Increased Foreclosures and Unemployment:
Various Entities Attempt to Count Vacant Properties but Determining
Occupancy Status is Difficult:
Some federal agencies compile data on the number of vacant properties
in the United States, but using these data to identify unattended
vacant properties--that is, properties that are not being maintained
and therefore impose costs on the surrounding community--is difficult.
The sources of national vacancy data available from federal agencies
include two different collection efforts by Census and data that the
USPS compiles on vacant addresses.[Footnote 11] The decennial census
is intended to make a complete count of the nation's population and
includes questions about housing characteristics such as the total
number of occupied and vacant properties. The 2000 and 2010 Census
efforts took place over several months beginning in April of each year
and recorded the status of vacant properties as of April 1, or Census
Day. As part of the 2010 Census, Census mailed questionnaires to more
than 120 million housing units and conducted follow-up, door-to-door
data collection for almost 47 million households that did not mail
back the census forms.[Footnote 12] A second Census data collection
effort that includes information on vacant properties is its American
Community Survey (ACS), which it compiles through a survey of 3
million households throughout the year. The ACS data are reported on
an annual basis and are also aggregated into 3-year and 5-year
datasets. To collect the ACS data, Census mails a questionnaire to a
sample of 3 million households and if surveys are not returned, it
follows up by telephone if a valid telephone phone number exists. ACS
field representatives also conduct door-to-door surveys of a subsample
of the households that do not respond to either the mailing or
telephone call. Another source of data on the number of vacant
properties is compiled by USPS, which maintains a listing of
properties that appear to be vacant based on observations by
individual postal carriers. The USPS data may not immediately capture
a vacant property as USPS does not record a property as vacant until
at least 90 days have passed from when vacancy was first suspected.
According to Census and USPS officials, and representatives of one
local government, nongovernmental organization, and mortgage servicer,
the primary difficulty in accurately determining the total number of
vacant properties is identifying whether a property is truly vacant.
[Footnote 13] Methods these entities use generally rely on physical
inspection of property exteriors to identify indicators of vacancy,
such as broken windows or broken/missing doors, high grass, or
uncollected mail. In some cases, Census enumerators or other
inspectors may obtain information about the occupancy status of a
property from neighbors. Some methods that local government or
nongovernmental staff also use include reviewing public utility (e.g.,
water, electricity) usage records as utility shutoffs or very low
usage levels can indicate that a property may be vacant.
Distinguishing the type of vacant property--for example, whether the
property is a vacation home--can also be difficult using exterior
inspection methods. Another limitation is that definitions or criteria
used to determine vacancy can vary among data collection sources,
making comparability of vacancy levels across different sources
difficult. In addition, no comprehensive data are available about the
duration that properties are vacant. Some properties may be
permanently vacant, while others may be reoccupied after a period of
time. Given these limitations, measurements of vacant properties may
be more useful as general indicators of the scale of the problem, as
of the point in time a survey was taken, than as counts of the exact
number of vacant properties.
In addition, neither one of the available national data sources
indicates who owns the vacant properties or whether or not they are
being maintained, which would help identify unattended vacant
properties that are likely to cause the most problems for local
communities.[Footnote 14] Not all vacant properties place the same
burden on local communities. The decennial census and the ACS data
categorize vacant properties in a way that makes it possible to
exclude from estimates some properties that are likely to be regularly
maintained, such as vacation homes; properties for rent or for sale,
or those that have recently been rented or sold, but not yet occupied;
or those intended for migrant workers. A final category, "other
vacant," includes vacant properties about which the Census door-to-
door surveyors did not find enough information to place in other
categories (see table 1). According to Census officials, the "other
vacant" category could include foreclosed properties that were being
held off the market by the owner or were not visibly for sale or rent
and may include unattended properties. This category could also
include properties that fall into the other categories--for example
properties that may have been sold or rented but are not occupied--
however, Census surveyors did not have enough information to place
them in those categories.[Footnote 15] Because Census staff have used
these vacant property categories in several decennial censuses and as
part of compiling the ACS survey, changes in various types of vacant
properties can be tracked over time.
Table 1: Census 2010 Vacancy Status Categories and Definitions:
According to 2010 Census technical documentation and interviews with
Census officials, vacancy status and other characteristics of vacant
units were determined by census enumerators obtaining information from
landlords, owners, neighbors, rental agents, and others. Vacant units
are subdivided according to their housing market classification as
follows:
For Rent or Sale--These are vacant units offered for rent and vacant
units offered either for rent or for sale.
Rented, Not Occupied--These are vacant units rented but not yet
occupied, including units where money has been paid or agreed upon but
the renter has not yet moved in.
For Sale Only--These are vacant units being offered for sale only,
including units in cooperatives and condominium projects if the
individual units are offered for sale only. If units are offered
either for rent or for sale, they are included in the "For Rent"
classification.
Sold, Not Occupied--These are vacant units sold but not yet occupied,
including units that have been sold recently but into which the new
owner has not yet moved.
For Seasonal, Recreational, or Occasional Use--These are vacant units
used or intended for use only in certain seasons or for weekends or
other occasional use throughout the year. Seasonal units include those
used for summer or winter sports or recreation, such as beach cottages
and hunting cabins. Seasonal units also may include quarters for such
workers as herders and loggers. Interval ownership units, sometimes
called shared-ownership or time-sharing condominiums, also are
included.
For Migrant Workers--These include vacant units intended for occupancy
by migrant workers employed in farm work during the crop season. (Work
in a cannery, freezer plant, or food-processing plant is not farm
work, according to Census).
Other Vacant--If a vacant unit does not fall into any of the
categories specified above, it is classified as "Other Vacant." For
example, this category includes units held for occupancy by a
caretaker or janitor and units held for personal reasons of the owner.
According to Census officials, the "other vacant" category could
include foreclosed properties that were being held off the market by
the owner or were not visibly for sale or rent and may include
unattended properties.
Source: Definitions of Subject Characteristics, U.S. Census Bureau,
2010 Census Summary File 1; interview of Census officials.
[End of table]
USPS also maintains categories for residential and commercial
addresses, but using these data to identify unattended vacant
properties and track them over time is difficult. First, the Census
data attempts to classify vacant residential properties into seven
categories, whereas the USPS uses only two categories, one for vacant
addresses and one category that includes vacant addresses and other
types of occupied addresses, which it calls "no stat." This "no stat"
category contains properties that are under construction, demolished,
blighted, or otherwise identified by a USPS delivery carrier as not
likely to become an occupied address for some time. The category may
also include occupied addresses, such as those behind gated
communities. A HUD official and other governmental and nongovernmental
housing experts told us they have used the USPS data on vacant
addresses for analyses of vacant properties in localities around the
country. In addition, the USPS data can provide useful updates in
between the Census data collection periods. However, because USPS
officials told us that they had changed their vacant address data
collection processes after 2006 and made other changes to their
address management database in September 2010, we were unable to use
their data to assess trends in the number of vacant properties over
time. Because Census data enables comparisons of vacant property data
over time for similar categories of properties, we primarily used
Census data for the purposes of this report.
Available Census Data Show that Nonseasonal Vacant Properties
Increased Significantly Between 2000 and 2010:
Our review of Census data indicates that the total estimated number of
residential vacancies increased between 2000 and 2010. By analyzing
the Census data sources, we estimated that the total number of vacant,
residential housing units in the United States--excluding vacant units
identified in the Census data as for seasonal use or use by migrant
workers--increased 51 percent between 2000 and 2010, from nearly 7
million to 10 million (See appendix II).[Footnote 16] The decennial
census also counted the total number of housing units, and our
analysis found that the total number of residential units--the housing
stock--in the United States increased by almost 14 percent during this
period, from 116 million to 132 million units. Based on these data,
the number of nonseasonal vacant units as a share of the nation's
total housing stock increased from 6 percent to 8 percent--a
substantial increase, according to Census housing statistics officials
we interviewed about the data. At the same time, the number of
households increased about 11 percent, from approximately 105.5
million to just under 117 million.
At the state level, the increase in the number of nonseasonal
vacancies varied among states over the past decade, with some
experiencing a larger increase in the number of vacant units than
others (see figure 1). Ten states experienced increases of 70 percent
or more. The states with the largest percentage increases in
nonseasonal vacant units over the last decade were Nevada (126
percent), Minnesota (100 percent), New Hampshire (99 percent), Arizona
(92 percent), and Florida (90 percent). Census data show that these
states also experienced increases in their total housing stock over
the decade. For example, in Nevada, the housing stock increased 42
percent between 2000 and 2010 and, in Florida, the housing stock
increased 23 percent. [Footnote 17]
Figure 1: Percentage Increase in Number of Nonseasonal Vacancies by
State between 2000 and 2010:
[Refer to PDF for image: illustrated U.S. map]
U.S. states with largest Increases in number of nonseasonal vacancies,
2000-2010:
United States:
Number of nonseasonal vacant units:
2000: 6,820,324;
2010: 10,314,979;
Percentage change 2000-2010: 51.2%.
1. Nevada:
Number of nonseasonal vacant units:
2000: 59,485;
2010: 134,619;
Percentage change 2000-2010: 126.3%.
2. Minnesota:
Number of nonseasonal vacant units:
2000: 64,656;
2010: 129,169;
Percentage change 2000-2010: 99.8%.
3. New Hampshire:
Number of nonseasonal vacant units:
2000: 15,976;
2010: 31,844;
Percentage change 2000-2010: 99.3%.
4. Arizona:
Number of nonseasonal vacant units:
2000: 145,261;
2010: 278,671;
Percentage change 2000-2010: 91.8%.
5. Florida:
Number of nonseasonal vacant units:
2000: 480,193;
2010: 910,167;
Percentage change 2000-2010: 89.5%.
6. Georgia:
Number of nonseasonal vacant units:
2000: 224,335;
2010: 420,852;
Percentage change 2000-2010: 87.6%.
7. Michigan:
Number of nonseasonal vacant units:
2000: 213,247;
2010: 394,881;
Percentage change 2000-2010: 85.2%.
8. Colorado:
Number of nonseasonal vacant units:
2000: 77,087;
2010: 137,541;
Percentage change 2000-2010: 78.4%.
9. Rhode Island:
Number of nonseasonal vacant units:
2000: 18,411;
2010: 32,699;
Percentage change 2000-2010: 77.6%.
10. Massachusetts:
Number of nonseasonal vacant units:
2000: 84,444;
2010: 145,388;
Percentage change 2000-2010: 72.2%.
1% - 10%:
District of Columbia:
Hawaii:
New Mexico:
West Virginia:
11% - 20%:
Alaska:
Montana:
Pennsylvania:
South Dakota:
Wyoming:
21% - 30%:
Arkansas:
Kansas:
Kentucky:
Louisiana:
Mississippi:
New York:
Oklahoma:
Oregon:
31% - 40%:
Alabama:
Maryland:
Nebraska:
41% - 50%:
Iowa:
Maine:
New Jersey:
Texas:
Utah:
Vermont:
South Carolina:
Washington:
More than 50%:
Arizona:
California:
Colorado:
Connecticut:
Delaware:
Florida:
Georgia:
Idaho:
Illinois:
Indiana:
Massachusetts:
Michigan:
Minnesota:
Missouri:
Nevada:
New Hampshire:
North Carolina:
North Dakota:
Ohio:
Rhode Island:
Tennessee:
Virginia:
Wisconsin:
Sources: 2000 and 2010 Census data; map (MapInfo).
Note: These data exclude vacant units that the Census identified as
for seasonal use or for use by migrant workers.
[End of figure]
The Census data show that the nonseasonal vacant units' percentage of
the housing stock--the vacancy rate--also increased in many of these
states between 2000 and 2010, as shown in figure 2.
Figure 2: States with the Greatest Increase in Nonseasonal Vacant
Units' Share of Housing Stock, 2000 to 2010:
[Refer to PDF for image: illustrated horizontal bar graph]
United States:
Nonseasonal vacant properties as a percentage of total housing stock
(vacancy rate):
2000: 5.9%;
2010: 7.8%;
Percentage increase in vacancy rate: 33.1%.
1. New Hampshire:
Nonseasonal vacant properties as a percentage of total housing stock
(vacancy rate):
2000: 2.9%;
2010: 5.2%;
Percentage increase in vacancy rate: 77.4%.
2. Minnesota:
Nonseasonal vacant properties as a percentage of total housing stock
(vacancy rate):
2000: 3.1%;
2010: 5.5%;
Percentage increase in vacancy rate: 75.8%.
3. Michigan:
Nonseasonal vacant properties as a percentage of total housing stock
(vacancy rate):
2000: 5.0%;
2010: 8.7%;
Percentage increase in vacancy rate: 73.0%.
4. Rhode Island:
Nonseasonal vacant properties as a percentage of total housing stock
(vacancy rate):
2000: 4.2%;
2010: 7.1%;
Percentage increase in vacancy rate: 68.6%.
5. Massachusetts:
Nonseasonal vacant properties as a percentage of total housing stock
(vacancy rate):
2000: 3.2%;
2010: 5.2%;
Percentage increase in vacancy rate: 60.8%.
6. Nevada:
Nonseasonal vacant properties as a percentage of total housing stock
(vacancy rate):
2000: 7.2%;
2010: 11.5%;
Percentage increase in vacancy rate: 59.5%.
7. Florida:
Nonseasonal vacant properties as a percentage of total housing stock
(vacancy rate):
2000: 6.6%;
2010: 10.1%;
Percentage increase in vacancy rate: 54.0%.
8. California:
Nonseasonal vacant properties as a percentage of total housing stock
(vacancy rate):
2000: 3.9%;
2010: 5.8%;
Percentage increase in vacancy rate: 50.7%.
9. Georgia:
Nonseasonal vacant properties as a percentage of total housing stock
(vacancy rate):
2000: 6.8%;
2010: 10.3%;
Percentage increase in vacancy rate: 50.6%.
10. Ohio:
Nonseasonal vacant properties as a percentage of total housing stock
(vacancy rate):
2000: 6.1%;
2010: 9.1%;
Percentage increase in vacancy rate: 49.8%.
11. Arizona:
Nonseasonal vacant properties as a percentage of total housing stock
(vacancy rate):
2000: 6.6%;
2010: 9.8%;
Percentage increase in vacancy rate: 47.6%.
12. Colorado:
Nonseasonal vacant properties as a percentage of total housing stock
(vacancy rate):
2000: 4.3%;
2010: 6.2%;
Percentage increase in vacancy rate: 45.8%.
13. Illinois:
Nonseasonal vacant properties as a percentage of total housing stock
(vacancy rate):
2000: 5.4%;
2010: 7.8%;
Percentage increase in vacancy rate: 44.2%.
14. Wisconsin:
Nonseasonal vacant properties as a percentage of total housing stock
(vacancy rate):
2000: 4.1%;
2010: 5.8%;
Percentage increase in vacancy rate: 42.2%.
15. New Jersey:
Nonseasonal vacant properties as a percentage of total housing stock
(vacancy rate):
2000: 4.1%;
2010: 5.7%;
Percentage increase in vacancy rate: 39.5%.
16. Indiana:
Nonseasonal vacant properties as a percentage of total housing stock
(vacancy rate):
2000: 6.4%;
2010: 8.9%;
Percentage increase in vacancy rate: 38.4%.
17. Vermont:
Nonseasonal vacant properties as a percentage of total housing stock
(vacancy rate):
2000: 3.6%;
2010: 4.9%;
Percentage increase in vacancy rate: 36.0%.
18. Connecticut:
Nonseasonal vacant properties as a percentage of total housing stock
(vacancy rate):
2000: 4.4%;
2010: 5.9%;
Percentage increase in vacancy rate: 33.5%.
19. Tennessee:
Nonseasonal vacant properties as a percentage of total housing stock
(vacancy rate):
2000: 6.9%;
2010: 9.2%;
Percentage increase in vacancy rate: 31.8%.
20. Virginia:
Nonseasonal vacant properties as a percentage of total housing stock
(vacancy rate):
2000: 5.2%;
2010: 6.8%;
Percentage increase in vacancy rate: 31.4%.
Sources: Census 2000 and 2010.
Note: Vacant units that Census identified as for seasonal use or for
use by migrant workers are excluded.
[End of figure]
We also analyzed Census data at the city level and found that some
cities in states with relatively large increases in the number of
nonseasonal vacancies, such as Michigan and Ohio, generally also
experienced increases in the number of nonseasonal vacant properties.
The number of nonseasonal vacant units more than doubled in Detroit,
Michigan, and increased 62 percent in Cleveland, Ohio. In both of
these cities, nonseasonal vacant properties were already a larger
share of the housing stock in 2000 than most of the other cities we
examined--vacant properties made up 10 percent of the total housing
stock in Detroit and 11 percent of the total housing stock in
Cleveland in the 2000 Census. By the 2010 Census, those percentages
had increased to 23 percent in Detroit and 19 percent in Cleveland.
Similarly, the number of nonseasonal vacancies, as a share of the
total housing stock, nearly doubled from 6 percent to just under 12
percent in Las Vegas.
Local government officials and community group representatives told us
that distinguishing among different types of vacant properties is
important to be able to identify the number of properties that are
likely to impose costs on the community. As we noted above, the Census
vacancy status categories can be useful in identifying some vacant
properties, such as those in the "other vacant" category, that may be
more likely to be unattended and so might burden local governments as
opposed to those that are likely to be maintained, such as those that
are for seasonal use. For example, prior to the surge in foreclosures
of the second half of the decade, Baltimore, Cleveland, and Detroit
all had large numbers of properties in the category "other vacant" in
2000 relative to the other cities we examined. However, these cities
also still saw increases in both the overall nonseasonal number of
vacant properties and the share of properties in the "other vacant"
category as a percentage of their total housing stock by 2010. In
addition, Cape Coral, Florida, experienced a large increase in
nonseasonal vacant properties between 2000 and 2010--from about 2,100
to more than 11,000. Moreover, the increase in the category "other
vacant" from about 1 percent of the housing stock in 2000 (433
properties) to 6.5 percent of the housing stock in 2010 (5,100
properties) indicates that some of the increase in the overall number
of vacant properties in that community may have been the result of
overbuilding in that city. These data are corroborated by local Cape
Coral officials, who told us that many vacant properties were
unfinished or newly constructed properties. Census officials also told
us that such newly completed or unfinished properties would be
categorized as "other vacant" by Census door-to-door surveyors.
Similarly, the number of "other vacant" properties increased 271
percent in Las Vegas, Nevada, from just under 1,900 in the 2000 Census
to 7,000 in the 2010 Census. Figure 3 shows the percentage of the
total housing stock that was vacant (and not for seasonal use) in each
time period in each city we studied, and the percentage of housing
stock accounted for by properties categorized as "other vacant" in the
Census data. The "other vacant" category does not necessarily capture
all properties that may be unattended and imposing costs on
communities. Vacant, foreclosed properties that are on the market for
sale could also be vandalized or not well-maintained.
Figure 3: Total Nonseasonal Vacant Properties in Selected Cities and
Vacant Properties in the "Other Vacant" Census Category as a
Percentage of Housing Stock, 2000 to 2010:
[Refer to PDF for image: vertical bar graph]
Vacancies as a percentage of total housing stock:
Tucson, Arizona:
Nonseasonal vacant housing units as a share of total housing stock in
that city:
2000: 6.2%;
2010: 1.3%;
Vacant housing units in the “other vacant” Census category as a share
of total housing stock in that city:
2000: 9.1%;
2010: 1.9%.
Indio, California:
Nonseasonal vacant housing units as a share of total housing stock in
that city:
2000: 5.1%;
2010: 1.7%;
Vacant housing units in the “other vacant” Census category as a share
of total housing stock in that city:
2000: 9.0%;
2010: 1.6%.
Cape Coral, Florida:
Nonseasonal vacant housing units as a share of total housing stock in
that city:
2000: 4.5%;
2010: 1.0%;
Vacant housing units in the “other vacant” Census category as a share
of total housing stock in that city:
2000: 14.5%;
2010: 6.5%.
Chicago, Illinois:
Nonseasonal vacant housing units as a share of total housing stock in
that city:
2000: 7.5%;
2010: 2.8%;
Vacant housing units in the “other vacant” Census category as a share
of total housing stock in that city:
2000: 11.6%;
2010: 3.9%.
Indianapolis, Indiana:
Nonseasonal vacant housing units as a share of total housing stock in
that city:
2000: 8.8%;
2010: 2.5%;
Vacant housing units in the “other vacant” Census category as a share
of total housing stock in that city:
2000: 12.2%;
2010: 4.6%.
Baltimore, Maryland:
Nonseasonal vacant housing units as a share of total housing stock in
that city:
2000: 13.7%;
2010: 7.0%;
Vacant housing units in the “other vacant” Census category as a share
of total housing stock in that city:
2000: 15.4%;
2010: 7.7%.
Detroit, Michigan:
Nonseasonal vacant housing units as a share of total housing stock in
that city:
2000: 10.1%;
2010: 4.5%;
Vacant housing units in the “other vacant” Census category as a share
of total housing stock in that city:
2000: 22.6%;
2010: 11.6%.
Las Vegas, Nevada:
Nonseasonal vacant housing units as a share of total housing stock in
that city:
2000: 6.4%;
2010: 1.0%;
Vacant housing units in the “other vacant” Census category as a share
of total housing stock in that city:
2000: 11.9%;
2010: 2.9%.
Cleveland, Ohio:
Nonseasonal vacant housing units as a share of total housing stock in
that city:
2000: 11.3%;
2010: 3.8%%;
Vacant housing units in the “other vacant” Census category as a share
of total housing stock in that city:
2000: 19.1%;
2010: 8.8%.
[End of figure]
Note: Vacant units that Census identified as for seasonal use or for
use by migrant workers are excluded from the data on total vacant
units in these cities.
Sources: GAO analysis of Census 2000 and 2010 data.
Within cities, the extent to which properties are vacant can vary
substantially across individual neighborhoods. Local officials and
community representatives in Baltimore, Chicago, Cleveland, and
Indianapolis stated that unattended vacant properties in those cities
appear to be concentrated in economically distressed areas.[Footnote
18] Census data at the individual tract level--geographic divisions of
2,500 to 8,000 people--appear to corroborate these statements. We
reviewed Census 2000 and 2010 tract-level statistics on vacant housing
units in these cities as well as ACS data for the 2005 to 2009 period
on the percentage of households below the poverty threshold.[Footnote
19] This review found that the tracts with increases in the number of
properties in the "other vacant" category between 2000 and 2010 were
associated with higher levels of poverty, on average, in the ACS data.
This pattern is consistent with our findings in our 2010 report on
abandoned foreclosures, that found that abandoned foreclosures (when
mortgage servicers start but do not complete the foreclosure process
on a property), which tend to be vacant and unattended, are located in
economically distressed areas.[Footnote 20] The Census statistics also
show that the number of vacant properties in such cities as Cape
Coral, which is in a state that experienced large increases in new
residential construction during the housing boom, increased throughout
the city, but the increases were larger in the Northeast area and
other areas that were developed during the recent housing boom.
Because developing precise counts of the number of vacant properties
that are creating problems for communities using national data sources
is difficult, various local governments and nongovernmental
organizations have undertaken their own tabulations of the number of
unattended or abandoned vacant properties in their areas. However,
differences in data collection methodologies mean that they cannot be
directly compared to national data. Baltimore's code enforcement
department tracks vacant properties through its code violation system,
and officials stated that city housing inspectors have identified
16,000 long-term vacant properties--many or most of which were vacant
prior to the foreclosure crisis that began between 2005 and 2006--that
the city considers unattended and blighted. Chicago's Department of
Buildings has a vacant buildings listing of 18,000 properties.
[Footnote 21] The Department of Metropolitan Development in
Indianapolis used a combination of data sources to estimate that the
city and the county in which it resides had between 9,000 and 10,000
vacant, abandoned properties as of 2010.[Footnote 22] In Cleveland,
the city's code enforcement department conducts an annual door-to-door
survey to count vacant properties, with its 2010 survey finding at
least 7,000 vacant, distressed structures. In Detroit, a
nongovernmental organization conducted a citywide survey of vacant
properties and land, in which surveyors found that the city had
approximately 67,000 vacant parcels as of 2009 and nearly 30,000
vacant single family homes.
A Variety of Factors is Associated With the Increase in Vacant
Properties:
Local officials and representatives of community groups pointed to the
recent large number of foreclosures, high unemployment levels and, in
some cities, population declines as factors contributing to the recent
increase in vacant properties that may cause problems in their areas.
Local officials and community representatives in Detroit and
Cleveland, for example, stated that the foreclosures that began to
increase in their cities in 2005 and 2006, and that are continuing,
have substantially increased the already large number of vacant
properties in their cities. Officials in Tucson and those in the Las
Vegas area stated that they did not have difficulty managing the
vacant properties in their cities prior to the surge in foreclosures
that began in 2006. Representatives of several community groups in
Baltimore stated that foreclosures had contributed to the city's
overall vacancy problem, although city government officials stated
that the city's inventory of long-term, problem vacant properties was
due more to population decline than a surge in foreclosures.
Available data also indicate that high foreclosure rates are
correlated to increased numbers of vacant properties. For example,
states with high foreclosure rates in 2010, according to Mortgage
Bankers Association data, also had relatively large increases in the
numbers of vacancies as of April 2010, according to Census data (see
figure 4). Comprehensive data are not available on the number of
properties in foreclosure that are vacant. However, representatives of
some servicers and the GSEs told us that between 10 percent and 20
percent of the properties with loans in their portfolios are vacant at
the time they initiate foreclosure; by the date of the completion of
the foreclosure sale, they said, about 40 percent to 50 percent of
properties are vacant. As we previously reported, local and state
officials, community groups, and academics told us that borrowers may
be confused about their rights to remain in their homes during
foreclosure and vacate the home before the process is completed.
[Footnote 23] In addition, properties that have completed foreclosure
generally become vacant prior to resale. According to representatives
at HUD, for example, which had an inventory of 51,000 residential,
single-family properties that it acquired as a result of foreclosures
on FHA-insured loans at the end of fiscal year 2010, FHA-insured
lenders are required to convey foreclosed properties to HUD unoccupied
to facilitate resale. A nongovernmental organization in Chicago
conducted additional surveys and research on the 18,000 properties in
the Chicago Department of Buildings' list of vacant buildings and
found that about 13,000 were associated with a foreclosure between
2006 and the first half of 2010.[Footnote 24] Figure 4 indicates that
many of the states with large increases in vacant properties between
2000 and 2010 also had high unemployment rates as of December 2010, as
well as a relatively large percentage of loans in foreclosure. Nine
states ranked in the top 20 for all three indicators.
Figure 4: The Change in Vacant Properties between 2000 and 2010, and
Percentage of Loans in Foreclosure and Unemployment Rates as of
December 2010, by State:
[Refer to PDF for image: illustrated horizontal bar graph]
United States:
Percentage change in nonseasonal vacancies 2000-2010: 51.2
Unemployment rate as of December 2010: Rank: 9.4
Percentage of loans in foreclosure as of end of December 2010: 4.64%.
Nevada[A]:
Percentage change in nonseasonal vacancies 2000-2010: 126.3%;
Rank: 1;
Unemployment rate as of December 2010: 14.9%;
Rank:
Percentage of loans in foreclosure as of end of December 2010: 10.12%.
Rank:
Minnesota:
Percentage change in nonseasonal vacancies 2000-2010: 99.8%;
Rank: 2;
Unemployment rate as of December 2010: 6.9%;
Rank: 40;
Percentage of loans in foreclosure as of end of December 2010: 3.09%.
Rank: 32.
New Hampshire:
Percentage change in nonseasonal vacancies 2000-2010: 99.3%;
Rank: 3;
Unemployment rate as of December 2010: 5.6%;
Rank: 48;
Percentage of loans in foreclosure as of end of December 2010: 2.73%.
Rank: 35.
Arizona[A]:
Percentage change in nonseasonal vacancies 2000-2010: 91.8%;
Rank: 4;
Unemployment rate as of December 2010: 9.6%;
Rank: 14;
Percentage of loans in foreclosure as of end of December 2010: 5.68%.
Rank: 5.
Florida[A]:
Percentage change in nonseasonal vacancies 2000-2010: 89.5%;
Rank: 5;
Unemployment rate as of December 2010: 12%;
Rank: 3;
Percentage of loans in foreclosure as of end of December 2010: 14.21%.
Rank: 1.
Georgia:
Percentage change in nonseasonal vacancies 2000-2010: 87.6%;
Rank: 6;
Unemployment rate as of December 2010: 10.4%;
Rank: 8;
Percentage of loans in foreclosure as of end of December 2010: 3.56%.
Rank: 21.
Michigan[A]:
Percentage change in nonseasonal vacancies 2000-2010: 85.2%;
Rank: 7;
Unemployment rate as of December 2010: 11.1%;
Rank: 5;
Percentage of loans in foreclosure as of end of December 2010: 4.27%.
Rank: 12.
Colorado:
Percentage change in nonseasonal vacancies 2000-2010: 78.4%;
Rank: 8;
Unemployment rate as of December 2010: 8.9%;
Rank: 25;
Percentage of loans in foreclosure as of end of December 2010: 2.52%.
Rank: 38.
Rhode Island[A]:
Percentage change in nonseasonal vacancies 2000-2010: 77.6%;
Rank: 9;
Unemployment rate as of December 2010: 11.5%;
Rank: 4;
Percentage of loans in foreclosure as of end of December 2010: 4.19
Rank: 13.
Massachusetts:
Percentage change in nonseasonal vacancies 2000-2010: 72.2%;
Rank: 10;
Unemployment rate as of December 2010: 8.3%;
Rank: 29;
Percentage of loans in foreclosure as of end of December 2010: 3.28%.
Rank: 26.
California[A]:
Percentage change in nonseasonal vacancies 2000-2010: 68.8%;
Rank: 11;
Unemployment rate as of December 2010: 12.5%;
Rank: 2;
Percentage of loans in foreclosure as of end of December 2010: 4.48%.
Rank: 11.
Wisconsin:
Percentage change in nonseasonal vacancies 2000-2010: 60.8%;
Rank: 12;
Unemployment rate as of December 2010: 7.5%;
Rank: 37;
Percentage of loans in foreclosure as of end of December 2010: 3.64%.
Rank: 18.
Ohio[A]:
Percentage change in nonseasonal vacancies 2000-2010: 60.6%;
Rank: 13;
Unemployment rate as of December 2010: 9.5%;
Rank: 18;
Percentage of loans in foreclosure as of end of December 2010: 4.95%.
Rank: 8.
Illinois:
Percentage change in nonseasonal vacancies 2000-2010: 56.3%;
Rank: 14;
Unemployment rate as of December 2010: 9.2%;
Rank: 21;
Percentage of loans in foreclosure as of end of December 2010: 6.53%.
Rank: 4.
Idaho[A]:
Percentage change in nonseasonal vacancies 2000-2010: 53.8%;
Rank: 15;
Unemployment rate as of December 2010: 9.7%;
Rank: 12;
Percentage of loans in foreclosure as of end of December 2010: 3.59%.
Rank: 19.
Indiana[A]:
Percentage change in nonseasonal vacancies 2000-2010: 52.8%;
Rank: 16;
Unemployment rate as of December 2010: 9.5%;
Rank: 17;
Percentage of loans in foreclosure as of end of December 2010: 4.78%.
Rank: 9.
North Carolina:
Percentage change in nonseasonal vacancies 2000-2010: 52.5%;
Rank: 17;
Unemployment rate as of December 2010: 9.8%;
Rank: 11;
Percentage of loans in foreclosure as of end of December 2010: 2.56%.
Rank: 36.
Virginia:
Percentage change in nonseasonal vacancies 2000-2010: 52.2%;
Rank: 18;
Unemployment rate as of December 2010: 6.6%;
Rank: 43;
Percentage of loans in foreclosure as of end of December 2010: 2.03%.
Rank: 44.
Tennessee:
Percentage change in nonseasonal vacancies 2000-2010: 52%;
Rank: 19;
Unemployment rate as of December 2010: 9.4%;
Rank: 19;
Percentage of loans in foreclosure as of end of December 2010: 2.53%.
Rank: 37.
Delaware:
Percentage change in nonseasonal vacancies 2000-2010: 50.8%;
Rank: 20;
Unemployment rate as of December 2010: 8.5%;
Rank: 27;
Percentage of loans in foreclosure as of end of December 2010: 4.18%.
Rank: 14.
Sources: Mortgage Bankers Association, Bureau of Labor Statistics,
2000 and 2010 Census.
[A] State ranked in the top 20 for all three indicators.
Note: This table shows the percentage change between 2000 and 2010 in
the number of vacant properties, the unemployment rate (seasonally
adjusted) as of December 2010, and the percentage of loans in
foreclosure as of the end of the fourth quarter of 2010. The national
percentage of loans in foreclosure includes Puerto Rico; the rankings
do not.
[End of figure]
The length of the foreclosure process, from initiation of foreclosure
to eventual resale and reoccupation, may also contribute to increased
vacancy rates because borrowers may leave their properties during the
process. In some cases, the longer a foreclosure takes, the more
likely a property is to become vacant or remain so, according to
community and servicer representatives (see figure 5). Foreclosure
timelines are affected by the type of procedures states use to conduct
foreclosures. States generally follow one of two methods for their
foreclosure process: judicial, with a judge presiding over the process
in a court proceeding, or statutory (nonjudicial), with the process
proceeding outside the courtroom in accordance with state
law.[Footnote 25] A research study by Federal Reserve Board staff
found that borrowers in nonjudicial states left their homes sooner
after the start of the foreclosure process than borrowers in judicial
states.[Footnote 26] States with judicial foreclosure processes, such
as New York, New Jersey, and Florida, generally have longer
foreclosure timelines; these longer timelines can contribute to
foreclosure-related vacancy levels in those states because the longer
the process takes, the more likely borrowers are to leave their homes.
Redemption periods that allow borrowers time after foreclosure to pay
to reclaim their homes can also prolong the time that a foreclosed
property is vacant. According to information from an association of
mortgage banking law firms, redemption periods range from 10 days in
New Jersey to over 6 months in South Dakota.
Figure 5: Example Timeline of the Foreclosure Process and Potential
Periods of Vacancy:
[Refer to PDF for image: illustration]
Home occupied, and original owner makes payments:
Delinquency begins/loss mitigation:
Job loss hardship.
3 months (90 days):
1) Foreclosure initiated by bank:
10%-20% are vacant.
4 months (128 days):
2) Foreclosure judgment by Court:
2 months (63 days):
3) Foreclosure sale:
40%-50% are vacant.
Potential vacancy period
1-3) Nonjudicial process takes half this time period on average (3
months/95 days).
Redemption period:
3 months (88 days).
6 months (181 days):
Property sold;
Most are vacant.
Sources: GAO (analysis); Art Explosion (images); U.S. Foreclosure
Network and HUD (timelines); HUD, government-sponsored enterprises,
and mortgage servicers (percentage of properties vacant at each stage
of the foreclosure process).
[End of figure]
No comprehensive data are available on the duration of the foreclosure
process or the length of time a property that has completed
foreclosure remains vacant before being reoccupied; however, available
information from various sources indicates that the amount of time can
be significant. For example, according to GSE data, the time between
the date the servicer received the last mortgage payment, and the date
of the foreclosure sale, ranged from 423 days on average from 2010
through the second quarter of 2011 to 453 days on average for the
first 3 quarters of October 2011. These averages varied by state,
ranging from just under a year in Michigan to around 2 years in New
Jersey and Vermont). Recent events and legislative changes may have
contributed to the length of these foreclosure timelines. According to
one report, some states have extended the length of the foreclosure
process in order to provide more opportunities for homeowners to avoid
foreclosure in response to the 2007 crisis. [Footnote 27] In addition,
we have previously reported that moratoriums on foreclosures due to
improper foreclosure documentation problems at several servicers in
2010, and resulting delays due to increased judicial demands, have
stalled foreclosures in some states.[Footnote 28] Following the
foreclosure sale, according to HUD data, HUD-owned properties spent an
average of 181 days in HUD's inventory in fiscal year 2010 before they
were sold. In addition, a recent research paper by an economist at the
Federal Reserve Bank of Cleveland found that in Cuyahoga County, Ohio,
which encompasses Cleveland, homes sold through a foreclosure sale had
high vacancy rates immediately thereafter and were more likely than
homes sold through ordinary transactions to be vacant up to 60 months
after the foreclosure was completed.[Footnote 29]
In the current environment, the length of time that a foreclosed home
may be vacant has likely increased because overall housing demand is
significantly lower than earlier in the decade as reflected in a
variety of housing market indicators, according to government and
academic analyses. For example, home sales have declined significantly
in recent years, according to an analysis of two industry estimates,
which estimated that home sales at the end of 2010 were significantly
below 2005 levels.[Footnote 30] Another indicator of low demand for
housing is the decline in home prices, as reflected in two widely used
indexes of house prices.[Footnote 31] These price indexes show that
national house prices declined between 2006-2007 and 2010.[Footnote
32] For example, according to a 2011 analysis of one index, house
prices declined an estimated 29 percent nationwide between 2006 and
October 2010.[Footnote 33] In addition, an academic research institute
noted in a recent analysis that vacancy levels may be relatively high
in part because the number of new households formed in the country
appears to have been significantly lower over the 2005 to 2010 period
than it was in the 2001 to 2005 period.[Footnote 34] Further,
community representatives we interviewed in two cities noted that some
residents cannot afford homeownership, or are not being approved for
mortgage loans, no matter what the selling price.
Recent economic conditions, including the high rate of unemployment,
have contributed to an increase in foreclosures and a decrease in
housing demand and, as a result, may be contributing to the increase
in vacant properties and the length of time properties on the market
remain vacant in some localities. Local officials and community groups
in Cape Coral, Las Vegas, and Tucson, for example, stated that many
property owners who have gone through foreclosure in the last 2 years
cited unemployment as the reason that they were having trouble meeting
their mortgage payments. As shown in figure 4 above, 9 of the 20
states with the greatest increases in vacant properties between 2000
and 2010 also were among the 20 states with the largest percentage of
loans in foreclosure, and had unemployment rates that exceeded the
national rate, as of the end of December 2010. Unemployed residents
may be unable to afford mortgage payments, property maintenance and
repair costs, and local property taxes, and may abandon a property as
a result. Residents without mortgages may also be unable to pay
maintenance costs. For example, one local official in Indianapolis
stated that some vacant properties in that city were vacated by owners
who, although they may not have had mortgages, were unable to pay
local property taxes or afford the maintenance on their homes.
Another factor that can increase the prevalence of vacant properties
is the extent to which they are owned by investors rather than
homeowners. Investors are frequent purchasers of foreclosed homes in
certain cities, including Cape Coral, Cleveland, Las Vegas, and
Tucson, according to local officials and community group
representatives. Investors tend to try to resell properties quickly or
rent them out, according to some of these representatives. Some
investors may not invest in the properties or respond to code
violations if they will not be able to recoup their investments by
renting or selling the properties. High foreclosures or poor economic
conditions may affect the ability of investors to resell properties or
to find qualified tenants who can pay rent. Investors may decide to
leave properties vacant if they are unable to sell them or to rent
them to a qualified tenant or may abandon them completely. Although
comprehensive data are not available, HUD data indicate that about
30,000 of the approximately 88,000 foreclosed HUD-owned properties
sold in fiscal year 2010 were sold to investors, as opposed to owner-
occupants.
In certain cities, local officials also pointed to population declines
as a contributing factor to increased vacancies. In Cleveland and
Detroit, for example, the population has declined substantially over
the past decade, according to Census data (see table 2).
Table 2: Population in Selected Cities and Percentage Increase in
Nonseasonal Vacancies, 2000 and 2010:
City: Tucson, Arizona;
Percentage increase in number of nonseasonal vacant properties, 2000-
2010: 57.8;
Population 2000: 486,699;
Population 2010: 520,116;
Population change: 33,417;
Change (%): 6.9.
City: Indio, CA;
Percentage increase in number of nonseasonal vacant properties, 2000-
2010: 200.6;
Population 2000: 49,116;
Population 2010: 76,036;
Population change: 26,920;
Change (%): 54.8.
City: Cape Coral, Florida;
Percentage increase in number of nonseasonal vacant properties, 2000-
2010: 455.4;
Population 2000: 102,286;
Population 2010: 154,305;
Population change: 52,019;
Change (%): 50.9.
City: Chicago, Illinois;
Percentage increase in number of nonseasonal vacant properties, 2000-
2010: 60.2;
Population 2000: 2,896,016;
Population 2010: 2,695,598;
Population change: -200,418;
Change (%): -6.9.
City: Indianapolis, Indiana;
Percentage increase in number of nonseasonal vacant properties, 2000-
2010: 48.8;
Population 2000: 781,870;
Population 2010: 820,445;
Population change: 38,575;
Change (%): 4.9.
City: Baltimore, Maryland;
Percentage increase in number of nonseasonal vacant properties, 2000-
2010: 11.4;
Population 2000: 651,154;
Population 2010: 620,961;
Population change: -30,193;
Change (%): -4.6.
City: Detroit, Michigan;
Percentage increase in number of nonseasonal vacant properties, 2000-
2010: 107.9;
Population 2000: 951,270;
Population 2010: 713,777;
Population change: -237,493;
Change (%): -25.0.
City: Las Vegas, Nevada;
Percentage increase in number of nonseasonal vacant properties, 2000-
2010: 137.4;
Population 2000: 478,434;
Population 2010: 583,756;
Population change: 105,322;
Change (%): 22.0.
City: Cleveland, Ohio;
Percentage increase in number of nonseasonal vacant properties, 2000-
2010: 62;
Population 2000: 478,403;
Population 2010: 396,815;
Population change: -81,588;
Change (%): -17.1.
Sources: Census 2000, 2010.
[End of table]
The population in Cleveland declined by 17 percent between 2000 and
2010, and the population of Detroit declined 25 percent. Community
group representatives in Baltimore, another city with a decline in
population, told us that these reductions in population have left
fewer residents to maintain the existing supply of properties. Some of
these properties are as much as 100 years old or require more
maintenance. A community representative stated that these older houses
are expensive to maintain and lack amenities such as garages. Some
officials we spoke with in these cities stated that, for economic
reasons, the populations of these cities were unlikely to increase in
the future. As a result, the cities were likely to have many long-term
vacant properties that would have to be demolished.
Improperly Maintained Vacant Properties Create Costs and Other
Problems for Neighborhoods and Local Governments:
Local Standards Mandate Maintenance of Properties, but Concerns about
Legal Barriers Can Limit Mortgage Servicers' Maintenance Activities:
Local governments and communities have various standards in place for
property maintenance, but homes that become vacant can create problems
for their communities if not properly maintained. Local governments
have a wide array of building, housing, and property maintenance codes
that establish standards for the appearance and safety of properties.
For example, uniform building, fire, and property maintenance codes
that have been implemented across the country contain special
provisions for the maintenance of dangerous buildings--those that pose
threats to the public health, safety, and welfare, such as structural
insecurity.[Footnote 35] Within local communities, code enforcement
departments are largely responsible for helping ensure that homeowners
maintain their properties in accordance with these codes. Code
enforcement departments can typically issue fines for code violations
or take actions themselves, such as making repairs, removing debris,
covering windows and doors to secure properties, or even demolishing
them, if needed, and bill the responsible party for the costs
incurred.[Footnote 36] Although homeowners are expected to maintain
their properties to prevent them from becoming hazardous or negatively
impacting surrounding property values, they may vacate their homes
during the foreclosure process and, if the properties are not properly
maintained, they can create problems for their communities. In these
cases, code enforcement departments may turn to other parties with an
interest in the property, such as the mortgage holder or the mortgage
servicer, to resolve the code violation.
Servicer representatives and other industry participants said that
although homeowners are responsible for maintaining their properties,
the mortgage servicers that administer home loans, including
initiating foreclosures if loans become delinquent, have the right,
but not the obligation, to take on this responsibility for properties
that are vacant during the foreclosure process. For example, they said
that mortgage security agreements--which document that the home is the
collateral for the home loan obligation and can be foreclosed upon and
sold by the mortgage owner if the loan is not repaid--typically
provide that the mortgage owner or the servicer contractually acting
on the mortgage owner's behalf has the right to take various actions
intended to preserve the value of the collateral. In particular, many
home loans are sold to the GSEs, Fannie Mae and Freddie Mac, and the
uniform mortgage documents associated with these loans provide that
whether or not a borrower is living in a property, the borrower is
expected to maintain the property in order to prevent it from
deteriorating or decreasing in value due to its condition. The GSE
documents also state that if a borrower fails to maintain the property
or abandons it, the servicer--acting on behalf of the mortgage owner--
may do reasonable and appropriate maintenance to protect the lender's
interest in the property, such as securing it. GSE representatives
said that this right to maintain a property is intended to allow the
servicer to preserve the value of the property serving as the
collateral for the loan as a way of maximizing the proceeds recovered
through an eventual sale of the property to another party. According
to the uniform GSE mortgage document, the types of maintenance that
fall under this clause could include entering the property to make
repairs, changing locks, replacing or boarding up doors and windows,
draining water from pipes, eliminating building or other code
violations or dangerous conditions, and having utilities turned on or
off. Although servicers may take these actions under the mortgage
document, they are not obligated to do so under GSE uniform mortgage
documents. In addition, GSE officials indicated that some state
trespass laws may contradict servicers' rights to access a property
for the purposes of preservation and protection under the mortgage
documents and that this right has been challenged in court.
For loans in foreclosure being serviced on behalf of the GSEs and FHA,
servicer representatives said that they conduct maintenance on vacant
and abandoned properties in accordance with those entities' property
preservation and protection guidelines. For example, the GSEs'
requirements for their servicers provide generally that servicers must
be in compliance with local laws, such as local ordinances related to
the maintenance of vacant and abandoned properties. Their guidance
also provides that servicers should inspect properties as soon as they
become aware they might be vacant and then every 30 days, or more
frequently if the property is located in an area with a high rate of
vandalism. In addition, they are expected to secure vacant properties
to protect them from waste, damage, and vandalism and to protect their
value. For example, the Fannie Mae servicing guidelines state that the
servicer is responsible for performing all property maintenance
functions, including mowing the grass, removing trash and other debris
that violate applicable law or pose a health or safety hazard, and
preparing the property for winter, among other things. Similarly, FHA
guidelines require servicers to inspect vacant properties at least
every 25 to 35 days, secure and protect the properties to prevent
unauthorized entry, and protect against weather-related damage. FHA
staff said that once properties are conveyed to the agency, they are
inspected every 2 weeks. FHA also has specific guidelines on
maintenance, such as how to secure properties by covering doors and
windows with boards if needed, how often the grass should be cut, and
what steps to take to prevent water pipes from freezing during winter
months.
Servicer representatives said that for loans they own or are servicing
on behalf of a private securitization trust--which are organized by
financial institutions rather than the GSEs and do not have a
government guarantee--and sold to investors, they follow the pooling
and servicing agreements of these trusts and their own policies.
[Footnote 37] These agreements and policies largely call for them to
take steps similar to those required by the GSEs and FHA to maintain
properties. In addition, the servicers may have other policies they
follow for these properties. For example, representatives of one
servicer stated that the company recently implemented a policy to
maintain properties "at or above community standards." Staff of
another servicer told us that their focus during the foreclosure
period was on mitigating any public safety issues with the property,
such as a gas leak, and on remaining in compliance with local codes on
lawn maintenance. Servicer representatives generally said that their
goal during the preforeclosure period was to keep properties secure
and prevent further damage and code violations.
Servicers that manage loans going through foreclosure on behalf of
different loanholders incur various costs to maintain properties not
otherwise being maintained by the homeowners. The owner or insurer of
the loans typically reimburses servicers for most of these costs after
the foreclosure process is completed. For example, table 3 shows the
property maintenance costs incurred during the foreclosure process for
which the GSEs reimbursed servicers in 2010.[Footnote 38] Our analysis
shows that the vast majority of the costs were incurred following the
foreclosure sale. Prior to the foreclosure, the GSEs reimbursed
servicers $235 per property, on average, for maintenance-related
expenses prior to the foreclosure sale. According to data from one of
the GSEs, almost half of the expenses during the preforeclosure period
were for yard maintenance and securing properties.
Table 3: GSEs' Reimbursements to Servicers and Payments to Vendors for
Maintenance Costs Incurred Prior to and Following Foreclosure Sale,
2010:
2010:
Preforeclosure;
Total properties: 482,901;
Total spent: $113,568,550;
Average per property: $235.
Postforeclosure;
Total properties: 481,756;
Total spent: $839,973,900;
Average per property: $1,744.
Total 2010;
Total properties: NA;
Total spent: $953,542,450;
Average per property: NA.
Source: GAO analysis of GSE data.
Note: The totals for the number of properties in each category
represent the unique number of properties that moved into each
category during the year. The numbers cannot be totaled because
properties moved into and out of the categories during the year, may
have been in both during the year, and may have spent different
lengths of time in each category.
[End of table]
Compared to the GSEs, FHA requires servicers to conduct additional
maintenance, including removal of interior debris, to bring a property
into "broom-swept" condition before transferring, or conveying, the
property to the agency.[Footnote 39] This type of maintenance is
typically done in the postforeclosure sale period on other properties.
Therefore, FHA's preconveyance reimbursements to servicers are higher
than GSE preforeclosure reimbursements. As shown in table 4, FHA
reimbursed servicers about $1,982 per property for maintenance-related
expenses prior to conveyance to FHA in 2010.[Footnote 40] As discussed
above, liability concerns associated with conducting maintenance
during the preforeclosure period are a significant reason for this
difference, according to GSE representatives.
Table 4: FHA Reimbursement to Servicers and Contractors for
Maintenance Costs Incurred Prior to and Following Conveyance, 2010:
2010:
Preconveyance;
Total properties: 89,214;
Total spent: $176,828,704;
Average per property: $1,982.
Postconveyance;
Total properties: 165,105;
Total spent: $38,568,420;
Average per property: $234.
Total 2010;
Total properties: NA;
Total spent: $215,397,124;
Average per property: NA.
Source: GAO analysis of FHA data.
Note: The totals for the number of properties in each category
represent the unique number of properties that moved into each
category during the year, but cannot be totaled because properties
moved into and out of the categories and some properties may have been
in both during the year and may have spent different lengths of time
in each category. In addition, the preconveyance total spent does not
include subsequent adjustments of 1 to 5 percent due to file reviews.
[End of table]
The states with the highest per property maintenance costs were
generally those that follow a judicial foreclosure process, where a
judge presides over the process in a court proceeding. Because of the
additional legal work, foreclosure generally takes longer to complete
in these states; therefore, maintenance may be more costly because it
is required for longer periods of time.
Following the foreclosure sale, ownership of a property transfers to
the purchaser and, in some cases, servicers may no longer have
responsibility for maintaining properties. Properties that servicers
were managing on behalf of the GSEs are transferred to the GSEs if no
third party steps in to purchase the home at the foreclosure sale. If
a GSE purchases a property at foreclosure, commonly referred to as
REO, the GSEs manage the maintenance, marketing, and subsequent sale
of these properties. As shown in table 3, in 2010, the GSEs spent on
average $1,744 per property and a total of $953 million for
maintenance on REO properties.[Footnote 41] Most of the
postforeclosure costs were for trash removal and yard maintenance (see
figure 6).
Figure 6: GSEs' Property Maintenance Costs Paid on Properties for
Which They Assumed Ownership through Foreclosure, 2010:
[Refer to PDF for image: pie-chart]
Boarding, securing: 6% ($50,077,806);
Repair, hazard, emergency repairs, demolition: 6% ($52,016,070);
In section, vacant property registration, and other costs: 10%
($84,014,674);
Utilities: 13% ($108,211,558);
Yard maintenance: 30% ($249,296,452);
Trash removal and cleaning: 35% ($296,357,249).
Source: GAO analysis of GSE data.
Note: Trash removal and cleaning costs may include initial property
cleaning and automobile removal. Yard maintenance costs may include
tree removal, snow removal, temporary sprinkler system.
[End of figure]
Servicers no longer have responsibility for maintaining properties
that served as collateral for FHA-insured mortgages once they convey
them to FHA following a foreclosure sale at which no third party
purchases the home, and any state redemption period expires. Once
servicers convey properties to FHA, the agency has management and
marketing contractors that conduct property maintenance. In 2010, FHA
reimbursed these contractors, on average, $234 per property and a
total of about $38 million for maintenance on REO properties (see
table 4). Most of these expenses were for repairs, such as roofing,
mold abatement, lead-based paint removal, and utilities (see figure 7).
Figure 7: Types and Amounts of FHA Property Maintenance Costs Paid to
Contractors Post Conveyance, 2010:
[Refer to PDF for image: pie-chart]
Repair/hazard/emergency costs: 49% ($19,101,650);
Other: 30%; ($11,543,154);
Utilities: 18% ($6,891,193);
Demolition: 1% ($434,275);
Yard maintenance: 1% ($300,162);
Trash removal: 1% ($261,299);
Boarding/securing: 0% ($36,687).
Source: GAO analysis of GSE data.
Note: Repair/Hazard/Emergency costs include lead paint removal and
related costs, abatement of mold and damage resulting from a home
being used to produce methamphetamine, roofing repairs, system checks
and repairs, and other general or miscellaneous repairs. Other costs
include costs for appliances, termite treatment, window or door bar
removal, winterizing, and other miscellaneous costs.
[End of figure]
In cases in which servicers are administering a foreclosure of a loan
that they own or are servicing on behalf of a private-label
securitization trust, the servicers are obligated to maintain the
property if it is not sold to a third party following a foreclosure
sale because they become (or, in the case of a securitization trust
are acting on behalf of) the new legal owner.[Footnote 42] When they
take possession of a property after a foreclosure sale, servicer
representatives reported that they may conduct work on the property
beyond preservation and protection to increase its market value and
therefore recover more proceeds from its subsequent sale. For example,
in addition to the exterior maintenance activities, they may conduct
more serious repairs, such as to the roof or foundation, as well as
interior maintenance or other cosmetic changes, such as painting or
replacing carpet and appliances.
Though most of the servicers we interviewed told us they do their best
to meet local requirements and acknowledged that their organizations
had the right to act to preserve the collateral value of vacant
properties on which they are initiating foreclosure proceedings, local
government officials said that servicers may not be providing the
levels of maintenance that communities expect in some cases. For
example, servicers typically conduct periodic inspections of
properties throughout the delinquency, foreclosure, and REO periods
and may arrange for maintenance work, if necessary, as a result of
inspectors' observations. However, staff from one servicer noted that
vandalism or other damage to a property could occur between these
inspections. In addition, some servicer and GSE representatives told
us that, prior to a foreclosure sale, servicers are reluctant to enter
properties or conduct interior maintenance unless the problem would
cause further deterioration of the property, such as a leaking water
pipe, because they are not the owners and could be accused of
trespassing or held liable for anything that was removed from the
property.[Footnote 43] Further, because servicers are required under
the GSE or HUD guidelines to seek approval for certain unusually
expensive or complicated repairs that would cost more than specific
dollar thresholds, they may not always act immediately to resolve such
problems. Obtaining the necessary approvals to conduct work that
exceeds the allowed amounts under the servicing guidelines can take
time and, in some cases, such requests are denied. For example,
according to HUD officials the agency considers federal laws and
regulations to supercede local laws and ordinances. Therefore, while
they said that foreclosed properties in the agency's inventory are
generally in compliance with local laws and ordinances, the agency may
exercise its discretion to use less costly methods than the locality
requires. Another reason servicers might not be maintaining properties
in foreclosure up to the expectations of localities is that they have
decided to abandon the foreclosure process on the property because the
expected proceeds from the sale of the property would not cover the
costs of foreclosure. Because a foreclosure sale never occurred on
these properties, the borrowers remain the legal owners even though
they may no longer live in the properties. In these abandoned
foreclosure cases, representatives of four out of the five servicers
we interviewed said they would not continue to incur costs for
maintaining the properties.[Footnote 44] In a recent report, we found
that abandoned foreclosures were particularly prevalent on low-value
properties and in distressed urban areas such as Detroit, Chicago,
Cleveland, and Indianapolis.[Footnote 45]
Following a foreclosure sale, servicers also may be limited in their
actions on a property despite local expectations because of any state
redemption periods. In some states, the purchaser of a property does
not have full rights to it immediately after the foreclosure sale.
Some states allow borrowers additional time--called redemption
periods--following the foreclosure sale to live in the home and pay
off the remaining amount of the mortgage and foreclosure expenses.
These redemption periods can last from 10 days to 6 months, depending
on state laws, according to information from an association of
mortgage servicing law firms. Because the previous homeowner could
continue to occupy the home and may regain rights to the property by
repaying the outstanding debt during these periods, servicers
typically wait for the redemption period to expire before conducting
any repairs or marketing a property for sale. However, according to
representatives of two servicers, they typically would conduct
maintenance, such as cutting the grass, on a vacant property during
the redemption period.
Unattended Vacant Properties Impose Costs on Local Governments and
Communities and Reduce Revenues:
When homeowners, entities that have assumed ownership of properties
through foreclosure, or mortgage servicers do not maintain vacant
properties, or when vacant properties are not maintained sufficiently
to comply with local building or public safety standards, local
governments expend millions of dollars in direct costs to mitigate the
problems such properties may cause. As discussed earlier, many
properties in foreclosure are vacant. For example, a recent study of
vacant properties in Chicago found that 69 percent of the over 18,000
vacant properties registered with the city were associated with a
foreclosure filed between 2006 and the first half of 2010.[Footnote
46] In such cases, code enforcement departments may issue fines to
homeowners or lien holders for code violations or bill them for work
the city did to mitigate the violation. In other cases, an unattended
vacant property may not have a mortgage or ownership may be unclear;
therefore, the city likely would have to incur the cost of any work
done on the property. For example, according to an official in the
city of Newark, banks were responsible for only 15 to 20 percent of
the 400 buildings identified as vacant in 2007.
According to local officials in the nine localities we analyzed, the
local governments have incurred significant costs to address vacant
properties within their communities. These costs were spent on tasks
including boarding up and securing properties, mowing lawns, draining
pools, and removing debris. Specific costs and amounts local
government officials reported spending in 2010 include the following:
* Exterior maintenance: Minimizing the negative or hazardous impact of
vacant properties by boarding up and securing such properties can cost
between $233 and $1,400 per property in some cities. Chicago officials
estimated that they spent about $875,000 to board up 627 properties in
2010. Detroit building officials estimated the cost of boarding up
6,000 structures since June 2010 at $1.4 million. Officials in several
communities we studied also said they expended resources to mow uncut
lawns, including about $300 per property in Indianapolis, although
code enforcement department officials in Cape Coral noted they had
eliminated some costs by enlisting community volunteers to mow the
lawns of vacant properties. A Detroit official estimated that the city
spends $25 per property for each lawn mowing on its 40,000 city-owned
vacant lots and roughly 5,000 city-owned properties. Figure 8 shows
examples of a boarded-up property in Chicago and an unsecured, vacant
property in Detroit.
Figure 8: Examples of Vacant Properties in Chicago and Detroit:
[Refer to PDF for image: 2 photographs]
Vacant row houses in Chicago;
A vacant, unattended property in Detroit, Michigan.
Source: GAO
[End of figure]
Figure 9 shows a fire-damaged property in Henderson, Nevada, in the
Las Vegas area, on which foreclosure was pending as of August 2011.
Figure 95: Damaged Property in Henderson, Nevada:
[Refer to PDF for image: photograph]
A vacant property damaged by fire in Henderson, Nevada, near Las Vegas.
Source: City of Henderson, Nevada.
[End of figure]
* Demolition: Demolishing structures was another significant expense
that communities incurred to eliminate the impact of vacant
properties. The amounts spent on demolition varied by region and type
of property. Typical demolition costs of detached, single-family
properties in some cities ranged from $4,800 to $7,000 per property,
according to our interviews with local officials. Las Vegas officials
said the range of demolition costs was large--from $2,000 to $20,000-
depending on the size of the property and the extent of lead-based
paint or asbestos testing and removal needed on the property.
Depending on the number of properties demolished, the total amounts
spent in some cities were considerable. For example, Detroit has spent
about $20 million demolishing almost 4,000 properties since May 2009--
$5,000 per property. In Baltimore, local officials stated that their
housing stock consists largely of single-family row houses, which are
expensive to demolish individually. Row houses share walls in common,
and demolishing one row house may require rebuilding the wall dividing
the demolished property from one that remains standing. In addition,
several demolitions on a block can lead to what one housing expert
called a "sawtooth" effect, with vacant lots alternating with occupied
structures (see figure 10). Baltimore officials estimated that an
individual rowhouse could cost between $13,000 and $40,000 to
demolish, depending on the size and number of walls, and stated that
demolishing a row of several houses at once was often more strategic,
although doing so raised the overall cost of the demolition.
Figure 10: A Row House Next to a Vacant Lot in Baltimore, Maryland:
[Refer to PDF for image: photograph]
A row house next to a vacant lot in Baltimore, Maryland. Row houses
share walls in common and demolishing a single row house may require
rebuilding the shared wall, as shown here, which increases demolition
costs.
Source: GAO.
[End of figure]
In contrast, demolition of a single, freestanding structure may cost
far less. Figure 11 shows the demolition of a single family, detached
property in Indio, California, where the average cost to demolish a
property was $7,000-$9,000.
Figure 11: Demolition of a Single-family Property in Indio, California:
[Refer to PDF for image: 3 photographs]
Before (left), during (middle), and after (right) photos of detached
single-family property demolition in Indio, California.
Source: City of Indio, California.
[End of figure]
* Administrative and judicial costs: In addition to the costs of
maintaining and demolishing vacant properties, local governments bear
administrative costs of identifying parties responsible for vacant
properties in order to assess code violation fines or liens. Code
enforcement and other officials told us that it is often difficult to
locate the owners of vacant properties because owners have left their
homes; they also told us that it is difficult to locate current
mortgage lien holders or servicers who may have an interest in
maintaining the properties. Officials said that identifying lien
holders is difficult because such parties often fail to record changes
in ownership with local jurisdictions. As we previously reported, one
code enforcement department official we interviewed allocates a full-
time staff person to identifying parties responsible for vacant
properties.[Footnote 47] Cities that have dedicated housing courts,
such as Chicago and Cleveland, spend additional resources on enforcing
laws governing vacant properties through the judicial system.
According to a housing court judge in Cleveland, the budget for the
city's housing court is approximately $3 million.
Although some cities receive revenue from payment of code violations
or liens, as well as from other sources including federal funds, that
offset the costs of maintaining vacant properties, officials in most
of the cities we studied said that they struggled to pay for these
activities. As we previously reported, when local governments maintain
or demolish properties, they may place liens against the properties
for the associated costs.[Footnote 48] For example, Baltimore code
enforcement officials stated that the city's boarding and cleaning
costs total about $2 million per year, though the city recoups most of
this cost through liens placed on properties for these costs. Not all
of the cities we interviewed, however, were successful in collecting
on fines and liens. In Detroit, for example, an official stated that
the city has submitted $16 million in bills for boarding and has
received only $100,000 in payments. In addition to the difficulty
recouping costs through the collection of fines, in some
jurisdictions, liens may have low priority in the foreclosure process,
so that other debts are paid from the sale of the house before the
liens are paid. In one jurisdiction, code enforcement liens were wiped
out when the foreclosure was completed. Further, revenue from code
enforcement fines and liens may not be directly returned to code
enforcement departments but deposited into the locality's general fund.
Further, revenue from code enforcement liens and federal and other
sources together may be insufficient to pay for all of the necessary
activities, particularly large-scale demolition. Officials in
Baltimore, Detroit, and Chicago, in particular, stated that the
resources required to demolish the large number of long-term vacant
properties in those cities exceeds local budgets. Code enforcement
officials in Detroit and Chicago stated that they would use federal
funds for demolition. For example, Detroit received $21.3 million for
demolition-related activities as part of that city's NSP grants. As
noted earlier, Detroit spent $20 million to demolish almost 4,000
properties since May 2009, and the city had a backlog of 8,000
dangerous buildings that were approved for demolition as of May 2011.
A Detroit official said that the city generally demolished properties
only as funding became available. Chicago planned to use $1.9 million
from the city's NSP funds for demolition. Chicago officials stated
that all funding sources combined fall short of what is needed to
fully address the vacant property problem. Baltimore officials
estimated that the city would need approximately $180 million to
demolish the inventory of unsafe, unattended properties in the city.
One Detroit official stated that the city's budget lacks sufficient
resources to maintain the vacant properties for which the city itself
has assumed ownership up to its own building standards. Reductions in
local governments' budgets may also be hindering efforts to carry out
vacant-property-related enforcement activities. In Cleveland, for
example, the housing court's budget is scheduled to be cut by more
than 10 percent due to overall budget constraints.
Vacant properties also produce other costs that can be difficult to
quantify but also impose burdens on local governments and communities.
For example, vacant properties can produce increased public safety
costs related to code-enforcement, police, and fire services. Our past
work and interviews with representatives in the localities we studied
showed that vacant properties can be broken into and vandalized,
illegally occupied, or used by people engaging in criminal activities,
increasing the risk of fires or other public safety hazards. One code
enforcement official in the Las Vegas area stated that between four
and five calls per month are related to vacant property issues. Some
academic studies also have found relationships between vacant or
foreclosed properties and crime.[Footnote 49] In some cities, local
representatives stated that vandalism can occur within 24 hours of a
house becoming vacant. Officials from several cities stated that they
had encountered houses that had been stripped of copper pipes or
wiring or electrical systems or meters, air conditioning units or
furnaces, and appliances, among other things (see figure 12). A local
government official in the Las Vegas area stated that illegal
occupants in properties with utilities shut off could cause fires by
using alternative energy sources, such as propane tanks or candles. To
the extent that problems requiring the involvement of police, fire, or
code enforcement officials occur on properties in between servicers'
routine monthly inspections, properties that are otherwise maintained
can also impose increased costs on local governments. For example, one
community representative in Detroit stated that vandalism can occur in
both maintained and unattended properties. In addition, staff from a
property maintenance company told us as part of work we conducted for
our 2010 report, that in certain areas they had to resecure property
at every monthly inspection because the properties were constantly
broken into and vandalized.[Footnote 50] Measuring the effect of
increases in public safety costs as a result of unattended vacant
properties is difficult, however, because different city departments
are often involved, and many localities do not routinely track which
costs are related to vacant properties.
Figure 12: Examples of Interior Conditions of Vacant Properties in
Indio, California:
[Refer to PDF for image: 2 photographs]
A stripped electrical box and graffiti inside a vacant property in
Indio, California, in Riverside County.
Source: City of Indio, California.
[End of figure]
In addition to public safety costs, vacant properties reduce the
values of surrounding properties. A number of research studies have
attempted to quantify the effects of foreclosed and vacant properties
on surrounding areas and found that foreclosed and vacant properties
reduce values of neighboring occupied properties.[Footnote 51] A
review by a federal research organization that examined several
research papers on foreclosure impacts estimated a foreclosed home
within a neighborhood can depress the prices of nearby properties from
0.9 percent to up to 8.7 percent.[Footnote 52] Another study estimated
that, on a single block in a Chicago neighborhood, one foreclosed,
demolished property may have reduced the values of 13 surrounding
properties by $17,000 per property compared with the median house
price in Chicago.[Footnote 53] A recent study of the impact on sales
prices of vacant, tax-delinquent, and foreclosed properties in
Cuyahoga County, Ohio, between April 2010 and March 2011 found that a
vacant property within 500 feet of another property reduces that
property's price by approximately 0.7 percent.[Footnote 54] The study
also found that a foreclosed, vacant, and tax-delinquent property
reduces neighboring property prices by almost 10 percent. In addition,
the study estimated the loss to home sellers attributable to nearby
foreclosed, vacant, or tax delinquent properties and found that the
total value lost is approximately $76 million, with $23 million of the
loss attributable to properties that are both vacant and tax
delinquent. Another study that examined the impact on sales prices of
nearby foreclosed and vacant properties in Columbus, Ohio, found that
each vacant property within 250 feet of a nearby home could decrease
its sales price by about 3.5 percent.[Footnote 55] In addition, the
study, which accounted for differences in neighborhood
characteristics, found that the average sales price of properties
located nearest to homes that had experienced both foreclosure and
vacancy declined more than $8,600. Another analysis of the effects on
property values in Flint, Michigan, found that a vacant property could
reduce the value of surrounding homes by approximately 2.27 percent.
[Footnote 56]
Declines in property values associated with vacant properties and
unpaid taxes on vacant properties can lead to reduced property tax
revenue for local governments. According to the National League of
Cities, local property tax revenues are determined by the value of
residential and commercial property, based on property tax assessments
that the localities conduct.[Footnote 57] As discussed earlier,
property values have been declining nationwide in recent years, in
part because of the large numbers of foreclosures and the decline in
housing demand, which have depressed national house prices. As a
result, local property tax revenues declined 2 percent in 2010
compared with 2009 levels and likely will decline further in the next
few years as property tax assessments are adjusted to reflect falling
property values, according to a 2011 National League of Cities survey
of city finance officers from across the country.[Footnote 58] Lower
property values might also affect the amount of unpaid taxes cities
recoup from the sale of the property through the tax foreclosure
process because the property value might be lower than the taxes
owed.[Footnote 59] Local jurisdictions also sometimes directly lose
tax revenue from unattended vacant properties when property taxes owed
by the property owner go unpaid.[Footnote 60] Mortgage servicers
typically assume property tax payments on properties during the
mortgage foreclosure process, but if a vacant and abandoned property
does not have a mortgage, the city may lose tax revenue from that
property if it cannot be recouped through the tax foreclosure process.
Further, the city may end up assuming ownership of tax-foreclosed
properties, many of which can be vacant, if no other party acquires
the rights to them through the tax foreclosure process. In 2009,
according to the Wayne County, Michigan, treasurer's office, about
8,600 properties went through the tax foreclosure process. Of those,
7,000 were not acquired by other parties and, thus, reverted back to
the city of Detroit. The city will not receive tax revenue on these
properties unless it can sell them to new owners. In addition, local
jurisdictions lose the tax value of a property when a structure is
demolished.[Footnote 61]
Local officials we interviewed in several cities stated that property
taxes are an important source of revenue and that recent declines in
property tax revenues have led to reductions in government services.
[Footnote 62] For example, local officials in several of the nine
jurisdictions we studied stated that property tax revenue declines had
led to budget cuts and staff reductions within their code enforcement
departments. One jurisdiction provided information that showed that,
in spite of increases in the housing stock in the area, housing price
declines have resulted in its 2010 tax collections being equal to its
2006 levels, and an official from this jurisdiction stated that a
recent effort to coordinate a response to vacant foreclosed properties
was terminated because of budget constraints. An official in another
jurisdiction stated that property tax revenue had declined between 6
percent and 8 percent in recent years. Community group representatives
in a few cities stated that beyond code enforcement services,
foreclosures and declining property tax revenues contributed to cuts
of other local services, such as schools and recreational facilities.
The National League of Cities report also noted that cities had cut
personnel and city services such as public works, libraries, and parks
and recreation programs as a result of property tax and other revenue
declines. Further, a report on the costs of vacant properties in Ohio
found that, because of lost tax revenues from vacant properties, the
resources available to provide city services, in particular resources
to school districts, were limited.[Footnote 63]
The demand for and decline in availability of city services to deal
with vacant properties can combine with rising numbers of vacancies to
contribute to destabilizing communities, according to local community
representatives. Community group representatives in Chicago, Detroit,
Indianapolis, and Tucson stated that increases in vacant properties
contributed to neighborhood decline because a vicious cycle is created
in neighborhoods with rising numbers of foreclosed or vacant
properties. Our previous work and interviews with community
representatives indicated that because of the declines in values of
homes surrounding vacant properties, neighbors living nearby may have
difficulty refinancing their own homes and may go into foreclosure
themselves, leaving additional properties vacant.[Footnote 64]
Increases in crime related to vacant properties could also lead to
greater population loss and difficulties in neighborhood
revitalization strategies. Once a block or neighborhood contains a
critical number of vacant properties, the loss of population is likely
to continue, further undermining the investment in a community and
reducing the revenue base to support local services in those
neighborhoods. One local community representative stated that vacant
property problems can tip a neighborhood into decline and contribute
to a loss of neighborhood worth or spirit.
State and Local Government Strategies to Address Vacant Properties
Face Resource and Other Challenges:
The localities we studied are all engaged in multiple strategies to
try to minimize the costs and other negative impacts that vacant
properties create for their communities.[Footnote 65] The strategies
they choose to implement are based on the conditions of the local real
estate market and economy, as well as available resources, but their
effectiveness is also affected by these factors. Efforts range from
data-gathering efforts to more accurately identify vacant properties
to acquisition and rehabilitation or, in some cases, demolition of
abandoned properties. In addition, some localities have created
additional responsibilities for servicers and others to maintain
properties and have adjusted code enforcement regulations to create
greater incentives for property maintenance, as well as establishing
specialized housing courts to address vacant property and other
housing issues. These local government strategies face various
challenges, particularly the lack of sufficient financial and other
resources to effectively address the large scale of the problem, which
is exacerbated by the widespread declines in property tax revenues and
housing market values, as discussed earlier. As result, governments in
many of the communities we examined are reaching out to members of the
community--including neighborhood groups and private developers--in an
attempt to leverage all available resources and increase their
effectiveness. In addition, local governments have called for
increased federal funding and greater attention by federal regulators
to servicers' role in managing vacant properties.
In-Depth Data-Gathering Helps Local Governments Effectively Target
Resources:
Local officials are attempting to address problems associated with
vacant properties by engaging in a wide variety of data-gathering
efforts in order to understand the scope of vacant properties in their
jurisdictions, as the following examples show:
* Compiling and analyzing data from existing sources: Officials in
three of the cities we reviewed told us they collect and analyze data
from a variety of city departments--code enforcement, police, and
fire--as well as statistics from the courts, such as foreclosure and
related title information, in order to determine where vacant or
potentially vacant properties are located.
* Independently collecting new data: In some cities, city leaders have
involved staff or community members in data-collection efforts at the
neighborhood level. As discussed earlier, in Cleveland, annually for
the last 3 years, a team of city employees has walked street by street
to count vacant and distressed properties, using standardized
definitions and indicators of distress such as houses that are boarded
up, open, or vandalized. Officials in Baltimore and Detroit hired a
firm to create "market typologies" of various neighborhoods, pulling
data from multiple sources--city departments, USPS, county assessor--
in order to understand market strength in individual neighborhoods.
Representatives from community organizations in Detroit and
Indianapolis told us that volunteers collect real-time information on
property conditions in their neighborhoods, compiling prioritized
lists of houses that need either board-ups or rehabilitation
investment. According to the community group in Detroit, those lists
were then provided to the city to use in devising its board-up
strategy.
* Leveraging resources from local universities and research
organizations: Some of the cities we studied have partnered or
contracted with a local university or research organization to collect
both existing data and new statistics. In Tucson, researchers from a
local university conducted a survey of properties and structures
(water systems, bus shelters) in five neighborhoods targeted to
receive NSP funds in order to understand, among other things, the
number and condition of vacant properties. At Case Western University
in Cleveland, researchers developed and maintain a public website--the
Northeast Ohio Community and Neighborhood Data for Organizing (NEO
CANDO)--that houses social, demographic, and property data. The
property data (going back to approximately 2000) were added beginning
in 2005 specifically to help community development organizations and
city leaders be more data driven. The data include property and lot
characteristics, code enforcement actions, foreclosure filings, tax
delinquencies, and sales transactions. NEO CANDO also has water
department data on shutoffs, postal service data on vacancies, and
information purchased from a proprietary real estate database,
including the dates that adjustable rate mortgage loan interest rates
will reset. According to a 2010 report on NEO CANDO and neighborhood
stabilization efforts in Cleveland, officials from the city and local
community organizations use and rely on the NEO CANDO data.[Footnote
66]
These data--which can include more detailed information such as
property condition and identity of the owner or responsible party, as
well as aggregated neighborhood-level data, such as the number of
homes with loans in default--enable more effective tracking of
properties likely to cause problems, and can serve as an early warning
system, so that issues can be addressed while they are still
manageable, according to an organization involved in building local
government capacity. However, in the nine localities we reviewed, most
officials we spoke with had estimates but not precise data on the
number and condition of vacant properties in their communities.
Many city officials are using these data to target their resources to
narrowly defined areas in order to maximize their investments rather
than putting small amounts of funds toward a wide range of
communities. For example, city officials in Baltimore, as part of its
"Vacants to Value" campaign, used the data from the market typology
research and proximity to other nearby redevelopment projects to
identify housing markets in distressed areas and to target appropriate
interventions. These markets are characterized by high concentrations
of abandoned properties, many of which are owned by the city or are in
tax arrears, but due to the adjacent development efforts, private
developers are interested in rehabilitating some of these blocks.
According to Baltimore officials, the city's targeting of code
enforcement efforts in these neighborhoods has assisted private
developers and a local community development organization in acquiring
properties for redevelopment and attracting investors in their
projects. Similarly, Indianapolis and Cleveland officials told us they
have targeted specific community areas that have strong ongoing
community development and neighborhood organizations, with the
capacity to support and bolster city investments.
Although these data-collection and targeting efforts can help
municipal leaders make decisions, they can be limited in certain ways.
These efforts can help leaders make informed and strategic decisions
about where to make investments and to prioritize projects and needs
using objective criteria (such as number of vacancies per square mile)
as opposed to relying solely on political factors. Specifically, city
and community representatives told us that objective, reliable data on
the numbers and locations of vacant properties are important to their
efforts to design and target strategies to address the problems that
vacant properties produce. For example, community organization members
we spoke to in Baltimore supported the city's new "market-based
approach" and noted that it does not make economic sense to acquire or
rehabilitate property when there is no private funding for
development. However, data collection requires resources and continued
updating since vacancies can occur rapidly due to continued
foreclosures. Furthermore, information about vacant and abandoned
properties typically must be assembled from various county and city
offices, each of which may operate a unique data system. Data-
gathering efforts, such as door-to-door surveys, can be resource
intensive and expensive. Also, some city officials we spoke with noted
that politically, targeting resources to limited areas can be
difficult. Local government officials in Detroit told us they plan on
using their upcoming market research to bolster their arguments for
targeting funds to fewer, smaller areas of the city instead of giving
small amounts of funds to all neighborhoods. However, if resources go
to one area, by default they are not going to others, and those
communities may still be in need.
Property Acquisition and Rehabilitation Strategies Are Also Being Used
to Address Vacant Properties:
To mitigate the damage caused by vacant properties, city officials and
partner community organizations in eight of the nine cities we studied
are engaged in efforts to acquire and rehabilitate such properties,
often using federal funds. However, such efforts face declining home
values, ongoing foreclosures, and sluggish economic conditions. In a
typical acquisition and rehabilitation effort, a city acquires
properties either through strategic purchase of foreclosed properties
or by default as a result of no-sale at tax foreclosure. When
feasible, these properties are then rehabilitated for a new owner or
renter, usually by a community development corporation or similar
organization. For example, in Cape Coral, Florida, the city purchased
82 foreclosed homes for rehabilitation and then used other funds for
homebuyer assistance. In Indio, California, officials used $11.1
million in NSP funds to purchase 58 foreclosed homes for
rehabilitation and resale to first-time homebuyers.
These types of city-led acquisition and rehabilitation efforts can
help stabilize neighborhoods, because city leaders purchase properties
with the goal of preserving communities. In contrast, some out-of-
state investors, in an attempt to make a purchase and then quickly
resell or "flip" properties, may undertake only minimal renovations so
properties can be rented or resold to generate cash flow, according to
some community organization representatives we spoke with and a study
from federal researchers. One way cities can acquire properties ahead
of investors and help ensure they go to owners with potentially
greater incentive to maintain them is through "first look" programs,
which provide cities with the opportunity to purchase properties from
foreclosing owners before they are publicly offered for sale. The
National Community Stabilization Trust (the Trust), which was formed
by various nationwide community groups, is a national organization
that offers "first look" programs within targeted neighborhoods.
[Footnote 67] As part of this program, the Trust maintains a database
of foreclosed properties in targeted neighborhoods from lists provided
by financial institutions. Cities and nonprofit organizations are
given access to the listings before they become available for sale in
the private market. The government and nonprofit officials are given 5
days to indicate whether they are interested in acquiring any of the
homes. This "first look" window of review is offered only to cities
and community development organizations, not the public or other
investors. Both Tucson and Cape Coral officials purchased NSP
properties through a "first look" program, and officials in Cape Coral
said that obtaining the properties without the first look advantage
would have been difficult, given the high level of investor interest
in their community.
Another advantage of city-led acquisition and rehabilitation efforts
is that the city can target its resources to areas of greatest need or
where they will have the most impact. Several of those we spoke with
noted that acquisition and rehabilitation efforts are most successful
when they concentrate their efforts in pockets of strength where there
are other investments nearby. There are rarely sufficient funds and
resources, they said, to rehabilitate a whole neighborhood, but a
small area near other existing assets (retail district, school) can
work. For example, in the latest round of NSP projects, Tucson
officials focused their efforts in older, more established
neighborhoods that were mixed use--having commercial and retail sites--
and therefore might attract private market buyers and developers who
are willing and interested in returning the properties to productive
use. Finally, rehabilitating real estate that is newer is usually more
cost efficient because the costs and time needed for the work to
update the property can be recouped sufficiently when it is resold.
While many view acquisition and rehabilitation as a strong strategy to
combat the problems of vacant properties, lack of capacity, poor
property conditions, and the large volume of foreclosures complicate
efforts at the local level as follows:
* Lack of capacity: Officials and industry participants we spoke with
noted that even with first look programs, government bodies do not
always have the ability--including sufficient funds or expertise--to
quickly complete real estate deals. Several city officials told us
that, despite the importance of targeting a well-defined block or
tract for redevelopment, they do not always have the ability to
acquire sufficient numbers of properties within that area to make the
investment worthwhile, and sometimes securing funding is difficult.
For example, an official in Chicago told us that initially they had
identified a block with 10 homes to rehabilitate for NSP. However,
when they researched the properties' ownership, they found that the
city would be able to acquire at most half of those 10 properties
because of the difficulty in obtaining clear title to some of them.
For example, one property was still undergoing the foreclosure
process; another was a "walkaway," in which the lender had initiated
but chose not to complete the foreclosure; and another had a "remote
owner" who was difficult to reach. In addition, a study by Federal
Reserve researchers noted that funding capacity constraints were
preventing most community development organizations from redeveloping
enough vacant homes to reverse the decline of neighborhood home
values.[Footnote 68]
* Poor property conditions: In addition, poor property conditions can
make acquisition and rehabilitation efforts costly and challenging.
Acquired properties may have been vacant for long periods of time and
therefore may require substantial rehabilitation. This problem has
worsened as housing market values have continued to decline. With
costly rehabilitation and low housing values, governments, community
development organizations, or investors may not be able to recoup
their costs for rehabilitating properties in poor condition by
reselling them. For example, a community group representative from
Baltimore said that 4 or 5 years ago, home values were high enough to
support rehabilitation of properties in poor condition in some areas
that bordered those in decline. Current values, however, do not
support rehabilitation of such properties.
* Volume of foreclosures: While many of the city officials we spoke
with indicated that the NSP program and funds had been very
beneficial, the scale of the foreclosure problem in some areas is such
that they are not able to get ahead of the growing numbers of
foreclosures and vacancies solely through acquisition programs. Two
representatives from community development organizations noted
instances where they were able purchase and renovate vacant properties
on a block, but by the time those properties were ready to be put on
the market for sale, additional properties on those blocks had become
vacant, thus reducing the value and demand for the renovated
properties. Furthermore, ongoing vacancies threaten the stability of
neighborhoods since the declining values and board-ups make the area
less attractive for current residents, potentially leading to further
abandonment and decline. For example, on a tour of a Chicago
neighborhood, we saw recently rehabilitated homes that were next door
to or across the street from recent foreclosures, devaluing the worth
the redeveloped properties, according to representatives of a
community organization working in the neighborhood (see figure 13).
Figure 13: Vacant Properties Near Recently Rehabilitated Homes in
Chicago, as of 2011:
[Refer to PDF for image: 2 photographs]
Newly rehabilitated multifamily property (left) across the street from
vacant and boarded-up homes (right). According to representatives from
a Chicago community development organization, the vacant homes were
constructed in the mid-2000s but were never sold due to the housing
crisis. They have been vacant for approximately 5 years, and
contribute to decreased value in the neighboring properties, including
the recently rehabilitated property across the street.
Source: GAO.
[End of figure]
Another challenge to acquisition and rehabilitation efforts is a lack
of ready and willing buyers, so some communities have established
special entities--known as land banks--to acquire and hold properties
for later development. Finding sufficient buyers for rehabilitated
homes can be very difficult, especially in markets with older housing
stock and declining populations, such as Baltimore, Detroit, and
Cleveland. In current economic conditions, fewer buyers qualify for
financing, and even those that do may not be willing to make purchases
now as the housing market has remained weak. Therefore, several
jurisdictions work with or have established a land bank--typically a
separate governmental or quasi-public entity--to acquire vacant,
abandoned, and tax-delinquent properties for longer periods and then
convert them to productive uses, including those other than housing,
such as parks or other green spaces. Land banks acquire foreclosed
properties held by banks, by the GSEs, or by federal and state
agencies. For example, the Cuyahoga County Land Reutilization
Corporation (commonly known as the Cuyahoga Land Bank) has an
agreement with Fannie Mae in which the land bank receives all of
Fannie Mae's low-value properties--those appraised under $25,000--for
$1, and Fannie Mae contributes approximately $3,500 per property
toward demolition costs. A similar deal was struck with HUD, in which
HUD agreed to give the land bank a right of first refusal on the
lowest-value properties it disposes of. Currently the Cuyahoga Land
Bank representatives said that the land bank receives 300 to 400
properties per year from both Fannie Mae and HUD. Land banks also can
acquire real estate lost to tax foreclosure and may accept donated
properties. For example, two large servicers recently established
agreements with the Cuyahoga Land Bank to donate low-value properties
and contribute funds toward demolition.
In communities where properties are too damaged or too low-value to be
sold or rented, land banks can provide a system that enables a
strategic assessment of what to do with vacant and abandoned
properties and how to deal with the carrying costs of these
activities. Properties that end up in a land bank may be ones that
have deteriorated and may have title issues and delinquent taxes, so
the interested buyers may be speculative investors interested in
quickly reselling the property at a profit.[Footnote 69] Land banks
can break the cycle of properties moving from one investor to another
who are not maintaining or improving the properties. According to a
former city official in Indianapolis, land banks also facilitate
partnerships between a city and nonprofit organizations. Once a
community development corporation (CDC) decides to work in a
neighborhood, it might not have enough funds to acquire a large number
of properties, and it may be working in competition with speculative
investors for properties. The land bank can hold properties, assuming
the risks associated with land ownership, until CDCs have secured
funding and are ready to proceed with redevelopment efforts. Likewise,
industry experts, as well as officials and community group
representatives we spoke with noted that a primary benefit of a land
bank is that it can hold properties until the local market recovers.
Lastly, land banks can help stabilize a neighborhood from further
decline by either maintaining homes adequately for future development
or demolishing properties as quickly as possible and tapping into
other potential uses, such as urban gardens, parks, and other green
spaces. For example, in Cleveland, a local faith-based organization
paid for the demolition of an abandoned, foreclosed home on a lot next
to its playground. The lot, owned by the Cuyahoga County Land Bank,
was then donated to the organization, which planned to invest $25,000
to develop it as a green space and fill it with an amphitheater and
native plants. A recent study about the land bank in Genesee County,
Michigan, (discussed earlier in this report) showed that homes near
vacant lots that had been created by the demolition of vacant
properties increased in value.[Footnote 70] Similarly, another study
of distressed housing in Cuyahoga County estimated that, given an
average demolition cost of $7,500, demolishing 2,000 homes that are
foreclosed and vacant, tax delinquent, or all three, would net $12
million in value, benefiting sellers of nearby homes and the county's
real property tax base.[Footnote 71]
Land banks are not without their challenges, however. First, it could
take time to successfully establish a land bank. According to a former
land bank official in Indianapolis, land banks do not generate much
revenue or make significant impacts overnight, and it takes a few
years to establish a successful program. In some cases, localities may
need to be granted the authority to begin a land bank by their state's
legislature, and passage of such legislation takes time, especially in
states with part-time legislators. Second, land bank officials and
experts agree that securing long-term stable funding for a land bank
is critical. The Cuyahoga Land Bank's primary funding comes from the
county's revenues from penalties and interest on property taxes and
assessments that are not paid when due. In contrast, the land bank in
Indianapolis lacks an established and ongoing mechanism for receiving
funds from tax revenues and instead has been funded by proceeds from
liens and fines, CDBG, and NSP. Finally, some city officials expressed
concerns about another entity--be it the county or a separate quasi-
governmental agency--having control over land within its boundaries.
Laws, Local Ordinances and Dedicated Housing Courts Intended to
Increase Accountability for Vacant Properties:
City governments use housing and building codes, and related
enforcement to oversee the safety of properties within their
jurisdictions. With the increase of vacant properties in many
communities, local governments are passing stronger property
maintenance requirements and property registration ordinances aimed at
increasing the responsibility of servicers to maintain properties
during the foreclosure process. Similarly, two states, New Jersey and
New York, recently passed laws requiring servicers to maintain
properties in the foreclosure process. In addition, some jurisdictions
have also established special housing courts to increase compliance
with local building codes and property maintenance laws. Finally, some
advocates and others have suggested that the costs of maintaining
properties should be formally imposed on servicers, although the
feasibility of such an approach is unknown, and it may have unintended
consequences if implemented.
Code Enforcement and Liens:
Municipal housing and buildings department inspectors examine
properties for compliance with local code requirements either during
routine inspections or when they receive a complaint about a derelict
or vacant property. If the property is in violation of the required
standards, the enforcement agency issues a notice to the property
owner and other responsible parties that lists the specific code
violations or the nuisance conditions. According to a national
community-building organization, code enforcement departments work on
a complaint-driven basis, although some have designed more systematic
inspection programs that target certain neighborhoods or violations
with fines. For example, officials in Cleveland have established a
code-enforcement partnership with local CDCs in which the CDCs help
survey properties in each of the city's 19 wards and prioritize
enforcement needs. Through this cooperative effort, the inspection
program will cover the entire city for the first time, over a 3-year
period. Although the program is in early stages, its goal is to
leverage the resources and neighborhood-level knowledge offered by the
community organizations in order to prioritize properties in need of
maintenance, condemnation, or demolition. Other city officials told us
they file priority liens--which are claims on the property that must
be paid before any monies owed to other lienholders are paid in the
event of foreclosure--or other monetary penalties, which can be
substantial and escalate over time.[Footnote 72] For example, Las
Vegas code enforcement officials told us that if they are unable to
locate the servicer and they determine the property is vacant, they
hire a contractor to perform the necessary maintenance and secure the
property as needed at the city's expense. The code enforcement
officials then appear before the Las Vegas city council and obtain a
lien for the amount of the abatement. The council can charge the
servicer up to $500 per day in civil penalties, although past
responsiveness of a servicer is taken into account when the council
determines the total amount of fines due. Officials in some cities we
spoke with said higher fines have resulted in more responsiveness from
servicers. However, another city has moved in the opposite direction,
away from liens and fines. For example, the city of Cape Coral enacted
a lien-forgiveness policy, which forgives outstanding liens as long as
the property comes into compliance with city building codes. Officials
stated that if the city keeps the liens in place, the properties would
be unmarketable given market-wide declines in property values. We
heard similar views from a local official and an industry
representative, who said that accumulated fines and related liens can
complicate the eventual resale of property by encumbering the title.
Similarly, in our past work, we found that heavy fines on already low-
value properties may encourage servicers to abandon foreclosure,
leaving the property vacant with no party responsible.[Footnote 73]
Some we spoke with expressed a concern that cities' enforcement
efforts often have a "one size fits all" approach that does not reward
those servicers who are cooperative and responsive to city demands.
Currently, the greatest challenge to effective code enforcement in
most communities is a lack of resources, according to local officials.
As discussed earlier, officials we spoke with in several cities noted
that they have recently experienced staff cuts in their code
enforcement departments, and a shortage of inspectors can make code
enforcement difficult. As discussed earlier in this report, officials
in Cape Coral have recruited local volunteers to help with property
maintenance, such as mowing overgrown lawns, while Cleveland officials
are working with local community development corporations in an effort
to expand available "eyes on the ground." Furthermore, code
enforcement officials told us locating the owners or current mortgage
lien holders of abandoned foreclosures takes time and money.
Vacant Property Registration Requirements and Maintenance Laws:
Another action that some local governments are taking is to require
servicers to register vacant properties. As previously discussed, one
of the major challenges confronting code enforcement officials is
identifying who is responsible for maintaining vacant properties.
Vacant property registration requirements attempt to address this
problem by requiring servicers to provide the city with specific
contact information for each vacant property they service. According
to a national firm that contracts with servicers to maintain
properties, 439 jurisdictions have enacted vacant property
registration ordinances as of September 2011. Although the
requirements of these ordinances vary, researchers generally classify
them into two types. The first type tracks all vacant and abandoned
properties and their owners (regardless of whether or not there is a
foreclosure action) by requiring the owner to provide the municipality
with specific contact information. Among the cities we studied,
Baltimore has implemented this type of registration requirement. In
addition to requiring registration, some local governments have
ordinances that also attempt to hold the lender or servicer
responsible for maintenance of vacant properties during the
foreclosure process. The cities of Cape Coral, Indio, and Chicago, for
example, have implemented this second type of ordinance. Cities often
impose a registration fee along with the requirement. In July 2011,
Chicago's City Council passed an amendment to its vacant property
registration and maintenance ordinance, expanding the definition of
"owner" to include any entity holding a mortgage on the property.
[Footnote 74] The amended ordinance required servicers to pay for
maintenance and upkeep on vacant properties before officially taking
title through a foreclosure sale. Representatives from servicers and
the GSEs, have expressed concern that the Chicago ordinance went too
far in assigning responsibilities to servicers prior to the completion
of the foreclosure because, as previously discussed, servicers are
concerned about legal liability when conducting work on properties
during this period. Specifically, representatives from one servicer
said the law held the mortgagee responsible for a vacant property
before foreclosure is initiated, or even if the customer is current on
the loan. In October 2011, a committee of the Chicago City Council
recommended removing the language more broadly defining "owner" from
the ordinance.
The states of New Jersey and New York have enacted statewide
requirements that give cities the authority to hold servicers
responsible for maintenance of vacant properties during the
foreclosure process.[Footnote 75] New Jersey's law requires, among
other things, that all servicers notify the clerk of the municipality
in which the property is located each time they initiate a foreclosure
proceeding on a residential property. That way, each municipality can
create a database of all residential properties in foreclosure in the
community. In the absence of these new notification requirements,
servicers were only required to initiate a foreclosure action by
filing at a central location in the state capitol, according to a
senior state official responsible for compiling these notices. This
official also said it would have been difficult for municipalities to
track foreclosure filings on properties in their localities using the
information filed with the state. The notices must contain contact
information for an entity responsible for receiving complaints about
property maintenance and code violations. If at any point after the
foreclosure proceeding has begun the local government finds that the
property has been abandoned by its owner, maintenance of the property
would then become the responsibility of the servicer or other
creditors. Similarly, the New York law requires, among other things,
that servicers maintain abandoned properties until ownership is
transferred after foreclosure. However, that responsibility begins at
the point of foreclosure judgment when a judge grants a servicer the
right to hold a foreclosure sale, which occurs anywhere from 8 to 14
months after initiation of foreclosure in New York, according to a
nonprofit association of mortgage banking law firms. Although the New
York law (like New Jersey's) authorizes municipalities to enforce the
law against servicers that fail to maintain an abandoned property
prior to a foreclosure sale, it does not require servicers to provide
notification to local governments. Local housing and code compliance
officials in Rochester, Buffalo, and New York City told us that absent
such a notification requirement, they are not able to systematically
monitor the issuance of foreclosure judgments.
The contact information in vacant property registration systems can
make it easier for local code enforcement officials to identify the
parties responsible for abandoned foreclosures and to hold mortgage
owners accountable for vacant properties, reducing the negative impact
of these properties on the community. For example, local officials we
interviewed in one city with a vacant property registry said that more
owners are complying with their city's registry requirements due to
increased fines and noted that the registry had been effective at
providing contacts for officials to call to resolve code violations on
vacant properties. Officials we spoke with in another city noted that
because their ordinance requires certain levels of maintenance on
properties, servicers have the needed incentive to keep up vacant
properties to avoid incurring additional costs. They also said that
servicers have been more cooperative and responsive since the
registration and maintenance ordinances were passed. In addition, the
fees generated by the registration requirements can help fund cities'
code enforcement programs.
While vacant property registration systems can help local governments
identify some owners, they might not capture all owners. Furthermore,
local officials and industry representatives told us that cities lack
adequate code enforcement and inspection staff to enforce fully the
registration and maintenance requirements. For example, buildings
department staff in Chicago noted that they do not check to see if a
vacant property has been registered unless they are inspecting it
already due to complaints. Several representatives from those cities
in our study that do not have a registration system said there has
been some local interest in starting one but cited lack of resources
and staff as key impediments. Officials from the Las Vegas area said a
strong local culture of property rights makes establishing a
registration system politically infeasible. Representatives of
mortgage servicers told us that it can be burdensome and costly to
track and comply with the various standards and systems at the local
level. Further, as previously discussed, servicers and other industry
representatives we spoke to believe servicers' authority to perform
work on properties they did not yet own was limited during the
foreclosure process. At the same time, most of the servicers we
interviewed told us they do their best to meet local requirements and
register vacant properties as required.
Housing Courts:
A few jurisdictions across the country have established special
housing courts devoted to building safety and code enforcement cases.
Housing courts can devote their exclusive attention to complex cases
involving substandard housing and abandoned buildings brought by the
city prosecutor. For example, in Cleveland, the housing court includes
10 housing specialists who work, at the judge's direction, with
property owners to correct the violations on their properties.
According to the housing judge in Cleveland, the benefit of a
specialized court is that he and his staff develop expertise in
necessary areas, such as requirements related to ownership and
transfer of title. Before Cleveland had a housing court, these cases
rotated among 12 other judges in the municipal court; each judge may
have used a different approach, and cases sometimes languished on
their dockets. In contrast, the judge for the housing court has been
able to develop specific approaches to common problems regarding
property maintenance and disposition. Similarly, a Chicago judge we
spoke with told us his focused work in the housing court has given him
expertise on all available options in the local market, and this
knowledge of the history of the entities and properties involved helps
him make decisions about what is the best action based on the unique
circumstances of each property. For example, he might assign a
receiver for a relatively well-maintained multifamily property in a
stable neighborhood because that property is worth preserving, but he
would likely order a deteriorated wood frame house in a neighborhood
that has a lot of other vacancies to be demolished.
Another potential benefit of a housing court could be to expedite
foreclosures on vacant properties. For example, the Chicago housing
court is implementing a new plan for properties that are vacant, and
for which the homeowner cannot be located. The judge would review the
case and if provided with sufficient evidence that the owner cannot be
located and has vacated the property, a judgment for foreclosure will
be granted. These foreclosure cases would then proceed through the
housing court rather than the general chancery court, where
foreclosures are currently taking 18 to 24 months to complete,
according to the Chicago housing judge we spoke with for this report.
The goal of the program is to complete the foreclosure for these
vacant properties in as little as 9 months, which would allow the
servicer to transfer the property to an owner or entity more likely to
preserve it, avoiding further vacancy and deterioration of the
property. GSE representatives support the idea of expedited
foreclosure, although they caution that the process for certifying
that a property is vacant should not be onerous. In Colorado, a state
law enacted in 2010 allows for an accelerated foreclosure process if a
court is presented with evidence that a property is vacant. However,
according to an attorney with a large Colorado law firm that
represents most of the servicers in the state, Colorado's law has only
been used in a small number of foreclosures because servicer
representatives feel that the vacancy certification process enumerated
in the law, which requires at least two different types of proof of
vacancy such as multiple broken windows and boarded-up doors, is
cumbersome.[Footnote 76]
However, while a housing court can provide resources and expertise to
resolve vacant property cases, in some cases, establishing such a
court may require legislation, as well as substantial resource
investment.[Footnote 77] Even with a well-staffed and dedicated
housing court, judicial proceedings still can be lengthy and costly,
and depending on the responsiveness of the responsible party,
vacancies and neglect may still persist. Due to lengthy court
timelines, officials in Baltimore have begun a new approach to code
enforcement that is intended to avoid litigation in most cases. In the
past, litigation was required in every instance where a vacant
building owner was noncompliant. Now Baltimore code enforcement
officers can issue $900 citations (similar to parking tickets) so that
the city goes to court only in cases of repeated offenses.
Servicer Accountability for Vacant Property Costs:
Academics and advocates have suggested that another strategy for
increasing servicer accountability and preventing negative impacts
from vacancies is to have servicers acknowledge and account for the
costs that vacant foreclosed properties bring to communities in the
tools they use to help them make decisions about modifying a loan or
foreclosing on it. These tools are financial models and calculations
that generally use information about the borrower and the property to
compare the expected financial benefit of taking one action over
another. For example, the models servicers use to help them determine
whether to offer a borrower a loan modification include factors such
as the borrower's income and monthly expenses, such as mortgage and
insurance payments, as well as the location and value of the property
to assess whether the expected cash flow for a modified loan is higher
than the expected cash flow for no loan modification. If the result of
this calculation is negative, then it generally is not financially
beneficial for the servicer to modify the loan.[Footnote 78]
Similarly, foreclosure decision-making models include factors such as
projected property maintenance costs, the duration of the foreclosure
process, expected time to resell the property, and the value of the
property. If this calculation indicates that the projected proceeds
from the eventual sale of the property exceed the projected costs by a
certain amount, the servicer will proceed with foreclosure. According
to some servicer representatives we interviewed, they do not
explicitly take into account the costs that vacant foreclosed
properties bring to communities in the models they use to help them
decide whether to offer a loan modification to a borrower or to
analyze whether foreclosure would be financially beneficial. One way
this could be done is by requiring servicers to include vacant
property costs to local governments--such as for police and fire
services--in their models.
A few industry participants and observers said that adding costs
related to vacant properties into the decision-making models may
encourage servicers to decide to conduct more loan modifications.
Because maintaining a vacant property throughout foreclosure could be
more costly under this proposal, loan modifications might seem more
cost-effective. Local officials told us that the high volume of
continuing foreclosures makes it difficult to manage the resulting
vacant properties. If more borrowers were approved for loan
modifications, they would remain in their homes and prevent them from
deteriorating; thus, localities would not have to expend as many
resources on maintenance of vacant foreclosed properties. According to
one study, any cost savings the city experiences could be used toward
other local efforts to prevent foreclosures, among other things.
Academics who support having servicers account for vacant property
costs often being borne by communities indicated that doing so would
help all parties in the mortgage transaction understand the cost of
these properties to local governments and ensure that each either pays
a share or takes actions to reduce these costs.
However, servicers, academics, and other industry stakeholders said
that administering this proposal would be difficult. Determining the
appropriate amount to add to the decision-making models to account for
the community costs could be challenging, in part because of a lack of
consistent data and the variation in local circumstances and property
conditions. Some cities may have data that could be used to calculate
the costs of vacant properties to the city. For example, a 2009 study
used data from four city departments in Baltimore to calculate the
cost of police and fire services associated with vacant
properties.[Footnote 79] In addition, local officials in Chicago told
us that they have a database that tracks property information such as
building violations and court proceedings and flags properties that
have been identified as vacant. They said that the police and fire
departments also track their costs related to vacant properties.
However, many localities do not routinely track which costs are
related to vacant properties. In addition, data about these costs
could be difficult to obtain because it comes from a variety of
sources within a city, including legal offices, public works, housing,
police, fire, building inspection, and code enforcement. Determining
the appropriate amount to add to decision-making models to account for
these costs is further complicated by the variation in what these
costs may be across jurisdictions. Although a few studies have
calculated the cost of vacant properties to particular cities, these
estimates cannot be applied to all jurisdictions because local housing
market and property conditions vary. For example, according to one
study, the effects of vacant properties on neighborhoods vary widely
among regions and within specific areas of a region.[Footnote 80]
In addition, stakeholders were uncertain if this proposal would be
effective and said it could have unintended consequences. According to
some servicer representatives, explicitly adding additional costs to
decision-making models might not be effective at increasing loan
modifications because borrowers can be denied for modifications for a
number of reasons other than the decision-making model indicating that
it is not financially beneficial to modify the loan. Our analysis of
Treasury data from December 2010 shows that only 6 percent of denials
for loan modifications through HAMP as of that date were due to the
results of the decision-making model.[Footnote 81] More common causes
of denials for HAMP loan modifications were because borrowers'
documentation was incomplete, the property was not owner-occupied, or
the mortgage itself was ineligible.[Footnote 82] According to
representatives from a few servicers, including additional costs might
increase the number of modifications, but the borrowers might default
again because they still do not have the ability to pay. Therefore,
the proposal might not have the intended effect of preventing
foreclosures and keeping homes occupied. Another reason servicers said
the proposal might not effectively increase modifications is that
their models already address some of the costs of vacant properties.
Foreclosed properties generally sell for a lower price than other
properties, so servicers reduce the amount they expect to earn from
selling the property in their calculations. Thus, they said that the
amount that property values have declined as a result of foreclosure
is already a factor that they consider and that altering the decision-
making model may not result in many additional loan modifications.
Several servicers also said that they account for any factors the
model might miss by approving borrowers who are within a certain
threshold even if the model indicates that it would not be financially
beneficial to modify the loan. Similarly, Treasury officials noted
that the incentives investors receive for participating in HAMP may
tip the calculation toward modification, which somewhat addresses the
costs to communities. Finally, servicer representatives and other
industry observers said that adding to the costs of foreclosure could
have the unintended consequence of causing servicers to abandon more
foreclosures--that is, deciding not to foreclose on a loan and walking
away from the properties. It could also increase the cost of
servicing, which might impact costs to consumers or banks' lending
decisions in areas where the foreclosure costs were high.
Local Officials Have Concerns about Decreased Federal Funding and Want
Increased Attention to Servicers' Role in Vacant Property Problem:
As discussed earlier, local governments currently are experiencing
fiscal strain, and local officials told us federal funds help them
address the costs of vacant properties, but they are concerned that
continuing their efforts will be difficult as some programs expire,
and cuts are made in others. In particular, local officials said they
needed funds they could use for demolition and increasing the capacity
of their code enforcement departments. Although the federal funds they
receive assist in these efforts, as discussed earlier, officials in
Baltimore, Detroit, and Chicago stated that the resources required to
demolish the large number of unsafe and unattended vacant properties
in those cities exceeds local and state budgets and federal funds.
Local officials we interviewed recognized the importance of NSP
funding in combating the problems of vacant properties. They said that
this program provided much needed funds for demolition, and one
official noted that it allowed the city to undertake neighborhood
revitalization projects that it would not have otherwise been able to
do, and provided leverage for attracting other sources of funding and
development in targeted areas. Officials in two localities also
reported that the technical assistance they received from HUD helped
fill gaps in their capacity to develop systems to implement NSP
projects.[Footnote 83] However, this funding is coming to an end--
funds from the latest round of NSP grants were required to be
obligated for specific projects by March 2010--and local officials
noted that it was not enough to address the scale of the vacant
property problems in their areas. For example, officials in Las Vegas
and the surrounding area told us they were able to acquire a few
hundred properties with NSP funds, as of June 2011, but this number
was not enough to stabilize the neighborhoods. According to 2010
Census data, Las Vegas has almost 29,000 nonseasonal vacant properties.
In addition, local officials noted that the ability to make funding
decisions locally and the flexible nature of CDBG funds from HUD were
essential to their housing programs, and that reductions in this
funding would be difficult to manage. Communities can use CDBG funds
for a variety of uses, including acquisition, administration and
planning, economic development, and housing activities. For example,
local officials in the communities we studied said that they use CDBG
funding for, among other things, providing grants to homeowners to
help them repair properties (Tuscon and Indianapolis), demolition
(Detroit and Cleveland), enhancing code enforcement (Cleveland), and
community outreach (Chicago). After budget increases in the last few
years, and supplemental CDBG funding through the American Recovery and
Reinvestment Act of 2009, total CDBG funding was reduced by 21 percent
in 2011 compared with 2010 funding levels.[Footnote 84] The proposed
2012 budget made further reductions of 7.5 percent, or $300 million,
relative to current funding levels in order to meet the President's
goal of reducing spending across agencies. Local officials and
community group representatives from several cities said that this
reduction in CDBG funding would make continuing their CDBG-funded
programs difficult. With sustained high foreclosure and unemployment
rates and further declining home values, local officials said that
continued, flexible CDBG funding would help them maintain efforts to
address vacant properties in their areas.
Local officials and representatives of community organizations also
emphasized that more pressure from regulators on servicers to modify
loans was needed. In particular, some local officials said that
regulators could do more to encourage servicers to modify loans by
reducing the principal that the borrower owes. Further, officials in
the Las Vegas area noted that HAMP does not address the challenges
facing many borrowers in the area who owe more on their homes than
they are worth. When a borrower owes more on the mortgage than the
house is currently worth, the affordability of monthly payments may
not be the only consideration in the borrower's decision to stay in
the house. We have previously reported that HAMP, which makes
borrowers' monthly payments affordable by reducing them to the target
of 31 percent of their gross household incomes, does not focus
directly on the issue of negative equity that is experienced by a
large and growing segment of borrowers (so called "underwater"
borrowers).[Footnote 85] Local officials noted that effectively
stabilizing neighborhoods while further foreclosures are occurring and
more properties are becoming vacant is difficult. They maintain that
more pressure on servicers to modify loans could prevent additional
foreclosures and vacancies. This, in turn, could allow local efforts
to stabilize neighborhoods to make more of an impact. In response,
banking regulators said that they encourage institutions under their
jurisdiction to work with borrowers to modify loans when feasible. In
addition, Treasury officials said that they adjusted servicers' HAMP
incentive payments to encourage them to begin working with borrowers
on modifications early in delinquency.
Local officials also said that federal regulators could do more to
enforce servicers' responsibilities for maintaining vacant foreclosed
properties, such as by holding them accountable for complying with
local property maintenance codes and responding to code violations.
Local officials we spoke with in most of the cities we studied also
expressed frustration with obtaining servicers' cooperation in
addressing code violations on vacant properties for which they are
responsible. For example, one official said that local efforts to
enforce servicers' responsibilities to maintain certain properties
were not always effective. Part of these difficulties could be due to
challenges in locating property owners and mortgage lien holders
responsible for vacant properties. They noted that identifying the
responsible party even after foreclosure is completed can be difficult
because of delays or failures in recording changes in ownership with
local jurisdictions. The servicers and property maintenance company we
spoke with maintain that they have made improvements in communicating
with local officials by setting up specialized hot lines, dedicating
staff to responding to local issues, or placing notifications on
properties with correct contact information in the event of problems.
However, a couple of representatives also acknowledged that is an
ongoing process. In response to local officials' calls for regulators
to enforce servicers' compliance with local laws, regulatory staff
said that compliance with local laws is expected and examiners would
review whether the institution has systems or controls in place to
manage compliance with local laws when circumstances warranted but
typically do not enforce compliance in individual cases. For example,
OCC representatives said that they do not have the resources or
expertise on all the variations of local laws to review and enforce
such compliance in every case.
Federal Agencies Have Recently Increased Attention to Mortgage
Servicing Activities in Their Oversight:
Oversight of mortgage servicers' activities regarding loans in
foreclosure has not always been a major focus among federal banking
regulators, although they have recently increased their attention to
this area. As part of overseeing the safety and soundness of banks,
the banking regulators have developed a variety of guidance that
outlines expectations for banks to follow in their lending practices,
loan management, and other activities, and examiners primarily
structure their reviews to address the areas considered to pose a high
risk of financial loss for the institutions. Federal regulatory
guidance and examinations address institutions' overall policies for
managing loans, not necessarily actions to take on individual
properties. For example, the federal banking regulators have developed
uniform standards that require depository institutions to establish
and maintain comprehensive, written real estate lending policies that
are consistent with safe and sound banking practices.[Footnote 86]
These policies must address certain lending considerations and loan
administration procedures, such as inspections to monitor the
condition of properties that serve as collateral for delinquent loans
going into foreclosure and compliance with relevant local laws and
servicing agreements, among other requirements. However, these
standards do not require specific property maintenance activities. In
addition, interagency guidelines for safety and soundness state that
institutions should establish and maintain a system to identify
problem assets, prevent their deterioration, and better ensure
sufficient resources to absorb estimated losses, but the guidelines do
not provide specific requirements for property maintenance.[Footnote
87] Similarly, the extent to which bank regulators have examined
servicing activities such as the foreclosure process has been limited
because these practices generally were not considered to pose a high
risk to the safety and soundness of the institutions and were not
raised as an area of potential concern in consumer
complaints.[Footnote 88] For example, regarding loans in the
foreclosure process, regulatory officials said they expect servicers
to work with borrowers to modify loans where feasible and comply with
local laws, such as those related to registration of vacant
properties. They also generally noted that examiners might review
institutions' policies for following local laws and managing and
valuing losses for the loans but would not typically review which
actions servicers had taken on individual properties.
Once foreclosure is completed on a loan, federal regulatory guidance
and examinations generally focus on servicers' appropriate valuation
of any properties acquired through foreclosure and their activities to
market and sell them within specified time frames. Generally, federal
regulations allow national banks to hold these REO properties in their
inventory for 5 years, but they may be able to get extensions for up
to an additional 5 years.[Footnote 89] According to regulatory
guidance and agency staff, examiners review whether institutions are
actively marketing foreclosed properties during this time period and
appropriately accounting for the value of these properties. However,
federal regulatory staff indicated that not much oversight is done
specifically related to maintenance of vacant foreclosed properties.
Recently, banking regulators have considered the potential risks that
mortgage servicing activities can pose to institutions and taken more
actions regarding oversight of servicing, some of which may relate to
maintenance of vacant properties, such as the following:
* OCC staff indicated that they have developed new guidance for banks
and examiners that includes potential requirements and actions related
to foreclosed properties. Once issued, OCC staff said that the
guidance will reinforce expectations for banks to consider the legal,
safety and soundness, and community impacts of foreclosed properties
in their policies and procedures. As of October 2011, the guidance was
not yet finalized, but was expected to be issued soon.
* Federal banking regulators conducted specific reviews of certain
servicers' foreclosure activities in response to the foreclosure
process deficiencies that various mortgage servicers publicly
announced beginning in September 2010. These reviews revealed severe
deficiencies with the servicers' document preparation and oversight of
their internal foreclosure processes.[Footnote 90] Regulators issued
formal enforcement orders to these servicers, requiring them to take
corrective actions and assess the compliance, legal, and reputational
risks in their servicing operations, which include the risks of
deficiencies in foreclosure activity and assisting delinquent
borrowers to remain in their homes. OCC and Federal Reserve staff said
that they are reviewing these assessments and expect servicers to
consider legal or liability risks of vacant and abandoned REO
properties in these assessments. In addition, we previously reported
that regulatory staff will substantially revise their supervisory
strategy to assess servicer compliance with the enforcement orders and
implementation of corrective actions.[Footnote 91]
* In September 2010, the Federal Reserve developed draft exam
guidelines that examiners may follow that include a question on
whether servicers have policies and procedures in place to address
abandoned or otherwise neglected collateral properties. Federal
Reserve staff said that consumer compliance examiners are testing and
revising these guidelines during exams of loan modifications that were
scheduled this year and have found that institutions examined so far
generally have specific policies for such properties that they follow,
although in a few instances examiners instructed institutions to
revise their policies to make them more specific.
* FDIC issued guidance in 2008 reminding the institutions it oversees
of the importance of properly maintaining foreclosed properties in
anticipation of an increase in foreclosures due to the 2007 economic
crisis. The guidance notes that institutions' policies and procedures
related to acquiring, holding, and disposing of properties acquired
through foreclosure should ensure that their interests are protected
while mitigating the impact on the value of surrounding properties.
Specifically, this guidance states that properties should be
maintained in a manner that complies with local property and fire
codes and that efforts to maintain properties in marketable condition
not only improve an institution's ability to obtain the best price for
the property but also minimize liability and reputation risk.
* Federal bank regulators, Treasury, HUD, and the Bureau of Consumer
Financial Protection also are developing national servicing standards.
Regulatory staff could not say whether issues related to the
maintenance of vacant properties would be included in any final
standards. However, they said that discussions so far have focused on
consumers' interactions with servicers on their delinquent loans and
avoiding foreclosure, not processes following foreclosure.
In addition to federal banking regulators, FHA and the GSEs oversee
various aspects of mortgage servicing and may penalize servicers if
they do not comply with servicing guidelines. FHA, which oversees
mortgage servicers that manage the home mortgage loans insured by that
agency, uses a risk-based approach to monitor those institutions'
compliance with program servicing guidelines, such as guidelines for
maintaining properties. According to FHA staff, past servicer reviews
have focused on monitoring compliance with requirements for assisting
delinquent borrowers to remain in their homes by considering loan
modifications, payment plans, or other options to avoid foreclosure.
To provide incentives for servicers to maintain properties according
to the agency's guidelines prior to transferring them to HUD following
the foreclosure sale, the agency may deny or curtail insurance claims
or reconvey a property if it does not meet certain conveyance
requirements. As previously discussed, these properties are generally
in compliance with local laws and ordinances, but HUD officials told
us that the agency may exercise its discretion to use different
methods than the locality requires. Representatives from the GSEs also
reported that they conduct targeted reviews of servicers that focus on
evaluating their processes and procedures. They said that they require
servicers to follow servicing guidelines and proper legal procedures
with respect to all aspects of their business operations as part of
their contractual obligations with the GSEs. They also may pursue a
variety of remedies, such as assessing fees or penalties on servicers,
for failure to comply with the servicing guidelines, but said that
they did not assess fees for maintenance-related issues. Instead,
Fannie Mae officials said that, in cases of properties damaged because
of the servicer's neglect, they may require the servicer to repurchase
the property or reimburse Fannie Mae for any loss in the property's
value. GSE representatives also noted that they train and routinely
monitor the vendors that manage their REO properties to ensure that
they comply with local laws and have third-party companies review
their performance.
FHFA and the GSEs also are evaluating future measures to improve
mortgage servicing. At the direction of their regulator, FHFA, the
GSEs are working together to align their guidelines to servicers to
establish, among other things, consistent timelines and other
requirements.[Footnote 92] In addition, FHFA, in consultation with
Treasury and HUD, is seeking input for planning and market research
purposes on new options for selling REO properties held by Fannie Mae,
Freddie Mac, and FHA to reduce GSE and FHA losses on foreclosed
properties and help stabilize neighborhoods. Options the agencies
requested comments on include renting REO properties to previous
homeowners or other parties or facilitating current tenants becoming
owners. The notice stated that areas with a substantial number of REO
properties and a strong rental market may begin to stabilize by
turning a large number of REO properties into rental housing.[Footnote
93] FHFA is in the process of reviewing comments on such alternatives,
including their risks and any trade-offs involved.
As part of the HAMP program, Treasury oversees participating
servicers' compliance with their contractual obligations under the
program. Treasury conducts compliance audits on all servicers that
participate in the program according to a risk-based schedule. In
addition, as a consequence of reported irregularities in the
foreclosure process in September 2010, Treasury organized a review of
the internal policies and procedures governing preforeclosure
activities at the certain servicers and reiterated servicers'
obligations to follow applicable state laws. Our previous work on HAMP
has shown that Treasury had not finalized policies to hold servicers
accountable for their performance, although Treasury has recently
begun publishing assessments of the performance of the 10 largest
servicers and, as of July 2011, is withholding incentive payments that
servicers receive for making loan modifications from two servicers
until they make substantial improvements in their programs.[Footnote
94] Further, we have found that servicers were not always consistent
in their treatment of borrowers applying for loan modifications.
[Footnote 95] We have made a number of recommendations to Treasury to
help ensure that borrowers are treated consistently and servicers are
held accountable for their performance, which we will continue to
monitor.
Agency Comments and Our Evaluation:
We requested comments on a draft of this report from the Federal
Reserve, Census, HUD, Treasury, Fannie Mae, FDIC, FHFA, Freddie Mac,
OCC, and USPS. We received technical comments from Census, Federal
Reserve, FHFA, Fannie Mae, Freddie Mac, OCC, and FHA, which we
incorporated where appropriate.
We received written comments from Treasury that are presented in
appendix III. The Assistant Secretary for Financial Stability at the
Department of the Treasury noted that the report is informative and
helpful in describing the extent of vacant properties and their
impacts. One of the strategies discussed in our report is requiring
servicers to include vacant property costs to local governments--such
as for police and fire services--into the models used to make loan
modification or foreclosure decisions. The Assistant Secretary's
letter acknowledges, as we noted in the report, that there are certain
challenges associated with holding servicers accountable for such
costs. The Assistant Secretary's letter also states that federal,
state, and local agencies as well as community groups, investors, and
servicers need to analyze appropriate responses to this issue.
As agreed with your office, unless you publicly announce the contents
of this report earlier, we plan no further distribution until 30 days
from the report date. At that time, we will send copies to the
appropriate congressional committees, Census, Fannie Mae, FDIC, FHFA,
Federal Reserve, Freddie Mac, HUD, OCC, Treasury, USPS, and other
interested parties. In addition, the report will be available at no
charge on the GAO website at [hyperlink, http://www.gao.gov].
If you or your staff members have any questions about this report,
please contact me at (202) 512-8678 or sciremj@gao.gov. Contact points
for our Offices of Congressional Relations and Public Affairs may be
found on the last page of this report. Key contributors to this report
are listed in appendix IV.
Sincerely yours,
Signed by:
Mathew J. Scirè:
Director:
Financial Markets and Community Investment:
[End of section]
Appendix I: Objectives, Scope, and Methodology:
This report reviews the costs that foreclosed and unattended vacant
homes create for local communities and the strategies state and local
governments are using to address problems associated with unattended
vacant properties. Specifically, this report addresses (1) trends in
the number of vacant properties and how they relate to the recent
increase in foreclosures; (2) the types of costs that vacant
properties create and who bears the responsibility for these
properties and their costs; and (3) state and local government
strategies for addressing vacant properties and the federal role in
assisting these efforts.
To identify trends in the number of vacant properties and how they
relate to the recent increase in foreclosures, we analyzed data on
vacant residential housing units collected in the 2000 and 2010
decennial censuses. In order to describe the extent of and change in
housing vacancies across states and selected cities from 2000 through
2010, we estimated the number of vacancies in 2000 and 2010 to show
the trend in vacancies over the decade. We estimated the change in
total vacancies and the number of vacancies as a percentage of the
total housing stock between the two censuses. We excluded vacant units
that Census categorized as for seasonal use or for use by migrant
workers because we concluded that these properties, which are
generally occupied for temporary periods, are likely to be maintained.
We downloaded census data from Census 2000 and the 2010 Census from
the Census Bureau's American FactFinder. These data contain the
occupancy status of enumerated households and describe the reason for
the vacancy. The vacancy status is defined as for rent or sale; for
sale only; rented or sold, not occupied; for seasonal, recreational,
or occasional use; for migrant workers; and other vacant.
In addition, we analyzed data compiled from the U.S. Postal Service
(USPS) on vacant addresses as of the second quarter of 2010 to compare
it with Census 2010 data on vacant properties, as a check on Census
data as well as to highlight any interesting characteristics that the
Census data may not identify. We tabulated the total number of
residential vacant addresses at national and state levels, subtracting
out seasonal addresses, and calculated the percentage difference for
each state and the average difference. We did not report the results
of the comparison because of the differences in methodology and
definitions between the two sets of data. We did report our comparison
of the 10 states with the largest number of vacant addresses according
to USPS second quarter 2010 data and the 10 states with the largest
number of nonseasonal residential vacant units according to Census
2010 data.
Users of the report should note that accurately measuring the number
of vacant properties is difficult and that available data all have
limitations. The primary difficulty is identifying whether a property
is actually vacant, which generally is done through physical
inspection of property exteriors, information from neighbors, or
reviews of public utility usage or billing records. No comprehensive
data are available about the duration that properties are vacant. As a
result, measurements of vacant properties should be viewed as general
indicators of the scale of the problem as of the point in time the
given survey was taken. In light of these limitations, we assessed the
reliability of the Census and USPS data by reviewing past GAO and
other assessments of the data and interviewing knowledgeable Census
and USPS officials about their data integrity measures.[Footnote 96]
We determined that these data were sufficiently reliable for use in
the report.
To identify the factors that contributed to the increase in vacant
properties over the last decade, we evaluated data on foreclosures,
unemployment, and population. Specifically, we analyzed data on
foreclosure inventory by state as of the end of 2010 from the Mortgage
Bankers Association National Delinquency Survey. In a previous report
released earlier this year, we assessed the reliability of these same
data by reviewing existing information about the quality of the data,
a previous GAO data reliability assessment that included performing
electronic testing to detect errors in completeness and
reasonableness, and interviewing Mortgage Bankers Association
officials knowledgeable about the data to confirm that the data
collection methodology had not changed since our earlier review.
[Footnote 97] We determined that the data were sufficiently reliable
for purposes of the report. We obtained data on unemployment and
population from the Bureau of Labor Statistics and Census. The federal
statistical agencies of the U.S. government follow the standards and
guidelines for statistical surveys set forth by the Office of
Management and Budget. These standards and guidelines governing
federal statistical agencies are intended to help ensure that their
surveys and studies are designed to produce reliable data as
efficiently as possible and that their methods are documented and
results presented in a manner that makes the data as accessible and
useful as possible. In addition, we reviewed literature on the effects
of foreclosures and vacant properties on property values. We also
interviewed local government and nongovernmental officials about the
factors contributing to properties becoming vacant in their areas. To
further corroborate the association between increases in the number of
vacant housing units categorized as "other vacant" between the 2000
and 2010 censuses, and areas of economic distress, we analyzed data
from the Census American Community Survey (ACS) for the period 2005
through 2009 on the percentage of households in a given census tract
with annual income below the appropriate poverty threshold for that
household size and composition as defined by the Census Bureau.
[Footnote 98] We used the ACS data because 2010 poverty data was not
yet available at the time we undertook this analysis. ACS data at the
tract level can be unreliable for reporting for some tracts but the
data were sufficiently reliable for the type of aggregate analysis we
conducted.
To understand the costs that mortgage servicers and lien holders bear
to maintain vacant properties during and after foreclosure, we
analyzed data on property maintenance costs from two housing-related
government-sponsored enterprises (GSE)--Fannie Mae and Freddie Mac--
and HUD's Federal Housing Administration (FHA). Specifically, we
obtained data on the funds the GSEs and FHA reimbursed to servicers
for maintenance of single-family properties secured by GSE-guaranteed
and FHA-insured loans during the foreclosure process from 2005 through
2010. We also obtained data on the payments GSEs made to third-party
contractors for properties in their possession following foreclosure,
for the years 2005 through 2010. We obtained data from HUD on the
payments made to third-party contractors for fiscal years 2005 and
2010 and the first half of fiscal year 2011 for maintenance of HUD-
owned, single-family properties. To assess the reliability of these
data, we reviewed available documentation and interviewed
knowledgeable GSE and HUD officials. We determined that the data were
sufficiently reliable for use in the report.
To understand the specific costs incurred by localities and strategies
some localities have taken to address these costs, we reviewed
relevant literature and conducted case studies of specific locations.
We reviewed academic and other reports on the effects of vacant and
foreclosed properties on local communities, strategies being used to
address these issues, and the recent trends in fiscal conditions among
states and cities. We categorized the information we gathered from
these various sources to identify the most common types of strategies
and their advantages and disadvantages. We also selected nine
locations from different regions of the country, which had a range of
(1) experiences with vacant properties, including different costs for
maintaining vacant properties; (2) experiences with foreclosures,
including states with judicial and nonjudicial foreclosure processes;
(3) economic conditions, such as unemployment rates; and (4) HUD
evaluations of need for funds under the Neighborhood Stabilization
Program (NSP) and HUD assessments of use of NSP funds. In addition, we
identified from our literature search locations that were taking
innovative approaches to the vacant property problem. We selected
Baltimore, Maryland; Cape Coral, Florida; Chicago, Illinois;
Cleveland, Ohio; Detroit, Michigan; Indianapolis, Indiana; Indio,
California; Las Vegas, Nevada; and Tucson, Arizona. We conducted in-
person site visits to four locations and conducted telephone
interviews in other cities with local government officials and
representatives of nonprofit and community development organizations.
In addition, we interviewed code enforcement officials about the
impact of state laws in New York and New Jersey, states that recently
enacted laws related to the maintenance of vacant properties in
foreclosure. Although we selected these locations to provide broad
representation of conditions related to vacant properties, these
locations may not necessarily be representative of all localities
nationwide. As a result, we could not generalize the results of our
analysis to all states and localities. Officials in two of the
locations provided us with pictures and examples of vacant properties.
In site visits to Baltimore, Chicago, the Las Vegas area, and Tucson,
and during prior visits to Cape Coral and Detroit, we visited selected
vacant and foreclosed properties and took pictures to document
examples of property conditions.
To inform our work on each of these objectives, we also conducted
other interviews. We interviewed staff from one of the largest
maintenance companies that conducts property inspections and
maintenance on behalf of services nationwide, academic researchers,
GSE staff, and five mortgage servicers--including some of the largest
firms and those that specialized in subprime loans. In addition, we
interviewed representatives of federal agencies, including the Board
of Governors of the Federal Reserve System (Federal Reserve), Federal
Deposit Insurance Corporation (FDIC), Office of the Comptroller of the
Currency (OCC), Department of Housing and Urban Development (HUD),
Federal Housing Finance Agency (FHFA), and Treasury.
We conducted this performance audit from November 2010 through
November 2011 in accordance with generally accepted government
auditing standards. Those standards require that we plan and perform
the audit to obtain sufficient, appropriate evidence to provide a
reasonable basis for our findings and conclusions based on our audit
objectives. We believe that the evidence obtained provides a
reasonable basis for our findings and conclusions based on our audit
objectives.
[End of section]
Appendix II: U.S. Decennial Census Data on Residential Vacancies, 2000
and 2010:
The data below were compiled from Census 2000 and 2010 on residential
vacancies and are available through the U.S. Census Bureau's American
FactFinder website. Table 5 shows total housing units, total
vacancies, and vacancies by category. These categories include vacant
units for rent or sale; for sale only; for seasonal, recreational, or
occasional use; for migrant workers; or other. The 2000 Census used a
category of vacant units called "rented or sold, not occupied" while
the 2010 Census used separate categories for vacant units identified
as "rented, not occupied" and "sold, not occupied." We combined those
two categories for 2010 for comparative purposes. Table 5 also shows
the share of the total housing stock that was vacant in each time
period, for all vacancies, as well as nonseasonal vacancies, which
excludes those used seasonally or for migrant workers. The table shows
the percentage change between 2000 and 2010 for each category of data.
Census data do not distinguish between single-and multiunit
residential properties.
Table 5: Census Data on Vacant Residential Units, 2000 and 2010:
State: United States;
Year: 2010;
Housing units: 131,704,730;
Total vacancies: 14,988,438;
For rent or sale: 4,137,567;
For sale only: 1,896,796;
Rented or sold, not occupied: 627,857;
For seasonal, recreational, or occasional use: 4,649,298;
For migrant workers: 24,161;
Other vacant: 3,652,759;
Total nonseasonal vacant units: 10,314,979;
Vacant units' share of housing stock: 11.4;
Nonseasonal vacant units' share of housing stock: 7.8.
Year: 2000;
Housing units: 115,904,641;
Total vacancies: 10,424,540;
For rent or sale: 2,614,652;
For sale only: 1,204,318;
Rented or sold, not occupied: 702,435;
For seasonal, recreational, or occasional use: 3,578,718;
For migrant workers: 25,498;
Other vacant: 2,298,919;
Total nonseasonal vacant units: 6,820,324;
Vacant units' share of housing stock: 9.0;
Nonseasonal vacant units' share of housing stock: 5.9.
Percent change:
Year: 2000-2010;
Housing units: 13.6%;
Total vacancies: 43.8;
For rent or sale: 58.2;
For sale only: 57.5;
Rented or sold, not occupied: -10.6;
For seasonal, recreational, or occasional use: 29.9;
For migrant workers: -5.2;
Other vacant: 58.9;
Total nonseasonal vacant units: 51.2;
Vacant units' share of housing stock: 26.5;
Nonseasonal vacant units' share of housing stock: 33.1.
State: Alabama;
Year: 2010;
Housing units: 2,171,853;
Total vacancies: 288,062;
For rent or sale: 79,265;
For sale only: 35,903;
Rented or sold, not occupied: 12,988;
For seasonal, recreational, or occasional use: 63,890;
For migrant workers: 238;
Other vacant: 95,778;
Total nonseasonal vacant units: 223,934;
Vacant units' share of housing stock: 13.3;
Nonseasonal vacant units' share of housing stock: 10.3.
Year: 2000;
Housing units: 1,963,711;
Total vacancies: 226,631;
For rent or sale: 64,091;
For sale only: 25,858;
Rented or sold, not occupied: 15,560;
For seasonal, recreational, or occasional use: 47,205;
For migrant workers: 369;
Other vacant: 73,548;
Total nonseasonal vacant units: 179,057;
Vacant units' share of housing stock: 11.5;
Nonseasonal vacant units' share of housing stock: 9.1.
Percent change:
Year: 2000-2010;
Housing units: 10.6%;
Total vacancies: 27.1;
For rent or sale: 23.7;
For sale only: 38.8;
Rented or sold, not occupied: -16.5;
For seasonal, recreational, or occasional use: 35.3;
For migrant workers: -35.5;
Other vacant: 30.2;
Total nonseasonal vacant units: 25.1;
Vacant units' share of housing stock: 14.9;
Nonseasonal vacant units' share of housing stock: 13.1.
State: Alaska;
Year: 2010;
Housing units: 306,967;
Total vacancies: 48,909;
For rent or sale: 6,729;
For sale only: 2,876;
Rented or sold, not occupied: 1,673;
For seasonal, recreational, or occasional use: 27,901;
For migrant workers: 362;
Other vacant: 9,368;
Total nonseasonal vacant units: 20,646;
Vacant units' share of housing stock: 15.9;
Nonseasonal vacant units' share of housing stock: 6.7.
Year: 2000;
Housing units: 260,978;
Total vacancies: 39,378;
For rent or sale: 7,036;
For sale only: 2,612;
Rented or sold, not occupied: 2,066;
For seasonal, recreational, or occasional use: 21,474;
For migrant workers: 180;
Other vacant: 6,010;
Total nonseasonal vacant units: 17,724;
Vacant units' share of housing stock: 15.1;
Nonseasonal vacant units' share of housing stock: 6.8.
Percent change:
Year: 2000-2010;
Housing units: 17.6%;
Total vacancies: 24.2;
For rent or sale: -4.4;
For sale only: 10.1;
Rented or sold, not occupied: -19.0;
For seasonal, recreational, or occasional use: 29.9;
For migrant workers: 101.1;
Other vacant: 55.9;
Total nonseasonal vacant units: 16.5;
Vacant units' share of housing stock: 5.6;
Nonseasonal vacant units' share of housing stock: -1.0.
State: Arizona;
Year: 2010;
Housing units: 2,844,526;
Total vacancies: 463,536;
For rent or sale: 120,490;
For sale only: 64,407;
Rented or sold, not occupied: 15,999;
For seasonal, recreational, or occasional use: 184,327;
For migrant workers: 538;
Other vacant: 77,775;
Total nonseasonal vacant units: 278,671;
Vacant units' share of housing stock: 16.3;
Nonseasonal vacant units' share of housing stock: 9.8.
Year: 2000;
Housing units: 2,189,189;
Total vacancies: 287,862;
For rent or sale: 61,781;
For sale only: 27,775;
Rented or sold, not occupied: 12,679;
For seasonal, recreational, or occasional use: 141,965;
For migrant workers: 636;
Other vacant: 43,026;
Total nonseasonal vacant units: 145,261;
Vacant units' share of housing stock: 13.1;
Nonseasonal vacant units' share of housing stock: 6.6.
Percent change:
Year: 2000-2010;
Housing units: 29.9%;
Total vacancies: 61.0;
For rent or sale: 95.0;
For sale only: 131.9;
Rented or sold, not occupied: 26.2;
For seasonal, recreational, or occasional use: 29.8;
For migrant workers: -15.4;
Other vacant: 80.8;
Total nonseasonal vacant units: 91.8;
Vacant units' share of housing stock: 23.9;
Nonseasonal vacant units' share of housing stock: 47.6.
State: Arkansas;
Year: 2010;
Housing units: 1,316,299;
Total vacancies: 169,215;
For rent or sale: 46,443;
For sale only: 18,500;
Rented or sold, not occupied: 7,134;
For seasonal, recreational, or occasional use: 38,153;
For migrant workers: 345;
Other vacant: 58,640;
Total nonseasonal vacant units: 130,717;
Vacant units' share of housing stock: 12.9;
Nonseasonal vacant units' share of housing stock: 9.9.
Year: 2000;
Housing units: 1,173,043;
Total vacancies: 130,347;
For rent or sale: 33,740;
For sale only: 18,238;
Rented or sold, not occupied: 8,974;
For seasonal, recreational, or occasional use: 29,012;
For migrant workers: 377;
Other vacant: 40,006;
Total nonseasonal vacant units: 100,958;
Vacant units' share of housing stock: 11.1;
Nonseasonal vacant units' share of housing stock: 8.6.
Percent change:
Year: 2000-2010;
Housing units: 12.2%;
Total vacancies: 29.8;
For rent or sale: 37.6;
For sale only: 1.4;
Rented or sold, not occupied: -20.5;
For seasonal, recreational, or occasional use: 31.5;
For migrant workers: -8.5;
Other vacant: 46.6;
Total nonseasonal vacant units: 29.5;
Vacant units' share of housing stock: 15.7;
Nonseasonal vacant units' share of housing stock: 15.4.
State: California;
Year: 2010;
Housing units: 13,680,081;
Total vacancies: 1,102,583;
For rent or sale: 374,610;
For sale only: 154,775;
Rented or sold, not occupied: 54,635;
For seasonal, recreational, or occasional use: 302,815;
For migrant workers: 2,100;
Other vacant: 213,648;
Total nonseasonal vacant units: 797,668;
Vacant units' share of housing stock: 8.1;
Nonseasonal vacant units' share of housing stock: 5.8.
Year: 2000;
Housing units: 12,214,549;
Total vacancies: 711,679;
For rent or sale: 190,321;
For sale only: 92,197;
Rented or sold, not occupied: 50,846;
For seasonal, recreational, or occasional use: 236,857;
For migrant workers: 2,205;
Other vacant: 139,253;
Total nonseasonal vacant units: 472,617;
Vacant units' share of housing stock: 5.8;
Nonseasonal vacant units' share of housing stock: 3.9.
Percent change:
Year: 2000-2010;
Housing units: 12.0%;
Total vacancies: 54.9;
For rent or sale: 96.8;
For sale only: 67.9;
Rented or sold, not occupied: 7.5;
For seasonal, recreational, or occasional use: 27.8;
For migrant workers: -4.8;
Other vacant: 53.4;
Total nonseasonal vacant units: 68.8;
Vacant units' share of housing stock: 38.3;
Nonseasonal vacant units' share of housing stock: 50.7.
State: Colorado;
Year: 2010;
Housing units: 2,212,898;
Total vacancies: 240,030;
For rent or sale: 57,644;
For sale only: 32,673;
Rented or sold, not occupied: 8,476;
For seasonal, recreational, or occasional use: 101,965;
For migrant workers: 524;
Other vacant: 38,748;
Total nonseasonal vacant units: 137,541;
Vacant units' share of housing stock: 10.8;
Nonseasonal vacant units' share of housing stock: 6.2.
Year: 2000;
Housing units: 1,808,037;
Total vacancies: 149,799;
For rent or sale: 31,852;
For sale only: 16,142;
Rented or sold, not occupied: 8,116;
For seasonal, recreational, or occasional use: 72,263;
For migrant workers: 449;
Other vacant: 20,977;
Total nonseasonal vacant units: 77,087;
Vacant units' share of housing stock: 8.3;
Nonseasonal vacant units' share of housing stock: 4.3.
Percent change:
Year: 2000-2010;
Housing units: 22.4%;
Total vacancies: 60.2;
For rent or sale: 81.0;
For sale only: 102.4;
Rented or sold, not occupied: 4.4;
For seasonal, recreational, or occasional use: 41.1;
For migrant workers: 16.7;
Other vacant: 84.7;
Total nonseasonal vacant units: 78.4;
Vacant units' share of housing stock: 30.9;
Nonseasonal vacant units' share of housing stock: 45.8.
State: Connecticut;
Year: 2010;
Housing units: 1,487,891;
Total vacancies: 116,804;
For rent or sale: 40,004;
For sale only: 15,564;
Rented or sold, not occupied: 5,689;
For seasonal, recreational, or occasional use: 29,618;
For migrant workers: 55;
Other vacant: 25,874;
Total nonseasonal vacant units: 87,131;
Vacant units' share of housing stock: 7.9;
Nonseasonal vacant units' share of housing stock: 5.9.
Year: 2000;
Housing units: 1,385,975;
Total vacancies: 84,305;
For rent or sale: 25,575;
For sale only: 9,305;
Rented or sold, not occupied: 6,320;
For seasonal, recreational, or occasional use: 23,379;
For migrant workers: 138;
Other vacant: 19,588;
Total nonseasonal vacant units: 60,788;
Vacant units' share of housing stock: 6.1;
Nonseasonal vacant units' share of housing stock: 4.4.
Percent change:
Year: 2000-2010;
Housing units: 7.4%;
Total vacancies: 38.5;
For rent or sale: 56.4;
For sale only: 67.3;
Rented or sold, not occupied: -10.0;
For seasonal, recreational, or occasional use: 26.7;
For migrant workers: -60.1;
Other vacant: 32.1;
Total nonseasonal vacant units: 43.3;
Vacant units' share of housing stock: 29.1;
Nonseasonal vacant units' share of housing stock: 33.5.
State: Delaware;
Year: 2010;
Housing units: 405,885;
Total vacancies: 63,588;
For rent or sale: 11,399;
For sale only: 5,985;
Rented or sold, not occupied: 1,687;
For seasonal, recreational, or occasional use: 35,939;
For migrant workers: 43;
Other vacant: 8,535;
Total nonseasonal vacant units: 27,606;
Vacant units' share of housing stock: 15.7;
Nonseasonal vacant units' share of housing stock: 6.8.
Year: 2000;
Housing units: 343,072;
Total vacancies: 44,336;
For rent or sale: 7,393;
For sale only: 3,273;
Rented or sold, not occupied: 1,693;
For seasonal, recreational, or occasional use: 25,977;
For migrant workers: 53;
Other vacant: 5,947;
Total nonseasonal vacant units: 18,306;
Vacant units' share of housing stock: 12.9;
Nonseasonal vacant units' share of housing stock: 5.3.
Percent change:
Year: 2000-2010;
Housing units: 18.3%;
Total vacancies: 43.4;
For rent or sale: 54.2;
For sale only: 82.9;
Rented or sold, not occupied: -0.4;
For seasonal, recreational, or occasional use: 38.3;
For migrant workers: -18.9;
Other vacant: 43.5;
Total nonseasonal vacant units: 50.8;
Vacant units' share of housing stock: 21.2;
Nonseasonal vacant units' share of housing stock: 27.5.
State: District of Columbia;
Year: 2010;
Housing units: 296,719;
Total vacancies: 30,012;
For rent or sale: 13,393;
For sale only: 3,930;
Rented or sold, not occupied: 1,933;
For seasonal, recreational, or occasional use: 3,537;
For migrant workers: 8;
Other vacant: 7,211;
Total nonseasonal vacant units: 26,467;
Vacant units' share of housing stock: 10.1;
Nonseasonal vacant units' share of housing stock: 8.9.
Year: 2000;
Housing units: 274,845;
Total vacancies: 26,507;
For rent or sale: 9,202;
For sale only: 3,021;
Rented or sold, not occupied: 2,667;
For seasonal, recreational, or occasional use: 2,207;
For migrant workers: 47;
Other vacant: 9,363;
Total nonseasonal vacant units: 24,253;
Vacant units' share of housing stock: 9.6;
Nonseasonal vacant units' share of housing stock: 8.8.
Percent change:
Year: 2000-2010;
Housing units: 8.0%;
Total vacancies: 13.2;
For rent or sale: 45.5;
For sale only: 30.1;
Rented or sold, not occupied: -27.5;
For seasonal, recreational, or occasional use: 60.3;
For migrant workers: -83.0;
Other vacant: -23.0;
Total nonseasonal vacant units: 9.1;
Vacant units' share of housing stock: 4.9;
Nonseasonal vacant units' share of housing stock: 1.1.
State: Florida;
Year: 2010;
Housing units: 8,989,580;
Total vacancies: 1,568,778;
For rent or sale: 371,626;
For sale only: 198,232;
Rented or sold, not occupied: 47,349;
For seasonal, recreational, or occasional use: 657,070;
For migrant workers: 1,541;
Other vacant: 292,960;
Total nonseasonal vacant units: 910,167;
Vacant units' share of housing stock: 17.5;
Nonseasonal vacant units' share of housing stock: 10.1.
Year: 2000;
Housing units: 7,302,947;
Total vacancies: 965,018;
For rent or sale: 195,336;
For sale only: 101,667;
Rented or sold, not occupied: 53,429;
For seasonal, recreational, or occasional use: 482,944;
For migrant workers: 1,881;
Other vacant: 129,761;
Total nonseasonal vacant units: 480,193;
Vacant units' share of housing stock: 13.2;
Nonseasonal vacant units' share of housing stock: 6.6.
Percent change:
Year: 2000-2010;
Housing units: 23.1%;
Total vacancies: 62.6;
For rent or sale: 90.2;
For sale only: 95.0;
Rented or sold, not occupied: -11.4;
For seasonal, recreational, or occasional use: 36.1;
For migrant workers: -18.1;
Other vacant: 125.8;
Total nonseasonal vacant units: 89.5;
Vacant units' share of housing stock: 32.1;
Nonseasonal vacant units' share of housing stock: 54.0.
State: Georgia;
Year: 2010;
Housing units: 4,088,801;
Total vacancies: 503,217;
For rent or sale: 174,416;
For sale only: 83,852;
Rented or sold, not occupied: 19,910;
For seasonal, recreational, or occasional use: 81,511;
For migrant workers: 854;
Other vacant: 142,674;
Total nonseasonal vacant units: 420,852;
Vacant units' share of housing stock: 12.3;
Nonseasonal vacant units' share of housing stock: 10.3.
Year: 2000;
Housing units: 3,281,737;
Total vacancies: 275,368;
For rent or sale: 86,905;
For sale only: 38,440;
Rented or sold, not occupied: 20,353;
For seasonal, recreational, or occasional use: 50,064;
For migrant workers: 969;
Other vacant: 78,637;
Total nonseasonal vacant units: 224,335;
Vacant units' share of housing stock: 8.4;
Nonseasonal vacant units' share of housing stock: 6.8.
Percent change:
Year: 2000-2010;
Housing units: 24.6%;
Total vacancies: 82.7;
For rent or sale: 100.7;
For sale only: 118.1;
Rented or sold, not occupied: -2.2;
For seasonal, recreational, or occasional use: 62.8;
For migrant workers: -11.9;
Other vacant: 81.4;
Total nonseasonal vacant units: 87.6;
Vacant units' share of housing stock: 46.7;
Nonseasonal vacant units' share of housing stock: 50.6.
State: Hawaii;
Year: 2010;
Housing units: 519,508;
Total vacancies: 64,170;
For rent or sale: 16,441;
For sale only: 4,277;
Rented or sold, not occupied: 2,105;
For seasonal, recreational, or occasional use: 30,079;
For migrant workers: 117;
Other vacant: 11,151;
Total nonseasonal vacant units: 33,974;
Vacant units' share of housing stock: 12.4;
Nonseasonal vacant units' share of housing stock: 6.5.
Year: 2000;
Housing units: 460,542;
Total vacancies: 57,302;
For rent or sale: 15,699;
For sale only: 3,720;
Rented or sold, not occupied: 2,683;
For seasonal, recreational, or occasional use: 25,584;
For migrant workers: 57;
Other vacant: 9,559;
Total nonseasonal vacant units: 31,661;
Vacant units' share of housing stock: 12.4;
Nonseasonal vacant units' share of housing stock: 6.9.
Percent change:
Year: 2000-2010;
Housing units: 12.8%;
Total vacancies: 12.0;
For rent or sale: 4.7;
For sale only: 15.0;
Rented or sold, not occupied: -21.5;
For seasonal, recreational, or occasional use: 17.6;
For migrant workers: 105.3;
Other vacant: 16.7;
Total nonseasonal vacant units: 7.3;
Vacant units' share of housing stock: -0.7;
Nonseasonal vacant units' share of housing stock: -4.9.
State: Idaho;
Year: 2010;
Housing units: 667,796;
Total vacancies: 88,388;
For rent or sale: 16,360;
For sale only: 12,814;
Rented or sold, not occupied: 3,174;
For seasonal, recreational, or occasional use: 41,660;
For migrant workers: 632;
Other vacant: 13,748;
Total nonseasonal vacant units: 46,096;
Vacant units' share of housing stock: 13.2;
Nonseasonal vacant units' share of housing stock: 6.9.
Year: 2000;
Housing units: 527,824;
Total vacancies: 58,179;
For rent or sale: 10,656;
For sale only: 7,682;
Rented or sold, not occupied: 2,725;
For seasonal, recreational, or occasional use: 27,478;
For migrant workers: 721;
Other vacant: 8,917;
Total nonseasonal vacant units: 29,980;
Vacant units' share of housing stock: 11.0;
Nonseasonal vacant units' share of housing stock: 5.7.
Percent change:
Year: 2000-2010;
Housing units: 26.5%;
Total vacancies: 51.9;
For rent or sale: 53.5;
For sale only: 66.8;
Rented or sold, not occupied: 16.5;
For seasonal, recreational, or occasional use: 51.6;
For migrant workers: -12.3;
Other vacant: 54.2;
Total nonseasonal vacant units: 53.8;
Vacant units' share of housing stock: 20.1;
Nonseasonal vacant units' share of housing stock: 21.5.
State: Illinois;
Year: 2010;
Housing units: 5,296,715;
Total vacancies: 459,743;
For rent or sale: 158,882;
For sale only: 82,739;
Rented or sold, not occupied: 24,675;
For seasonal, recreational, or occasional use: 47,289;
For migrant workers: 315;
Other vacant: 145,843;
Total nonseasonal vacant units: 412,139;
Vacant units' share of housing stock: 8.7;
Nonseasonal vacant units' share of housing stock: 7.8.
Year: 2000;
Housing units: 4,885,615;
Total vacancies: 293,836;
For rent or sale: 99,019;
For sale only: 46,896;
Rented or sold, not occupied: 31,689;
For seasonal, recreational, or occasional use: 29,712;
For migrant workers: 407;
Other vacant: 86,113;
Total nonseasonal vacant units: 263,717;
Vacant units' share of housing stock: 6.0;
Nonseasonal vacant units' share of housing stock: 5.4.
Percent change:
Year: 2000-2010;
Housing units: 8.4%;
Total vacancies: 56.5;
For rent or sale: 60.5;
For sale only: 76.4;
Rented or sold, not occupied: -22.1;
For seasonal, recreational, or occasional use: 59.2;
For migrant workers: -22.6;
Other vacant: 69.4;
Total nonseasonal vacant units: 56.3;
Vacant units' share of housing stock: 44.3;
Nonseasonal vacant units' share of housing stock: 44.2.
State: Indiana;
Year: 2010;
Housing units: 2,795,541;
Total vacancies: 293,387;
For rent or sale: 93,029;
For sale only: 46,410;
Rented or sold, not occupied: 14,721;
For seasonal, recreational, or occasional use: 45,571;
For migrant workers: 200;
Other vacant: 93,456;
Total nonseasonal vacant units: 247,616;
Vacant units' share of housing stock: 10.5;
Nonseasonal vacant units' share of housing stock: 8.9.
Year: 2000;
Housing units: 2,532,319;
Total vacancies: 196,013;
For rent or sale: 64,363;
For sale only: 29,816;
Rented or sold, not occupied: 17,432;
For seasonal, recreational, or occasional use: 33,803;
For migrant workers: 179;
Other vacant: 50,420;
Total nonseasonal vacant units: 162,031;
Vacant units' share of housing stock: 7.7;
Nonseasonal vacant units' share of housing stock: 6.4.
Percent change:
Year: 2000-2010;
Housing units: 10.4%;
Total vacancies: 49.7;
For rent or sale: 44.5;
For sale only: 55.7;
Rented or sold, not occupied: -15.6;
For seasonal, recreational, or occasional use: 34.8;
For migrant workers: 11.7;
Other vacant: 85.4;
Total nonseasonal vacant units: 52.8;
Vacant units' share of housing stock: 35.6;
Nonseasonal vacant units' share of housing stock: 38.4.
State: Iowa;
Year: 2010;
Housing units: 1,336,417;
Total vacancies: 114,841;
For rent or sale: 31,812;
For sale only: 18,405;
Rented or sold, not occupied: 7,358;
For seasonal, recreational, or occasional use: 21,020;
For migrant workers: 87;
Other vacant: 36,159;
Total nonseasonal vacant units: 93,734;
Vacant units' share of housing stock: 8.6;
Nonseasonal vacant units' share of housing stock: 7.0.
Year: 2000;
Housing units: 1,232,511;
Total vacancies: 83,235;
For rent or sale: 23,272;
For sale only: 14,067;
Rented or sold, not occupied: 7,444;
For seasonal, recreational, or occasional use: 16,472;
For migrant workers: 77;
Other vacant: 21,903;
Total nonseasonal vacant units: 66,686;
Vacant units' share of housing stock: 6.8;
Nonseasonal vacant units' share of housing stock: 5.4.
Percent change:
Year: 2000-2010;
Housing units: 8.4%;
Total vacancies: 38.0;
For rent or sale: 36.7;
For sale only: 30.8;
Rented or sold, not occupied: -1.2;
For seasonal, recreational, or occasional use: 27.6;
For migrant workers: 13.0;
Other vacant: 65.1;
Total nonseasonal vacant units: 40.6;
Vacant units' share of housing stock: 27.2;
Nonseasonal vacant units' share of housing stock: 29.6.
State: Kansas;
Year: 2010;
Housing units: 1,233,215;
Total vacancies: 121,119;
For rent or sale: 40,445;
For sale only: 16,286;
Rented or sold, not occupied: 7,229;
For seasonal, recreational, or occasional use: 12,763;
For migrant workers: 129;
Other vacant: 44,267;
Total nonseasonal vacant units: 108,227;
Vacant units' share of housing stock: 9.8;
Nonseasonal vacant units' share of housing stock: 8.8.
Year: 2000;
Housing units: 1,131,200;
Total vacancies: 93,309;
For rent or sale: 30,940;
For sale only: 14,821;
Rented or sold, not occupied: 7,845;
For seasonal, recreational, or occasional use: 9,639;
For migrant workers: 137;
Other vacant: 29,927;
Total nonseasonal vacant units: 83,533;
Vacant units' share of housing stock: 8.2;
Nonseasonal vacant units' share of housing stock: 7.4.
Percent change:
Year: 2000-2010;
Housing units: 9.0%;
Total vacancies: 29.8;
For rent or sale: 30.7;
For sale only: 9.9;
Rented or sold, not occupied: -7.9;
For seasonal, recreational, or occasional use: 32.4;
For migrant workers: -5.8;
Other vacant: 47.9;
Total nonseasonal vacant units: 29.6;
Vacant units' share of housing stock: 19.1;
Nonseasonal vacant units' share of housing stock: 18.8.
State: Kentucky;
Year: 2010;
Housing units: 1,927,164;
Total vacancies: 207,199;
For rent or sale: 56,960;
For sale only: 27,286;
Rented or sold, not occupied: 11,746;
For seasonal, recreational, or occasional use: 38,616;
For migrant workers: 627;
Other vacant: 71,964;
Total nonseasonal vacant units: 167,956;
Vacant units' share of housing stock: 10.8;
Nonseasonal vacant units' share of housing stock: 8.7.
Year: 2000;
Housing units: 1,750,927;
Total vacancies: 160,280;
For rent or sale: 44,268;
For sale only: 20,748;
Rented or sold, not occupied: 13,421;
For seasonal, recreational, or occasional use: 30,420;
For migrant workers: 715;
Other vacant: 50,708;
Total nonseasonal vacant units: 129,145;
Vacant units' share of housing stock: 9.2;
Nonseasonal vacant units' share of housing stock: 7.4.
Percent change:
Year: 2000-2010;
Housing units: 10.1%;
Total vacancies: 29.3;
For rent or sale: 28.7;
For sale only: 31.5;
Rented or sold, not occupied: -12.5;
For seasonal, recreational, or occasional use: 26.9;
For migrant workers: -12.3;
Other vacant: 41.9;
Total nonseasonal vacant units: 30.1;
Vacant units' share of housing stock: 17.5;
Nonseasonal vacant units' share of housing stock: 18.2.
State: Louisiana;
Year: 2010;
Housing units: 1,964,981;
Total vacancies: 236,621;
For rent or sale: 66,857;
For sale only: 21,480;
Rented or sold, not occupied: 10,567;
For seasonal, recreational, or occasional use: 42,253;
For migrant workers: 999;
Other vacant: 94,465;
Total nonseasonal vacant units: 193,369;
Vacant units' share of housing stock: 12.0;
Nonseasonal vacant units' share of housing stock: 9.8.
Year: 2000;
Housing units: 1,847,181;
Total vacancies: 191,128;
For rent or sale: 54,185;
For sale only: 18,097;
Rented or sold, not occupied: 18,144;
For seasonal, recreational, or occasional use: 39,578;
For migrant workers: 525;
Other vacant: 60,599;
Total nonseasonal vacant units: 151,025;
Vacant units' share of housing stock: 10.3;
Nonseasonal vacant units' share of housing stock: 8.2.
Percent change:
Year: 2000-2010;
Housing units: 6.4%;
Total vacancies: 23.8;
For rent or sale: 23.4;
For sale only: 18.7;
Rented or sold, not occupied: -41.8;
For seasonal, recreational, or occasional use: 6.8;
For migrant workers: 90.3;
Other vacant: 55.9;
Total nonseasonal vacant units: 28.0;
Vacant units' share of housing stock: 16.4;
Nonseasonal vacant units' share of housing stock: 20.4.
State: Maine;
Year: 2010;
Housing units: 721,830;
Total vacancies: 164,611;
For rent or sale: 15,738;
For sale only: 9,711;
Rented or sold, not occupied: 3,110;
For seasonal, recreational, or occasional use: 118,310;
For migrant workers: 160;
Other vacant: 17,582;
Total nonseasonal vacant units: 46,141;
Vacant units' share of housing stock: 22.8;
Nonseasonal vacant units' share of housing stock: 6.4.
Year: 2000;
Housing units: 651,901;
Total vacancies: 133,701;
For rent or sale: 11,153;
For sale only: 6,249;
Rented or sold, not occupied: 3,569;
For seasonal, recreational, or occasional use: 101,470;
For migrant workers: 70;
Other vacant: 11,190;
Total nonseasonal vacant units: 32,161;
Vacant units' share of housing stock: 20.5;
Nonseasonal vacant units' share of housing stock: 4.9.
Percent change:
Year: 2000-2010;
Housing units: 10.7%;
Total vacancies: 23.1;
For rent or sale: 41.1;
For sale only: 55.4;
Rented or sold, not occupied: -12.9;
For seasonal, recreational, or occasional use: 16.6;
For migrant workers: 128.6;
Other vacant: 57.1;
Total nonseasonal vacant units: 43.5;
Vacant units' share of housing stock: 11.2;
Nonseasonal vacant units' share of housing stock: 29.6.
State: Maryland;
Year: 2010;
Housing units: 2,378,814;
Total vacancies: 222,403;
For rent or sale: 61,874;
For sale only: 32,883;
Rented or sold, not occupied: 10,328;
For seasonal, recreational, or occasional use: 55,786;
For migrant workers: 177;
Other vacant: 61,355;
Total nonseasonal vacant units: 166,440;
Vacant units' share of housing stock: 9.3;
Nonseasonal vacant units' share of housing stock: 7.0.
Year: 2000;
Housing units: 2,145,283;
Total vacancies: 164,424;
For rent or sale: 41,751;
For sale only: 22,375;
Rented or sold, not occupied: 12,492;
For seasonal, recreational, or occasional use: 38,880;
For migrant workers: 167;
Other vacant: 48,759;
Total nonseasonal vacant units: 125,377;
Vacant units' share of housing stock: 7.7;
Nonseasonal vacant units' share of housing stock: 5.8.
Percent change:
Year: 2000-2010;
Housing units: 10.9%;
Total vacancies: 35.3;
For rent or sale: 48.2;
For sale only: 47.0;
Rented or sold, not occupied: -17.3;
For seasonal, recreational, or occasional use: 43.5;
For migrant workers: 6.0;
Other vacant: 25.8;
Total nonseasonal vacant units: 32.8;
Vacant units' share of housing stock: 22.0;
Nonseasonal vacant units' share of housing stock: 19.7.
State: Massachusetts;
Year: 2010;
Housing units: 2,808,254;
Total vacancies: 261,179;
For rent or sale: 66,673;
For sale only: 25,038;
Rented or sold, not occupied: 10,230;
For seasonal, recreational, or occasional use: 115,630;
For migrant workers: 161;
Other vacant: 43,447;
Total nonseasonal vacant units: 145,388;
Vacant units' share of housing stock: 9.3;
Nonseasonal vacant units' share of housing stock: 5.2.
Year: 2000;
Housing units: 2,621,989;
Total vacancies: 178,409;
For rent or sale: 34,174;
For sale only: 10,861;
Rented or sold, not occupied: 9,218;
For seasonal, recreational, or occasional use: 93,771;
For migrant workers: 194;
Other vacant: 30,191;
Total nonseasonal vacant units: 84,444;
Vacant units' share of housing stock: 6.8;
Nonseasonal vacant units' share of housing stock: 3.2.
Percent change:
Year: 2000-2010;
Housing units: 7.1%;
Total vacancies: 46.4;
For rent or sale: 95.1;
For sale only: 130.5;
Rented or sold, not occupied: 11.0;
For seasonal, recreational, or occasional use: 23.3;
For migrant workers: -17.0;
Other vacant: 43.9;
Total nonseasonal vacant units: 72.2;
Vacant units' share of housing stock: 36.7;
Nonseasonal vacant units' share of housing stock: 60.8.
State: Michigan;
Year: 2010;
Housing units: 4,532,233;
Total vacancies: 659,725;
For rent or sale: 141,687;
For sale only: 77,080;
Rented or sold, not occupied: 24,662;
For seasonal, recreational, or occasional use: 263,071;
For migrant workers: 1,773;
Other vacant: 151,452;
Total nonseasonal vacant units: 394,881;
Vacant units' share of housing stock: 14.6;
Nonseasonal vacant units' share of housing stock: 8.7.
Year: 2000;
Housing units: 4,234,279;
Total vacancies: 448,618;
For rent or sale: 72,805;
For sale only: 44,250;
Rented or sold, not occupied: 27,161;
For seasonal, recreational, or occasional use: 233,922;
For migrant workers: 1,449;
Other vacant: 69,031;
Total nonseasonal vacant units: 213,247;
Vacant units' share of housing stock: 10.6;
Nonseasonal vacant units' share of housing stock: 5.0.
Percent change:
Year: 2000-2010;
Housing units: 7.0%;
Total vacancies: 47.1;
For rent or sale: 94.6;
For sale only: 74.2;
Rented or sold, not occupied: -9.2;
For seasonal, recreational, or occasional use: 12.5;
For migrant workers: 22.4;
Other vacant: 119.4;
Total nonseasonal vacant units: 85.2;
Vacant units' share of housing stock: 37.4;
Nonseasonal vacant units' share of housing stock: 73.0.
State: Minnesota;
Year: 2010;
Housing units: 2,347,201;
Total vacancies: 259,974;
For rent or sale: 48,091;
For sale only: 30,726;
Rented or sold, not occupied: 9,430;
For seasonal, recreational, or occasional use: 130,471;
For migrant workers: 334;
Other vacant: 40,922;
Total nonseasonal vacant units: 129,169;
Vacant units' share of housing stock: 11.1;
Nonseasonal vacant units' share of housing stock: 5.5.
Year: 2000;
Housing units: 2,065,946;
Total vacancies: 170,819;
For rent or sale: 20,452;
For sale only: 13,392;
Rented or sold, not occupied: 8,022;
For seasonal, recreational, or occasional use: 105,609;
For migrant workers: 554;
Other vacant: 22,790;
Total nonseasonal vacant units: 64,656;
Vacant units' share of housing stock: 8.3;
Nonseasonal vacant units' share of housing stock: 3.1.
Percent change:
Year: 2000-2010;
Housing units: 13.6%;
Total vacancies: 52.2;
For rent or sale: 135.1;
For sale only: 129.4;
Rented or sold, not occupied: 17.6;
For seasonal, recreational, or occasional use: 23.5;
For migrant workers: -39.7;
Other vacant: 79.6;
Total nonseasonal vacant units: 99.8;
Vacant units' share of housing stock: 34.0;
Nonseasonal vacant units' share of housing stock: 75.8.
State: Mississippi;
Year: 2010;
Housing units: 1,274,719;
Total vacancies: 158,951;
For rent or sale: 44,735;
For sale only: 16,886;
Rented or sold, not occupied: 6,835;
For seasonal, recreational, or occasional use: 28,867;
For migrant workers: 318;
Other vacant: 61,310;
Total nonseasonal vacant units: 129,766;
Vacant units' share of housing stock: 12.5;
Nonseasonal vacant units' share of housing stock: 10.2.
Year: 2000;
Housing units: 1,161,953;
Total vacancies: 115,519;
For rent or sale: 29,486;
For sale only: 12,456;
Rented or sold, not occupied: 10,035;
For seasonal, recreational, or occasional use: 21,845;
For migrant workers: 299;
Other vacant: 41,398;
Total nonseasonal vacant units: 93,375;
Vacant units' share of housing stock: 9.9;
Nonseasonal vacant units' share of housing stock: 8.0.
Percent change:
Year: 2000-2010;
Housing units: 9.7%;
Total vacancies: 37.6;
For rent or sale: 51.7;
For sale only: 35.6;
Rented or sold, not occupied: -31.9;
For seasonal, recreational, or occasional use: 32.1;
For migrant workers: 6.4;
Other vacant: 48.1;
Total nonseasonal vacant units: 39.0;
Vacant units' share of housing stock: 25.4;
Nonseasonal vacant units' share of housing stock: 26.7.
State: Missouri;
Year: 2010;
Housing units: 2,712,729;
Total vacancies: 337,118;
For rent or sale: 92,946;
For sale only: 44,200;
Rented or sold, not occupied: 15,388;
For seasonal, recreational, or occasional use: 80,374;
For migrant workers: 193;
Other vacant: 104,017;
Total nonseasonal vacant units: 256,551;
Vacant units' share of housing stock: 12.4;
Nonseasonal vacant units' share of housing stock: 9.5.
Year: 2000;
Housing units: 2,442,017;
Total vacancies: 247,423;
For rent or sale: 64,167;
For sale only: 33,775;
Rented or sold, not occupied: 18,843;
For seasonal, recreational, or occasional use: 66,053;
For migrant workers: 262;
Other vacant: 64,323;
Total nonseasonal vacant units: 181,108;
Vacant units' share of housing stock: 10.1;
Nonseasonal vacant units' share of housing stock: 7.4.
Percent change:
Year: 2000-2010;
Housing units: 11.1%;
Total vacancies: 36.3;
For rent or sale: 44.9;
For sale only: 30.9;
Rented or sold, not occupied: -18.3;
For seasonal, recreational, or occasional use: 21.7;
For migrant workers: -26.3;
Other vacant: 61.7;
Total nonseasonal vacant units: 41.7;
Vacant units' share of housing stock: 22.7;
Nonseasonal vacant units' share of housing stock: 27.5.
State: Montana;
Year: 2010;
Housing units: 482,825;
Total vacancies: 73,218;
For rent or sale: 10,082;
For sale only: 5,964;
Rented or sold, not occupied: 2,126;
For seasonal, recreational, or occasional use: 38,510;
For migrant workers: 283;
Other vacant: 16,253;
Total nonseasonal vacant units: 34,425;
Vacant units' share of housing stock: 15.2;
Nonseasonal vacant units' share of housing stock: 7.1.
Year: 2000;
Housing units: 412,633;
Total vacancies: 53,966;
For rent or sale: 9,163;
For sale only: 5,581;
Rented or sold, not occupied: 2,540;
For seasonal, recreational, or occasional use: 24,213;
For migrant workers: 248;
Other vacant: 12,221;
Total nonseasonal vacant units: 29,505;
Vacant units' share of housing stock: 13.1;
Nonseasonal vacant units' share of housing stock: 7.2.
Percent change:
Year: 2000-2010;
Housing units: 17.0%;
Total vacancies: 35.7;
For rent or sale: 10.0;
For sale only: 6.9;
Rented or sold, not occupied: -16.3;
For seasonal, recreational, or occasional use: 59.0;
For migrant workers: 14.1;
Other vacant: 33.0;
Total nonseasonal vacant units: 16.7;
Vacant units' share of housing stock: 16.0;
Nonseasonal vacant units' share of housing stock: -0.3.
State: Nebraska;
Year: 2010;
Housing units: 796,793;
Total vacancies: 75,663;
For rent or sale: 24,404;
For sale only: 9,167;
Rented or sold, not occupied: 4,083;
For seasonal, recreational, or occasional use: 13,881;
For migrant workers: 60;
Other vacant: 24,068;
Total nonseasonal vacant units: 61,722;
Vacant units' share of housing stock: 9.5;
Nonseasonal vacant units' share of housing stock: 7.7.
Year: 2000;
Housing units: 722,668;
Total vacancies: 56,484;
For rent or sale: 17,936;
For sale only: 8,284;
Rented or sold, not occupied: 4,582;
For seasonal, recreational, or occasional use: 11,912;
For migrant workers: 127;
Other vacant: 13,643;
Total nonseasonal vacant units: 44,445;
Vacant units' share of housing stock: 7.8;
Nonseasonal vacant units' share of housing stock: 6.2.
Percent change:
Year: 2000-2010;
Housing units: 10.3%;
Total vacancies: 34.0;
For rent or sale: 36.1;
For sale only: 10.7;
Rented or sold, not occupied: -10.9;
For seasonal, recreational, or occasional use: 16.5;
For migrant workers: -52.8;
Other vacant: 76.4;
Total nonseasonal vacant units: 38.9;
Vacant units' share of housing stock: 21.5;
Nonseasonal vacant units' share of housing stock: 26.0.
State: Nevada;
Year: 2010;
Housing units: 1,173,814;
Total vacancies: 167,564;
For rent or sale: 61,985;
For sale only: 32,949;
Rented or sold, not occupied: 5,254;
For seasonal, recreational, or occasional use: 32,703;
For migrant workers: 242;
Other vacant: 34,431;
Total nonseasonal vacant units: 134,619;
Vacant units' share of housing stock: 14.3;
Nonseasonal vacant units' share of housing stock: 11.5.
Year: 2000;
Housing units: 827,457;
Total vacancies: 76,292;
For rent or sale: 31,635;
For sale only: 12,021;
Rented or sold, not occupied: 4,209;
For seasonal, recreational, or occasional use: 16,526;
For migrant workers: 281;
Other vacant: 11,620;
Total nonseasonal vacant units: 59,485;
Vacant units' share of housing stock: 9.2;
Nonseasonal vacant units' share of housing stock: 7.2.
Percent change:
Year: 2000-2010;
Housing units: 41.9%;
Total vacancies: 119.6;
For rent or sale: 95.9;
For sale only: 174.1;
Rented or sold, not occupied: 24.8;
For seasonal, recreational, or occasional use: 97.9;
For migrant workers: -13.9;
Other vacant: 196.3;
Total nonseasonal vacant units: 126.3;
Vacant units' share of housing stock: 54.8;
Nonseasonal vacant units' share of housing stock: 59.5.
State: New Hampshire;
Year: 2010;
Housing units: 614,754;
Total vacancies: 95,781;
For rent or sale: 13,293;
For sale only: 7,521;
Rented or sold, not occupied: 2,180;
For seasonal, recreational, or occasional use: 63,910;
For migrant workers: 27;
Other vacant: 8,850;
Total nonseasonal vacant units: 31,844;
Vacant units' share of housing stock: 15.6;
Nonseasonal vacant units' share of housing stock: 5.2.
Year: 2000;
Housing units: 547,024;
Total vacancies: 72,418;
For rent or sale: 5,218;
For sale only: 3,252;
Rented or sold, not occupied: 1,898;
For seasonal, recreational, or occasional use: 56,413;
For migrant workers: 29;
Other vacant: 5,608;
Total nonseasonal vacant units: 15,976;
Vacant units' share of housing stock: 13.2;
Nonseasonal vacant units' share of housing stock: 2.9.
Percent change:
Year: 2000-2010;
Housing units: 12.4%;
Total vacancies: 32.3;
For rent or sale: 154.8;
For sale only: 131.3;
Rented or sold, not occupied: 14.9;
For seasonal, recreational, or occasional use: 13.3;
For migrant workers: -6.9;
Other vacant: 57.8;
Total nonseasonal vacant units: 99.3;
Vacant units' share of housing stock: 17.7;
Nonseasonal vacant units' share of housing stock: 77.4.
State: New Jersey;
Year: 2010;
Housing units: 3,553,562;
Total vacancies: 339,202;
For rent or sale: 92,118;
For sale only: 39,260;
Rented or sold, not occupied: 12,723;
For seasonal, recreational, or occasional use: 134,903;
For migrant workers: 156;
Other vacant: 60,042;
Total nonseasonal vacant units: 204,143;
Vacant units' share of housing stock: 9.5;
Nonseasonal vacant units' share of housing stock: 5.7.
Year: 2000;
Housing units: 3,310,275;
Total vacancies: 245,630;
For rent or sale: 49,858;
For sale only: 24,546;
Rented or sold, not occupied: 15,206;
For seasonal, recreational, or occasional use: 109,075;
For migrant workers: 246;
Other vacant: 46,699;
Total nonseasonal vacant units: 136,309;
Vacant units' share of housing stock: 7.4;
Nonseasonal vacant units' share of housing stock: 4.1.
Percent change:
Year: 2000-2010;
Housing units: 7.3%;
Total vacancies: 38.1;
For rent or sale: 84.8;
For sale only: 59.9;
Rented or sold, not occupied: -16.3;
For seasonal, recreational, or occasional use: 23.7;
For migrant workers: -36.6;
Other vacant: 28.6;
Total nonseasonal vacant units: 49.8;
Vacant units' share of housing stock: 28.6;
Nonseasonal vacant units' share of housing stock: 39.5.
State: New Mexico;
Year: 2010;
Housing units: 901,388;
Total vacancies: 109,993;
For rent or sale: 22,150;
For sale only: 11,050;
Rented or sold, not occupied: 3,446;
For seasonal, recreational, or occasional use: 36,612;
For migrant workers: 229;
Other vacant: 36,506;
Total nonseasonal vacant units: 73,152;
Vacant units' share of housing stock: 12.2;
Nonseasonal vacant units' share of housing stock: 8.1.
Year: 2000;
Housing units: 780,579;
Total vacancies: 102,608;
For rent or sale: 26,697;
For sale only: 10,693;
Rented or sold, not occupied: 4,738;
For seasonal, recreational, or occasional use: 31,990;
For migrant workers: 332;
Other vacant: 28,158;
Total nonseasonal vacant units: 70,286;
Vacant units' share of housing stock: 13.1;
Nonseasonal vacant units' share of housing stock: 9.0.
Percent change:
Year: 2000-2010;
Housing units: 15.5%;
Total vacancies: 7.2;
For rent or sale: -17.0;
For sale only: 3.3;
Rented or sold, not occupied: -27.3;
For seasonal, recreational, or occasional use: 14.4;
For migrant workers: -31.0;
Other vacant: 29.6;
Total nonseasonal vacant units: 4.1;
Vacant units' share of housing stock: -7.2;
Nonseasonal vacant units' share of housing stock: -9.9.
State: New York;
Year: 2010;
Housing units: 8,108,103;
Total vacancies: 790,348;
For rent or sale: 200,039;
For sale only: 77,225;
Rented or sold, not occupied: 33,813;
For seasonal, recreational, or occasional use: 289,301;
For migrant workers: 892;
Other vacant: 189,078;
Total nonseasonal vacant units: 500,155;
Vacant units' share of housing stock: 9.7;
Nonseasonal vacant units' share of housing stock: 6.2.
Year: 2000;
Housing units: 7,679,307;
Total vacancies: 622,447;
For rent or sale: 158,569;
For sale only: 59,405;
Rented or sold, not occupied: 40,439;
For seasonal, recreational, or occasional use: 235,043;
For migrant workers: 750;
Other vacant: 128,241;
Total nonseasonal vacant units: 386,654;
Vacant units' share of housing stock: 8.1;
Nonseasonal vacant units' share of housing stock: 5.0.
Percent change:
Year: 2000-2010;
Housing units: 5.6%;
Total vacancies: 27.0;
For rent or sale: 26.2;
For sale only: 30.0;
Rented or sold, not occupied: -16.4;
For seasonal, recreational, or occasional use: 23.1;
For migrant workers: 18.9;
Other vacant: 47.4;
Total nonseasonal vacant units: 29.4;
Vacant units' share of housing stock: 20.3;
Nonseasonal vacant units' share of housing stock: 22.5.
State: North Carolina;
Year: 2010;
Housing units: 4,327,528;
Total vacancies: 582,373;
For rent or sale: 156,587;
For sale only: 71,693;
Rented or sold, not occupied: 21,181;
For seasonal, recreational, or occasional use: 191,508;
For migrant workers: 1,620;
Other vacant: 139,784;
Total nonseasonal vacant units: 389,245;
Vacant units' share of housing stock: 13.5;
Nonseasonal vacant units' share of housing stock: 9.0.
Year: 2000;
Housing units: 3,523,944;
Total vacancies: 391,931;
For rent or sale: 92,893;
For sale only: 44,007;
Rented or sold, not occupied: 26,523;
For seasonal, recreational, or occasional use: 134,870;
For migrant workers: 1,890;
Other vacant: 91,748;
Total nonseasonal vacant units: 255,171;
Vacant units' share of housing stock: 11.1;
Nonseasonal vacant units' share of housing stock: 7.2.
Percent change:
Year: 2000-2010;
Housing units: 22.8%;
Total vacancies: 48.6;
For rent or sale: 68.6;
For sale only: 62.9;
Rented or sold, not occupied: -20.1;
For seasonal, recreational, or occasional use: 42.0;
For migrant workers: -14.3;
Other vacant: 52.4;
Total nonseasonal vacant units: 52.5;
Vacant units' share of housing stock: 21.0;
Nonseasonal vacant units' share of housing stock: 24.2.
State: North Dakota;
Year: 2010;
Housing units: 317,498;
Total vacancies: 36,306;
For rent or sale: 7,422;
For sale only: 2,734;
Rented or sold, not occupied: 1,597;
For seasonal, recreational, or occasional use: 11,483;
For migrant workers: 319;
Other vacant: 12,751;
Total nonseasonal vacant units: 24,504;
Vacant units' share of housing stock: 11.4;
Nonseasonal vacant units' share of housing stock: 7.7.
Year: 2000;
Housing units: 289,677;
Total vacancies: 32,525;
For rent or sale: 7,642;
For sale only: 4,713;
Rented or sold, not occupied: 1,631;
For seasonal, recreational, or occasional use: 8,340;
For migrant workers: 263;
Other vacant: 9,936;
Total nonseasonal vacant units: 23,922;
Vacant units' share of housing stock: 11.2;
Nonseasonal vacant units' share of housing stock: 8.3.
Percent change:
Year: 2000-2010;
Housing units: 9.6%;
Total vacancies: 11.6;
For rent or sale: -2.9;
For sale only: -42.0;
Rented or sold, not occupied: -2.1;
For seasonal, recreational, or occasional use: 37.7;
For migrant workers: 21.3;
Other vacant: 28.3;
Total nonseasonal vacant units: 2.4;
Vacant units' share of housing stock: 1.8;
Nonseasonal vacant units' share of housing stock: -6.5.
State: Ohio;
Year: 2010;
Housing units: 5,127,508;
Total vacancies: 524,073;
For rent or sale: 184,143;
For sale only: 78,089;
Rented or sold, not occupied: 27,389;
For seasonal, recreational, or occasional use: 58,591;
For migrant workers: 346;
Other vacant: 175,515;
Total nonseasonal vacant units: 465,136;
Vacant units' share of housing stock: 10.2;
Nonseasonal vacant units' share of housing stock: 9.1.
Year: 2000;
Housing units: 4,783,051;
Total vacancies: 337,278;
For rent or sale: 125,095;
For sale only: 48,404;
Rented or sold, not occupied: 33,182;
For seasonal, recreational, or occasional use: 47,239;
For migrant workers: 355;
Other vacant: 83,003;
Total nonseasonal vacant units: 289,684;
Vacant units' share of housing stock: 7.1;
Nonseasonal vacant units' share of housing stock: 6.1.
Percent change:
Year: 2000-2010;
Housing units: 7.2%;
Total vacancies: 55.4;
For rent or sale: 47.2;
For sale only: 61.3;
Rented or sold, not occupied: -17.5;
For seasonal, recreational, or occasional use: 24.0;
For migrant workers: -2.5;
Other vacant: 111.5;
Total nonseasonal vacant units: 60.6;
Vacant units' share of housing stock: 44.9;
Nonseasonal vacant units' share of housing stock: 49.8.
State: Oklahoma;
Year: 2010;
Housing units: 1,664,378;
Total vacancies: 203,928;
For rent or sale: 59,264;
For sale only: 22,671;
Rented or sold, not occupied: 11,122;
For seasonal, recreational, or occasional use: 35,187;
For migrant workers: 318;
Other vacant: 75,366;
Total nonseasonal vacant units: 168,423;
Vacant units' share of housing stock: 12.3;
Nonseasonal vacant units' share of housing stock: 10.1.
Year: 2000;
Housing units: 1,514,400;
Total vacancies: 172,107;
For rent or sale: 50,165;
For sale only: 23,725;
Rented or sold, not occupied: 14,228;
For seasonal, recreational, or occasional use: 32,293;
For migrant workers: 232;
Other vacant: 51,464;
Total nonseasonal vacant units: 139,582;
Vacant units' share of housing stock: 11.4;
Nonseasonal vacant units' share of housing stock: 9.2.
Percent change:
Year: 2000-2010;
Housing units: 9.9%;
Total vacancies: 18.5;
For rent or sale: 18.1;
For sale only: -4.4;
Rented or sold, not occupied: -21.8;
For seasonal, recreational, or occasional use: 9.0;
For migrant workers: 37.1;
Other vacant: 46.4;
Total nonseasonal vacant units: 20.7;
Vacant units' share of housing stock: 7.8;
Nonseasonal vacant units' share of housing stock: 9.8.
State: Oregon;
Year: 2010;
Housing units: 1,675,562;
Total vacancies: 156,624;
For rent or sale: 40,193;
For sale only: 24,191;
Rented or sold, not occupied: 7,009;
For seasonal, recreational, or occasional use: 55,473;
For migrant workers: 461;
Other vacant: 29,297;
Total nonseasonal vacant units: 100,690;
Vacant units' share of housing stock: 9.3;
Nonseasonal vacant units' share of housing stock: 6.0.
Year: 2000;
Housing units: 1,452,709;
Total vacancies: 118,986;
For rent or sale: 37,482;
For sale only: 20,349;
Rented or sold, not occupied: 7,158;
For seasonal, recreational, or occasional use: 36,850;
For migrant workers: 333;
Other vacant: 16,814;
Total nonseasonal vacant units: 81,803;
Vacant units' share of housing stock: 8.2;
Nonseasonal vacant units' share of housing stock: 5.6.
Percent change:
Year: 2000-2010;
Housing units: 15.3%;
Total vacancies: 31.6;
For rent or sale: 7.2;
For sale only: 18.9;
Rented or sold, not occupied: -2.1;
For seasonal, recreational, or occasional use: 50.5;
For migrant workers: 38.4;
Other vacant: 74.2;
Total nonseasonal vacant units: 23.1;
Vacant units' share of housing stock: 14.1;
Nonseasonal vacant units' share of housing stock: 6.7.
State: Pennsylvania;
Year: 2010;
Housing units: 5,567,315;
Total vacancies: 548,411;
For rent or sale: 135,262;
For sale only: 64,818;
Rented or sold, not occupied: 29,517;
For seasonal, recreational, or occasional use: 161,582;
For migrant workers: 411;
Other vacant: 156,821;
Total nonseasonal vacant units: 386,418;
Vacant units' share of housing stock: 9.9;
Nonseasonal vacant units' share of housing stock: 6.9.
Year: 2000;
Housing units: 5,249,750;
Total vacancies: 472,747;
For rent or sale: 105,585;
For sale only: 55,891;
Rented or sold, not occupied: 37,494;
For seasonal, recreational, or occasional use: 148,230;
For migrant workers: 386;
Other vacant: 125,161;
Total nonseasonal vacant units: 324,131;
Vacant units' share of housing stock: 9.0;
Nonseasonal vacant units' share of housing stock: 6.2.
Percent change:
Year: 2000-2010;
Housing units: 6.0%;
Total vacancies: 16.0;
For rent or sale: 28.1;
For sale only: 16.0;
Rented or sold, not occupied: -21.3;
For seasonal, recreational, or occasional use: 9.0;
For migrant workers: 6.5;
Other vacant: 25.3;
Total nonseasonal vacant units: 19.2;
Vacant units' share of housing stock: 9.4;
Nonseasonal vacant units' share of housing stock: 12.4.
State: Rhode Island;
Year: 2010;
Housing units: 463,388;
Total vacancies: 49,788;
For rent or sale: 15,763;
For sale only: 5,171;
Rented or sold, not occupied: 1,946;
For seasonal, recreational, or occasional use: 17,077;
For migrant workers: 12;
Other vacant: 9,819;
Total nonseasonal vacant units: 32,699;
Vacant units' share of housing stock: 10.7;
Nonseasonal vacant units' share of housing stock: 7.1.
Year: 2000;
Housing units: 439,837;
Total vacancies: 31,413;
For rent or sale: 8,615;
For sale only: 2,400;
Rented or sold, not occupied: 1,726;
For seasonal, recreational, or occasional use: 12,988;
For migrant workers: 14;
Other vacant: 5,670;
Total nonseasonal vacant units: 18,411;
Vacant units' share of housing stock: 7.1;
Nonseasonal vacant units' share of housing stock: 4.2.
Percent change:
Year: 2000-2010;
Housing units: 5.4%;
Total vacancies: 58.5;
For rent or sale: 83.0;
For sale only: 115.5;
Rented or sold, not occupied: 12.7;
For seasonal, recreational, or occasional use: 31.5;
For migrant workers: -14.3;
Other vacant: 73.2;
Total nonseasonal vacant units: 77.6;
Vacant units' share of housing stock: 50.4;
Nonseasonal vacant units' share of housing stock: 68.6.
State: South Carolina;
Year: 2010;
Housing units: 2,137,683;
Total vacancies: 336,502;
For rent or sale: 92,758;
For sale only: 36,523;
Rented or sold, not occupied: 12,476;
For seasonal, recreational, or occasional use: 112,531;
For migrant workers: 370;
Other vacant: 81,844;
Total nonseasonal vacant units: 223,601;
Vacant units' share of housing stock: 15.7;
Nonseasonal vacant units' share of housing stock: 10.5.
Year: 2000;
Housing units: 1,753,670;
Total vacancies: 219,816;
For rent or sale: 58,176;
For sale only: 21,955;
Rented or sold, not occupied: 15,930;
For seasonal, recreational, or occasional use: 70,198;
For migrant workers: 420;
Other vacant: 53,137;
Total nonseasonal vacant units: 149,198;
Vacant units' share of housing stock: 12.5;
Nonseasonal vacant units' share of housing stock: 8.5.
Percent change:
Year: 2000-2010;
Housing units: 21.9%;
Total vacancies: 53.1;
For rent or sale: 59.4;
For sale only: 66.4;
Rented or sold, not occupied: -21.7;
For seasonal, recreational, or occasional use: 60.3;
For migrant workers: -11.9;
Other vacant: 54.0;
Total nonseasonal vacant units: 49.9;
Vacant units' share of housing stock: 25.6;
Nonseasonal vacant units' share of housing stock: 22.9.
State: South Dakota;
Year: 2,010;
Housing units: 363,438;
Total vacancies: 41,156;
For rent or sale: 10,366;
For sale only: 3,696;
Rented or sold, not occupied: 1,956;
For seasonal, recreational, or occasional use: 13,277;
For migrant workers: 88;
Other vacant: 11,773;
Total nonseasonal vacant units: 27,791;
Vacant units' share of housing stock: 11.3;
Nonseasonal vacant units' share of housing stock: 7.6.
Year: 2,000;
Housing units: 323,208;
Total vacancies: 32,963;
For rent or sale: 8,057;
For sale only: 3,718;
Rented or sold, not occupied: 2,053;
For seasonal, recreational, or occasional use: 9,839;
For migrant workers: 35;
Other vacant: 9,261;
Total nonseasonal vacant units: 23,089;
Vacant units' share of housing stock: 10.2;
Nonseasonal vacant units' share of housing stock: 7.1.
Percent change:
Year: 2000-2010;
Housing units: 12.4%;
Total vacancies: 24.9;
For rent or sale: 28.7;
For sale only: -0.6;
Rented or sold, not occupied: -4.7;
For seasonal, recreational, or occasional use: 34.9;
For migrant workers: 151.4;
Other vacant: 27.1;
Total nonseasonal vacant units: 20.4;
Vacant units' share of housing stock: 11.0;
Nonseasonal vacant units' share of housing stock: 7.0.
State: Tennessee;
Year: 2,010;
Housing units: 2,812,133;
Total vacancies: 318,581;
For rent or sale: 98,370;
For sale only: 47,274;
Rented or sold, not occupied: 14,498;
For seasonal, recreational, or occasional use: 60,778;
For migrant workers: 392;
Other vacant: 97,269;
Total nonseasonal vacant units: 257,411;
Vacant units' share of housing stock: 11.3;
Nonseasonal vacant units' share of housing stock: 9.2.
Year: 2000;
Housing units: 2,439,443;
Total vacancies: 206,538;
For rent or sale: 64,476;
For sale only: 31,876;
Rented or sold, not occupied: 14,838;
For seasonal, recreational, or occasional use: 36,712;
For migrant workers: 442;
Other vacant: 58,194;
Total nonseasonal vacant units: 169,384;
Vacant units' share of housing stock: 8.5;
Nonseasonal vacant units' share of housing stock: 6.9.
Percent change:
Year: 2000-2010;
Housing units: 15.3%;
Total vacancies: 54.2;
For rent or sale: 52.6;
For sale only: 48.3;
Rented or sold, not occupied: -2.3;
For seasonal, recreational, or occasional use: 65.6;
For migrant workers: -11.3;
Other vacant: 67.1;
Total nonseasonal vacant units: 52.0;
Vacant units' share of housing stock: 33.8;
Nonseasonal vacant units' share of housing stock: 31.8.
State: Texas;
Year: 2010;
Housing units: 9,977,436;
Total vacancies: 1,054,503;
For rent or sale: 394,310;
For sale only: 121,430;
Rented or sold, not occupied: 46,946;
For seasonal, recreational, or occasional use: 208,733;
For migrant workers: 2,209;
Other vacant: 280,875;
Total nonseasonal vacant units: 843,561;
Vacant units' share of housing stock: 10.6;
Nonseasonal vacant units' share of housing stock: 8.5.
Year: 2000;
Housing units: 8,157,575;
Total vacancies: 764,221;
For rent or sale: 249,240;
For sale only: 85,732;
Rented or sold, not occupied: 49,625;
For seasonal, recreational, or occasional use: 173,149;
For migrant workers: 3,453;
Other vacant: 203,022;
Total nonseasonal vacant units: 587,619;
Vacant units' share of housing stock: 9.4;
Nonseasonal vacant units' share of housing stock: 7.2.
Percent change:
Year: 2000-2010;
Housing units: 22.3%;
Total vacancies: 38.0;
For rent or sale: 58.2;
For sale only: 41.6;
Rented or sold, not occupied: -5.4;
For seasonal, recreational, or occasional use: 20.6;
For migrant workers: -36.0;
Other vacant: 38.3;
Total nonseasonal vacant units: 43.6;
Vacant units' share of housing stock: 12.8;
Nonseasonal vacant units' share of housing stock: 17.4.
State: Utah;
Year: 2010;
Housing units: 979,709;
Total vacancies: 102,017;
For rent or sale: 20,176;
For sale only: 14,580;
Rented or sold, not occupied: 4,236;
For seasonal, recreational, or occasional use: 47,978;
For migrant workers: 232;
Other vacant: 14,815;
Total nonseasonal vacant units: 53,807;
Vacant units' share of housing stock: 10.4;
Nonseasonal vacant units' share of housing stock: 5.5.
Year: 2000;
Housing units: 768,594;
Total vacancies: 67,313;
For rent or sale: 13,780;
For sale only: 10,586;
Rented or sold, not occupied: 3,333;
For seasonal, recreational, or occasional use: 29,685;
For migrant workers: 138;
Other vacant: 9,791;
Total nonseasonal vacant units: 37,490;
Vacant units' share of housing stock: 8.8;
Nonseasonal vacant units' share of housing stock: 4.9.
Percent change:
Year: 2000-2010;
Housing units: 27.5%;
Total vacancies: 51.6;
For rent or sale: 46.4;
For sale only: 37.7;
Rented or sold, not occupied: 27.1;
For seasonal, recreational, or occasional use: 61.6;
For migrant workers: 68.1;
Other vacant: 51.3;
Total nonseasonal vacant units: 43.5;
Vacant units' share of housing stock: 18.9;
Nonseasonal vacant units' share of housing stock: 12.6.
State: Vermont;
Year: 2010;
Housing units: 322,539;
Total vacancies: 66,097;
For rent or sale: 5,635;
For sale only: 3,598;
Rented or sold, not occupied: 1,212;
For seasonal, recreational, or occasional use: 50,198;
For migrant workers: 39;
Other vacant: 5,415;
Total nonseasonal vacant units: 15,860;
Vacant units' share of housing stock: 20.5;
Nonseasonal vacant units' share of housing stock: 4.9.
Year: 2000;
Housing units: 294,382;
Total vacancies: 53,748;
For rent or sale: 3,084;
For sale only: 2,393;
Rented or sold, not occupied: 1,381;
For seasonal, recreational, or occasional use: 43,060;
For migrant workers: 46;
Other vacant: 3,784;
Total nonseasonal vacant units: 10,642;
Vacant units' share of housing stock: 18.3;
Nonseasonal vacant units' share of housing stock: 3.6.
Percent change:
Year: 2000-2010;
Housing units: 9.6%;
Total vacancies: 23.0;
For rent or sale: 82.7;
For sale only: 50.4;
Rented or sold, not occupied: -12.2;
For seasonal, recreational, or occasional use: 16.6;
For migrant workers: -15.2;
Other vacant: 43.1;
Total nonseasonal vacant units: 49.0;
Vacant units' share of housing stock: 12.2;
Nonseasonal vacant units' share of housing stock: 36.0.
State: Virginia;
Year: 2010;
Housing units: 3,364,939;
Total vacancies: 308,881;
For rent or sale: 82,493;
For sale only: 44,881;
Rented or sold, not occupied: 14,978;
For seasonal, recreational, or occasional use: 80,468;
For migrant workers: 608;
Other vacant: 85,453;
Total nonseasonal vacant units: 227,805;
Vacant units' share of housing stock: 9.2;
Nonseasonal vacant units' share of housing stock: 6.8.
Year: 2000;
Housing units: 2,904,192;
Total vacancies: 205,019;
For rent or sale: 47,563;
For sale only: 27,407;
Rented or sold, not occupied: 16,254;
For seasonal, recreational, or occasional use: 54,696;
For migrant workers: 652;
Other vacant: 58,447;
Total nonseasonal vacant units: 149,671;
Vacant units' share of housing stock: 7.1;
Nonseasonal vacant units' share of housing stock: 5.2.
Percent change:
Year: 2000-2010;
Housing units: 15.9%;
Total vacancies: 50.7;
For rent or sale: 73.4;
For sale only: 63.8;
Rented or sold, not occupied: -7.9;
For seasonal, recreational, or occasional use: 47.1;
For migrant workers: -6.7;
Other vacant: 46.2;
Total nonseasonal vacant units: 52.2;
Vacant units' share of housing stock: 30.0;
Nonseasonal vacant units' share of housing stock: 31.4.
State: Washington;
Year: 2010;
Housing units: 2,885,677;
Total vacancies: 265,601;
For rent or sale: 72,112;
For sale only: 41,417;
Rented or sold, not occupied: 12,500;
For seasonal, recreational, or occasional use: 89,907;
For migrant workers: 1,328;
Other vacant: 48,337;
Total nonseasonal vacant units: 174,366;
Vacant units' share of housing stock: 9.2;
Nonseasonal vacant units' share of housing stock: 6.0.
Year: 2000;
Housing units: 2,451,075;
Total vacancies: 179,677;
For rent or sale: 50,887;
For sale only: 27,255;
Rented or sold, not occupied: 11,256;
For seasonal, recreational, or occasional use: 60,355;
For migrant workers: 1,197;
Other vacant: 28,727;
Total nonseasonal vacant units: 118,125;
Vacant units' share of housing stock: 7.3;
Nonseasonal vacant units' share of housing stock: 4.8.
Percent change:
Year: 2000-2010;
Housing units: 17.7%;
Total vacancies: 47.8;
For rent or sale: 41.7;
For sale only: 52.0;
Rented or sold, not occupied: 11.1;
For seasonal, recreational, or occasional use: 49.0;
For migrant workers: 10.9;
Other vacant: 68.3;
Total nonseasonal vacant units: 47.6;
Vacant units' share of housing stock: 25.6;
Nonseasonal vacant units' share of housing stock: 25.4.
State: West Virginia;
Year: 2010;
Housing units: 881,917;
Total vacancies: 118,086;
For rent or sale: 19,521;
For sale only: 10,381;
Rented or sold, not occupied: 5,963;
For seasonal, recreational, or occasional use: 38,283;
For migrant workers: 118;
Other vacant: 43,820;
Total nonseasonal vacant units: 79,685;
Vacant units' share of housing stock: 13.4;
Nonseasonal vacant units' share of housing stock: 9.0.
Year: 2000;
Housing units: 844,623;
Total vacancies: 108,142;
For rent or sale: 18,286;
For sale only: 12,243;
Rented or sold, not occupied: 7,954;
For seasonal, recreational, or occasional use: 32,757;
For migrant workers: 61;
Other vacant: 36,841;
Total nonseasonal vacant units: 75,324;
Vacant units' share of housing stock: 12.8;
Nonseasonal vacant units' share of housing stock: 8.9.
Percent change:
Year: 2000-2010;
Housing units: 4.4%;
Total vacancies: 9.2;
For rent or sale: 6.8;
For sale only: -15.2;
Rented or sold, not occupied: -25.0;
For seasonal, recreational, or occasional use: 16.9;
For migrant workers: 93.4;
Other vacant: 18.9;
Total nonseasonal vacant units: 5.8;
Vacant units' share of housing stock: 4.6;
Nonseasonal vacant units' share of housing stock: 1.3.
State: Wisconsin;
Year: 2010;
Housing units: 2,624,358;
Total vacancies: 344,590;
For rent or sale: 63,268;
For sale only: 34,219;
Rented or sold, not occupied: 9,436;
For seasonal, recreational, or occasional use: 193,046;
For migrant workers: 249;
Other vacant: 44,372;
Total nonseasonal vacant units: 151,295;
Vacant units' share of housing stock: 13.1;
Nonseasonal vacant units' share of housing stock: 5.8.
Year: 2000;
Housing units: 2,321,144;
Total vacancies: 236,600;
For rent or sale: 38,714;
For sale only: 17,172;
Rented or sold, not occupied: 9,386;
For seasonal, recreational, or occasional use: 142,313;
For migrant workers: 205;
Other vacant: 28,810;
Total nonseasonal vacant units: 94,082;
Vacant units' share of housing stock: 10.2;
Nonseasonal vacant units' share of housing stock: 4.1.
Percent change:
Year: 2000-2010;
Housing units: 13.1%;
Total vacancies: 45.6;
For rent or sale: 63.4;
For sale only: 99.3;
Rented or sold, not occupied: 0.5;
For seasonal, recreational, or occasional use: 35.6;
For migrant workers: 21.5;
Other vacant: 54.0;
Total nonseasonal vacant units: 60.8;
Vacant units' share of housing stock: 28.8;
Nonseasonal vacant units' share of housing stock: 42.2.
State: Wyoming;
Year: 2010;
Housing units: 261,868;
Total vacancies: 34,989;
For rent or sale: 7,304;
For sale only: 3,376;
Rented or sold, not occupied: 1,239;
For seasonal, recreational, or occasional use: 14,892;
For migrant workers: 322;
Other vacant: 7,856;
Total nonseasonal vacant units: 19,775;
Vacant units' share of housing stock: 13.4;
Nonseasonal vacant units' share of housing stock: 7.6.
Year: 2000;
Housing units: 223,854;
Total vacancies: 30,246;
For rent or sale: 6,214;
For sale only: 2,977;
Rented or sold, not occupied: 1,445;
For seasonal, recreational, or occasional use: 12,389;
For migrant workers: 246;
Other vacant: 6,975;
Total nonseasonal vacant units: 17,611;
Vacant units' share of housing stock: 13.5;
Nonseasonal vacant units' share of housing stock: 7.9.
Percent change:
Year: 2000-2010;
Housing units: 17.0%;
Total vacancies: 15.7;
For rent or sale: 17.5;
For sale only: 13.4;
Rented or sold, not occupied: -14.3;
For seasonal, recreational, or occasional use: 20.2;
For migrant workers: 30.9;
Other vacant: 12.6;
Total nonseasonal vacant units: 12.3;
Vacant units' share of housing stock: -1.1;
Nonseasonal vacant units' share of housing stock: -4.0.
Source: Census 2000 and 2010 data.
[End of table]
Table 6 shows the total number of vacant residential units in 2000 and
2010 according to decennial Census data, as well as the percentage
change between the two censuses. The table also shows the states
ranked by number of residential vacant units in 2010, with Florida at
the top because of the large number of vacant units in that state in
2010.
Table 6: Number of Vacant Residential Units, 2010 Census:
State: United States;
Vacancies 2010: 14,988,438;
Vacancies 2000: 10,424,540;
Percent change 2000-2010: 43.8.
State: Florida;
Vacancies 2010: 1,568,778;
Vacancies 2000: 965,018;
Percent change 2000-2010: 62.6.
State: California;
Vacancies 2010: 1,102,583;
Vacancies 2000: 711,679;
Percent change 2000-2010: 54.9.
State: Texas;
Vacancies 2010: 1,054,503;
Vacancies 2000: 764,221;
Percent change 2000-2010: 38.0.
State: New York;
Vacancies 2010: 790,348;
Vacancies 2000: 622,447;
Percent change 2000-2010: 27.0.
State: Michigan;
Vacancies 2010: 659,725;
Vacancies 2000: 448,618;
Percent change 2000-2010: 47.1.
State: North Carolina;
Vacancies 2010: 582,373;
Vacancies 2000: 391,931;
Percent change 2000-2010: 48.6.
State: Pennsylvania;
Vacancies 2010: 548,411;
Vacancies 2000: 472,747;
Percent change 2000-2010: 16.0.
State: Ohio;
Vacancies 2010: 524,073;
Vacancies 2000: 337,278;
Percent change 2000-2010: 55.4.
State: Georgia;
Vacancies 2010: 503,217;
Vacancies 2000: 275,368;
Percent change 2000-2010: 82.7.
State: Arizona;
Vacancies 2010: 463,536;
Vacancies 2000: 287,862;
Percent change 2000-2010: 61.0.
State: Illinois;
Vacancies 2010: 459,743;
Vacancies 2000: 293,836;
Percent change 2000-2010: 56.5.
State: Wisconsin;
Vacancies 2010: 344,590;
Vacancies 2000: 236,600;
Percent change 2000-2010: 45.6.
State: New Jersey;
Vacancies 2010: 339,202;
Vacancies 2000: 245,630;
Percent change 2000-2010: 38.1.
State: Missouri;
Vacancies 2010: 337,118;
Vacancies 2000: 247,423;
Percent change 2000-2010: 36.3.
State: South Carolina;
Vacancies 2010: 336,502;
Vacancies 2000: 219,816;
Percent change 2000-2010: 53.1.
State: Tennessee;
Vacancies 2010: 318,581;
Vacancies 2000: 206,538;
Percent change 2000-2010: 54.2.
State: Virginia;
Vacancies 2010: 308,881;
Vacancies 2000: 205,019;
Percent change 2000-2010: 50.7.
State: Indiana;
Vacancies 2010: 293,387;
Vacancies 2000: 196,013;
Percent change 2000-2010: 49.7.
State: Alabama;
Vacancies 2010: 288,062;
Vacancies 2000: 226,631;
Percent change 2000-2010: 27.1.
State: Washington;
Vacancies 2010: 265,601;
Vacancies 2000: 179,677;
Percent change 2000-2010: 47.8.
State: Massachusetts;
Vacancies 2010: 261,179;
Vacancies 2000: 178,409;
Percent change 2000-2010: 46.4.
State: Minnesota;
Vacancies 2010: 259,974;
Vacancies 2000: 170,819;
Percent change 2000-2010: 52.2.
State: Colorado;
Vacancies 2010: 240,030;
Vacancies 2000: 149,799;
Percent change 2000-2010: 60.2.
State: Louisiana;
Vacancies 2010: 236,621;
Vacancies 2000: 191,128;
Percent change 2000-2010: 23.8.
State: Maryland;
Vacancies 2010: 222,403;
Vacancies 2000: 164,424;
Percent change 2000-2010: 35.3.
State: Kentucky;
Vacancies 2010: 207,199;
Vacancies 2000: 160,280;
Percent change 2000-2010: 29.3.
State: Oklahoma;
Vacancies 2010: 203,928;
Vacancies 2000: 172,107;
Percent change 2000-2010: 18.5.
State: Arkansas;
Vacancies 2010: 169,215;
Vacancies 2000: 130,347;
Percent change 2000-2010: 29.8.
State: Nevada;
Vacancies 2010: 167,564;
Vacancies 2000: 76,292;
Percent change 2000-2010: 119.6.
State: Maine;
Vacancies 2010: 164,611;
Vacancies 2000: 133,701;
Percent change 2000-2010: 23.1.
State: Mississippi;
Vacancies 2010: 158,951;
Vacancies 2000: 115,519;
Percent change 2000-2010: 37.6.
State: Oregon;
Vacancies 2010: 156,624;
Vacancies 2000: 118,986;
Percent change 2000-2010: 31.6.
State: Kansas;
Vacancies 2010: 121,119;
Vacancies 2000: 93,309;
Percent change 2000-2010: 29.8.
State: West Virginia;
Vacancies 2010: 118,086;
Vacancies 2000: 108,142;
Percent change 2000-2010: 9.2.
State: Connecticut;
Vacancies 2010: 116,804;
Vacancies 2000: 84,305;
Percent change 2000-2010: 38.5.
State: Iowa;
Vacancies 2010: 114,841;
Vacancies 2000: 83,235;
Percent change 2000-2010: 38.0.
State: New Mexico;
Vacancies 2010: 109,993;
Vacancies 2000: 102,608;
Percent change 2000-2010: 7.2.
State: Utah;
Vacancies 2010: 102,017;
Vacancies 2000: 67,313;
Percent change 2000-2010: 51.6.
State: New Hampshire;
Vacancies 2010: 95,781;
Vacancies 2000: 72,418;
Percent change 2000-2010: 32.3.
State: Idaho;
Vacancies 2010: 88,388;
Vacancies 2000: 58,179;
Percent change 2000-2010: 51.9.
State: Nebraska;
Vacancies 2010: 75,663;
Vacancies 2000: 56,484;
Percent change 2000-2010: 34.0.
State: Montana;
Vacancies 2010: 73,218;
Vacancies 2000: 53,966;
Percent change 2000-2010: 35.7.
State: Vermont;
Vacancies 2010: 66,097;
Vacancies 2000: 53,748;
Percent change 2000-2010: 23.0.
State: Hawaii;
Vacancies 2010: 64,170;
Vacancies 2000: 57,302;
Percent change 2000-2010: 12.0.
State: Delaware;
Vacancies 2010: 63,588;
Vacancies 2000: 44,336;
Percent change 2000-2010: 43.4.
State: Rhode Island;
Vacancies 2010: 49,788;
Vacancies 2000: 31,413;
Percent change 2000-2010: 58.5.
State: Alaska;
Vacancies 2010: 48,909;
Vacancies 2000: 39,378;
Percent change 2000-2010: 24.2.
State: South Dakota;
Vacancies 2010: 41,156;
Vacancies 2000: 32,963;
Percent change 2000-2010: 24.9.
State: North Dakota;
Vacancies 2010: 36,306;
Vacancies 2000: 32,525;
Percent change 2000-2010: 11.6.
State: Wyoming;
Vacancies 2010: 34,989;
Vacancies 2000: 30,246;
Percent change 2000-2010: 15.7.
State: District of Columbia;
Vacancies 2010: 30,012;
Vacancies 2000: 26,507;
Percent change 2000-2010: 13.2.
Sources: Census 2000 and 2010 data.
[End of table]
[End of section]
Appendix III: Comments from the Department of the Treasury:
Department of the Treasury:
Assistant Secretary:
Washington, DC 20220:
October 31, 2011:
Matt Scirè:
Director:
Financial Markets and Community Investment:
U.S. Government Accountability Office:
441 G Street, NW:
Washington, DC 20548:
Dear Mr. Scirè:
The Department of the Treasury ("Treasury") appreciates the
opportunity to review and comment on your draft report titled, Vacant
Properties, Growing Number Increases Communities' Costs and Challenges
("Draft Report").
The Draft Report is informative and helpful in describing the extent
of vacant properties and the impact of these properties on state and
local economies, including the costs to local governments, such as for
police and fire services. One of the strategies proposed in the Draft
Report is to require servicers to include these costs in their
decision-making model when deciding whether to modify a loan or
foreclose on it. As noted in the Draft Report, there are certain
challenges associated with holding servicers accountable for such
costs. We agree that as we continue to develop appropriate responses
and policies to deal with the housing crisis, these are important
questions that need to be analyzed by federal, state and local
agencies, as well as by community groups and investors and servicers
in the mortgage industry.
Treasury appreciates your attention to this important matter.
Sincerely,
Signed by:
Timothy G. Massad:
Assistant Secretary for Financial Stability:
[End of section]
Appendix IV: GAO Contact and Staff Acknowledgments:
GAO Contact:
Mathew J. Scirè, (202) 512-8678, or sciremj@gao.gov:
Staff Acknowledgments:
In addition to the individual named above, Cody Goebel, Assistant
Director; Rachel DeMarcus; Catherine Gelb; Kristeen McLain; Marc
Molino; Jill Naamane; Linda Rego; Jennifer Schwartz; Andrew Stavisky;
Cynthia S. Taylor; Jeff Tessin; James Vitarello; and Monique Williams
made key contributions to this report.
[End of section]
Footnotes:
[1] In this report, we generally refer to vacant properties as
properties with unoccupied structures on them.
[2] The Troubled Asset Relief Program was authorized by the Emergency
Economic Stabilization Act of 2008. Pub. L. No. 110-343, 122 Stat.
3765 (2008), codified at 12 U.S.C. §§ 5201 et seq.
[3] The first phase of this program, NSP 1, was authorized by the
Housing and Economic Recovery Act of 2008, Pub. L. No. 110-289, 122
Stat. 2654 (2008), which provided $3.92 billion in grant funds. The
American Recovery and Reinvestment Act of 2009, Pub. L. No. 111-5, 123
Stat. 115 (2009) provided an additional $2 billion in NSP funds
(referred to as NSP 2) and changed several aspects of the program.
Later, the Wall Street Reform and Consumer Protection Act, Pub. L. No.
111-203, 124 Stat. 1376 (2010) (Dodd-Frank Act), provided an
additional $1 billion in funding for the program (referred to as NSP
3).
[4] A "holder" "is a person who has legal possession of a negotiable
instrument and is entitled to receive payment on it." Black's Law
Dictionary (9th ed., 2009).
[5] Fannie Mae and Freddie Mac share a primary mission that has been
to stabilize and assist the U.S. secondary mortgage market and
facilitate the flow of mortgage credit. To accomplish this goal, the
enterprises issue debt and stock and use the proceeds to purchase
conventional mortgages that meet their underwriting standards, known
as conforming mortgages, from primary mortgage lenders such as banks
or thrifts. The enterprises hold some of the mortgages that they
purchase in their portfolios. However, most of the mortgages are
packaged into mortgage-backed securities, which are sold to investors
in the secondary mortgage market. In September 2008, FHFA placed
Fannie Mae and Freddie Mac into conservatorship out of concern that
their deteriorating financial condition threatened the stability of
financial markets.
[6] The FHA single-family mortgage insurance program insures private
lenders against losses from borrower defaults on mortgages that meet
FHA criteria. To support the program, FHA imposes up-front and annual
mortgage insurance premiums on home buyers. Similarly, the Department
of Veterans Affairs guaranty program allows mortgage lenders to extend
loans to eligible veterans on favorable terms and provides lenders
with substantial financial protections against the losses associated
with extending such mortgages.
[7] A short sale is a foreclosure alternative where the lender agrees
to accept proceeds from the sale of the home to a third party even
though the sales prices is less than the principal and accrued
interest and other expenses owed.
[8] According to a GSE representative, if a property is still occupied
after the foreclosure sale and any redemption period are complete,
servicers or entities working on behalf of the GSEs may assess the
occupant for a rental program while the property is being marketed for
sale or offer relocation assistance payments for the occupant's
voluntary cooperation in vacating the property.
[9] 12 U.S.C. § 1813(q).
[10] "Federal consumer financial law" is a defined term in the Dodd-
Frank Act that includes over a dozen existing federal consumer
protection laws, including the Truth in Lending Act, the Real Estate
Settlement Procedures Act, and the Equal Credit Opportunity Act, as
well as title X of the Dodd-Frank Act itself. 12 U.S.C. § 5481(12),
(14).
[11] Other federal data collection efforts that include vacant
property data are the Census/HUD American Housing Survey and the
Current Population Survey/Housing Vacancy Survey, but these surveys
did not collect the data at the geographic level or at the sample size
needed for our study.
[12] See GAO, 2010 Census: Data Collection Operations Were Generally
Completed as Planned, but Long-standing Challenges Suggest Need for
Fundamental Reforms, [hyperlink,
http://www.gao.gov/products/GAO-11-193] (Washington, D.C.: Dec. 14,
2010).
[13] Various entities define the term "vacant" differently. For
example, the decennial census defines a vacant housing unit as one in
which no one is living on Census Day. The USPS defines a vacant
address as an unoccupied address where mail has not been deliverable
for 90 days or longer. One nongovernmental organization defined a
vacant property as a site that poses a threat to public safety or one
that owners neglect. Baltimore city's building code defines "vacant"
as "an unoccupied structure that is unsafe or unfit for human
habitation or other authorized use." (Building, Fire, and Related
Codes of Baltimore City, Part II, §116.4.1, 2011, as last amended by
Ord. 11-419).
[14] Census 2010 and USPS data also do not distinguish between single-
family and multifamily residential units.
[15] Census officials also stated that some properties, which the
enumerators determined were "uninhabitable," were deleted from the
Census data on the national housing stock and were not counted as
housing units. As a result, they were not categorized as either
occupied or vacant. These properties generally were those that were
severely deteriorated and were unlikely ever to be reoccupied,
according to Census officials.
[16] Our estimates of nonseasonal vacant units exclude vacant
properties for seasonal use or for use by migrant workers because
these are occupied for temporary periods of time, and we concluded
that such properties are likely to be maintained. The total number of
vacant properties in the United States, including all vacant
properties identified in the Census data, increased 44 percent between
2000 and 2010, from 10 million to almost 15 million. See appendix II
for more details about the Census data.
[17] We compared the estimates from the 2010 Census data with USPS
data on counts of vacant addresses by state for the second quarter of
2010. We found that 9 of the 10 states with the largest number of
vacant addresses according to the USPS data were also among the 10
states with the largest number of nonseasonal vacant housing units in
the 2010 Census data. Various reasons may explain why the USPS and
Census data differ somewhat, including that the Census data includes
short-term vacant properties that are for rent or for sale, while the
USPS data includes only addresses where mail has not been deliverable
for 90 days or longer.
[18] Census vacancy data are also available at the level of individual
street blocks.
[19] As an additional way to assess the level of economic distress in
localities, we analyzed ACS data for the 9 cities we studied for the
period 2005 through 2009 (2010 poverty data were not yet available at
the time we undertook this analysis) to identify the percentage of
households in a given census tract with annual incomes below the
appropriate poverty threshold for that household size and composition
as defined by the Census Bureau.
[20] GAO, Mortgage Foreclosures: Additional Mortgage Servicer Actions
Could Help Reduce the Frequency and Impact of Abandoned Foreclosures,
GAO-11-93 (Washington, D.C.: Nov. 15, 2010).
[21] This estimate was developed by a local housing research
organization using data from the city's database.
[22] To calculate its estimate of vacant, abandoned properties, the
department used information including code enforcement orders for
boarding up of vacant properties, relevant police and arson reports,
undelivered mail, and property and tax information from the county
land records.
[23] [hyperlink, http://www.gao.gov/products/GAO-11-93].
[24] Woodstock Institute, Left Behind: Troubled Foreclosed Properties
and Servicer Accountability in Chicago (Chicago, IL, January 2011).
[25] According to HUD, as of July 2008, 25 states used a nonjudicial
process as their normal method of foreclosure, 19 states use judicial,
and 6 states use both. See GAO-11-93 for more information about these
different processes.
[26] The Post-Foreclosure Experience of U.S. Households. Raven Molloy
and Hui Shan. Federal Reserve Board, Washington, D.C. May 2011.
[27] James H. Carr and Michelle Mulcahey, Rebuilding Communities in
Economic Distress: Local strategies to Sustain Homeownership, Reclaim
Vacant Properties, and Promote Community-Based Employment. National
Community Reinvestment Coalition (Washington, D.C.: October 2010).
[28] [hyperlink, http://www.gao.gov/products/GAO-11-433].
[29] Stephan Whitaker, Economic Commentary: Foreclosure-Related
Vacancy Rates. Federal Reserve Bank of Cleveland, July 26, 2011.
[30] CoreLogic, U.S. Housing and Mortgage Trends (February 2011).
[31] As we have previously reported, house price appreciation or
depreciation in a geographic area is commonly measured by changes in a
house price index. See GAO, Loan Performance and Negative Home Equity
in the Nonprime Mortgage Market, GAO-10-146R (Washington, D.C.: Dec.
16, 2009).
[32] The two indexes are the FHFA and S&P/Case-Shiller indexes. The
FHFA index, which consists of separate indexes for 384 metropolitan
areas, is based on sales and appraisal data for properties with
mortgages purchased or securitized by Fannie Mae or Freddie Mac
(conforming mortgages). To be eligible for purchase by these entities,
loans (and borrowers receiving the loans) must meet specified
requirements. The S&P/Case-Shiller national index, which is a
composite of separate indexes for the nine regional Census divisions,
is based on sales data for homes purchased with both conforming and
nonconforming mortgages.
[33] Maureen F. Maitland and David M. Blitzer. S&P/Case-Shiller Home
Price Indices 2010, A Year In Review. January 2011.
[34] Joint Center for Housing Studies, State of the Nation's Housing,
2011. Harvard University.
[35] The International Code Council is an association to help the
building safety community and construction industry provide safe,
sustainable and affordable construction through the development of
codes and standards used in the design, build and compliance process.
According to the International Code Council, 50 states and the
District of Columbia have adopted these codes at the state or
jurisdictional level.
[36] Local homeowners' associations also may have their own
maintenance standards that property owners must follow and the
associations or surrounding residents within a neighborhood sometimes
expend resources on maintenance activities such as mowing lawns or
removing trash when properties are left unattended.
[37] Securitization trusts have another entity that acts as trustee.
Trustees keep records and receive mortgage payments from servicers and
disperse them among investors according to the terms of the pooling
and servicing agreement. In addition, trustees are the legal owners of
record of the mortgage loans on behalf of the trust. Mortgage
servicers administer the loans underlying mortgage-backed securities
under contractual agreements with the securitization trustee, which
acts on behalf of the owners of the securitization trust's securities.
Any legal action a servicer takes on behalf of the trust, such as
foreclosure, generally may be brought in the name of the trustee.
[38] Certain loans may be required to have private mortgage insurance,
which covers a lender for certain losses related to the potential
default of the loan. Insurance claims from private mortgage insurers
may also include reimbursement to servicers for property maintenance
expenses.
[39] According to HUD preservation and protection guidelines, at the
time of conveyance to HUD, a property must be undamaged by fire,
flood, earthquake, hurricane, tornado, or mortgagee neglect, as set
forth in and required by 24 C.F.R. §203.378. For condominiums that
were secured by mortgages insured under §234 of the National Housing
Act, the property must also be undamaged by boiler explosion, as
required by 24 C.F.R. § 234.270. In addition, the property must be
secured, the lawn maintained, winterized (as applicable), and interior
and exterior debris must be removed with the property's interior
maintained in broom-swept condition. This includes the removal of any
vehicles and removal of any personal property in accordance with local
and state requirements.
[40] The data from FHA did not specify categories of expenses during
the foreclosure period.
[41] These figures may include costs for both vacant and occupied
properties. GSE representatives told us that between 50 percent and 60
percent of properties are vacant at the start of the postforeclosure
sale period, but by the end of the period all properties are vacant or
an REO purchaser has agree to purchase the property while it is
occupied.
[42] According to one industry participant's study, pooling and
servicing agreements typically direct servicers to manage and dispose
of REO properties according to any specific contractual requirements
in the agreement, generally accepted servicing practices, and the
requirements of local laws and regulations. Stergios Theologides,
Servicing REO Properties: The Servicer's Role and Incentives, REO &
Vacant Properties, Strategies for Neighborhood Stabilization, a joint
publication of the Federal Reserve Banks of Boston and Cleveland and
the Federal Reserve Board (Sept. 1, 2010).
[43] For example, according to staff from a property maintenance
company, certain states may require servicers to obtain a court order
before accessing a property in foreclosure or during the redemption
period or they would be subject to trespassing.
[44] Representatives of one large servicer told us that as of July
2011, the company changed its policy to continue maintaining such
properties in the interest of neighborhood stabilization.
[45] See GAO-11-93. We noted in this report that the vast majority of
abandoned foreclosures were loans that involved third-party investors
and private label mortgage-backed securities. GSE-purchased loans
account for a very small portion of our estimated number of abandoned
foreclosures. Similarly, we found only about 0.3 percent of abandoned
foreclosures were associated with FHA, VA, or Ginnie Mae insured loans.
[46] Woodstock Institute, Left Behind.
[47] [hyperlink, http://www.gao.gov/products/GAO-11-93].
[48] [hyperlink, http://www.gao.gov/products/GAO-11-93].
[49] See, for example, William C. Apgar, Mark Duda, and Rochelle
Nawrocki Gorey, The Municipal Cost of Foreclosures: A Chicago Case
Study, Housing Finance Policy Research Paper 2005-1, Homeownership
Preservation Foundation (Minneapolis, Minn.: 2005); Christiana
McFarland, Casey Dawkins, and C. Theodore (Ted) Koebel, "Local Housing
Conditions and Contexts: A Framework for Policy Making" (Washington:
National League of Cities, 2007); and Dan Immergluck and Geoff Smith,
"The Impact of Single-family Mortgage Foreclosures on Neighborhood
Crime," Housing Studies 21, no. 6 (2006): 851-866.
[50] [hyperlink, http://www.gao.gov/products/GAO-11-93].
[51] See, for example, Brian A. Mikelbank, "Spatial Analysis of the
Impact of Vacant, Abandoned and Foreclosed Properties," study
conducted for the Office of Community Affairs, Federal Reserve Bank of
Cleveland, 2008; and Kai-yan Lee, "Foreclosure's Price-Depressing
Spillover Effects on Local Properties: A Literature Review," Community
Affairs Discussion Paper, Federal Reserve Bank of Boston (Boston:
2008). Each of the studies we reviewed focused on specific geographic
locations, so their results cannot be generalized to the state level
or the country as a whole. The studies also each also use data from
different time periods and use different approaches.
[52] Kai-yan Lee.
[53] William C. Apgar, Mark Duda, and Rochelle Nawrocki Gorey.
[54] Stephan Whitaker and Thomas J. Fitzpatrick IV. The Impact of
Vacant, Tax-Delinquent, and Foreclosed Property on Sales Prices of
Neighboring Homes. Federal Reserve Bank of Cleveland, September 2011.
[55] Brian A. Mikelbank. This study looked at the impact on sales
price separating the effect of foreclosed properties and
vacant/abandoned properties, and also accounting for neighborhood
characteristics that could otherwise have distorted the results. The
study also noted that the vacant properties were located close to the
center of Columbus, Ohio, whereas the foreclosed properties were
distributed more widely across the city.
[56] Nigel G. Griswold and Patricia E. Norris, Economic Impacts of
Residential Property Abandonment and the Genesee County Land Bank in
Flint, Michigan. Report #2007-05, MSU Land Policy Institute, (Lansing,
MI: April 2007).
[57] Christopher W. Hoene and Michael A. Pagano, Research Brief on
America's Cities, September 2011. National League of Cities. The
National League of Cities works in a partnership with 49 state
municipal leagues and serves as a resource to and an advocate for the
more than 19,000 cities, villages, and towns it represents.
[58] The report notes that a downturn in real estate prices may not be
noticed for one to several years after an economic downturn began
because property tax assessment cycles vary across jurisdictions: some
reassess property annually, while others reassess every few years.
[59] See Frank Alexander, "Tax Liens, Tax Sales, and Due Process," 75
Ind. L. J. 747 (2000). Vacant, abandoned properties with unpaid taxes
may go through the jurisdiction's tax foreclosure processes. These
processes generally take the form of either property auctions or sales
of the outstanding tax liens to private entities. The purchasers of
tax liens may not pay property taxes in subsequent years or adequately
maintain the property.
[60] [hyperlink, http://www.gao.gov/products/GAO-11-93].
[61] [hyperlink, http://www.gao.gov/products/GAO-11-93].
[62] Officials in the city of Tucson stated that their revenues depend
largely on sales taxes, though sales tax revenue has also declined as
a result of the recent poor economic conditions.
[63] Community Research Partners, $60 Million and Counting: The cost
of vacant and abandoned properties to eight Ohio cities (Columbus, OH:
Feb. 2008). The study reviewed the magnitude and cost of vacant and
abandoned properties in eight Ohio cities--Cleveland, Columbus,
Dayton, Ironton, Lima, Springfield, Toledo, and Zanesville--and found
$49 million in cumulative lost property tax revenues to these local
governments and school districts.
[64] [hyperlink, http://www.gao.gov/products/GAO-10-146R].
[65] While not a focus of this report, most of these localities are
also engaged in foreclosure mitigation and prevention strategies.
[66] Enterprise Community Partners, Inc., Market Data-Driven
Stabilization: A Case Study of Cleveland's NEO CANDO Data System
(Washington, D.C.: 2010).
[67] The Trust is a national nonprofit organization formed in 2008 by
four national organizations in the housing and community development
field--Enterprise Community Partners, Housing Partnership Network,
Local Initiatives Support Corporation, and NeighborWorks America.
These four founding organizations were soon joined by the National
Urban League and the National Council of La Raza as prominent sponsors
of the Trust.
[68] Daniel Fleischman, Nonprofit Strategies for Returning REO
Properties to Effective Use, REO & Vacant Properties, Strategies for
Neighborhood Stabilization, a joint publication of the Federal Reserve
Banks of Boston and Cleveland and the Federal Reserve Board (Sept. 1,
2010).
[69] In a recent speech, Elizabeth Duke, Member of the Board of
Governors of the Federal Reserve System noted that, in some cases,
properties are too damaged, or otherwise too low-value, to be sold as
owner-occupied units or profitably converted to rental properties. She
said that the Federal Reserve estimates about 5 percent of properties
in the REO inventory of FHA and the GSEs are valued at less than
$20,000. See Federal Reserve Board Policy Forum: The Housing Market
Going Forward, Lessons Learned from the Recent Crisis (Washington,
D.C.: Sept. 1, 2011).
[70] Specifically, the study estimated that property values increased
between $117 and $50,000 per property. Nigel G. Griswold and Patricia
E. Norris.
[71] Stephan Whitaker and Thomas J. Fitzpatrick IV.
[72] The specific order in which liens must be paid in the event of
foreclosure or sale varies depending on the jurisdiction.
[73] GAO-11-93.
[74] Chicago, Ill, Municipal Code § 13-12-125, 135.
[75] See N.J. Stat. Ann. § 46:10B-51 (2010). The New Jersey
requirements were included in the Mortgage Stabilization and Relief
Act, 2008 N.J. Sess. Law Serv. Ch. 127 (West) and amended by the New
Jersey Foreclosure Fairness Act, 2009 N.J. Sess. Law Serv. Ch. 296
(West). See N.Y. Real Prop. Law § 1307 (2010). The New York
requirements were effective April 14, 2010.
[76] Colo. Rev. Stat. § 38-38-901, et seq., which was effective as of
August 1, 2010, authorizes an expedited foreclosure sale procedure if
the mortgagee can document that the property is abandoned (vacant). A
signed affidavit that is based upon the personal knowledge of the
noteholder, their agent, the sheriff of the county in which the
property is located, or a building inspector, or other municipal or
county official having jurisdiction over the property is prima facie
evidence of abandonment. The affidavit should state that the property
is not actually occupied and that the signer has inspected the
property more than once and each time determined that the property is
abandoned and that at least two of the following facts exist: (1)
windows or entrances to the property are boarded up or closed off, or
multiple window panes are broken and unrepaired; (2) doors to the
property are smashed through, broken off, unhinged or continuously
unlocked; (3) gas, electric, and water service to the property have
been terminated for a period of at least 30 days; (4) the police or
sheriff's office has received at least two reports of trespassers on
the property, or of vandalism or other illegal acts being committed on
the property; or (5) the property is deteriorating and is either below
or is in imminent danger of falling below minimum local government
standards for public safety and sanitation. The affidavit must also be
accompanied by photographic or other documentary evidence such as
police reports demonstrating of the cited conditions. The procedure is
not applicable to judicial foreclosures.
[77] The judge we spoke with in Chicago told us that the city
established the housing court under its home rule authority granted to
it by the state of Illinois.
[78] The results of the model are not the only factor determining
whether a borrower will receive a loan modification. For example,
borrowers might not be interested in a loan modification, even if
approved.
[79] Bob Winthrop and Rebecca Herr, Determining the Cost of Vacancies
in Baltimore, Government Finance Review (June 2009).
[80] Alan Mallach, REO Properties, Housing Markets, and the Shadow
Inventory, REO and Vacant Properties, Strategies for Neighborhood
Stabilization, a joint publication of the Federal Reserve Banks of
Boston and Cleveland and the Federal Reserve Board (Sept. 1, 2010).
[81] The HAMP decision-making model--called the net present value
(NPV) model--was developed by an interagency working group made up of
officials from FDIC, Fannie Mae, Freddie Mac, FHFA, and Treasury.
Servicers participating in HAMP use this model to decide whether to
modify a loan. Servicers with at least a $40 billion servicing book
may customize the NPV model for use in HAMP, but they must use
standard model inputs for certain variables. Some servicers have also
developed their own models to analyze borrowers' eligibility for their
own proprietary modification programs if they are not eligible for
HAMP. They told us that their proprietary models generally used
similar inputs as the HAMP NPV model.
[82] As outlined in the March 4, 2009, program guidelines, HAMP's
eligibility requirements stipulate that (1) the property must be owner-
occupied and the borrower's primary residence (the program excludes
vacant and investor-owned properties); (2) the property must be a
single-family (1-4 unit) property with a maximum unpaid principal
balance on the unmodified first-lien mortgage that is equal to or less
than $729,750 for a 1-unit property; (3) the loans must have been
originated on or before January 1, 2009; and (4) the first-lien
mortgage payment must be more than 31 percent of the homeowner's gross
monthly income.
[83] A HUD official explained how the agency's technical assistance
has helped local officials analyze their local markets and adjust
their strategies for spending NSP funds on programs that would be most
effective. HUD has recently revised its NSP technical assistance
efforts to better target spending to communities that need it the most
and has developed Web-based resources for all NSP grantees. HUD also
plans to launch a similar strategy for its other grant programs that
is aimed at improving the capacity of local governments, especially in
economically distressed cities.
[84] Pub. L. No. 111-5, 123 Stat. 115 (2009).
[85] GAO, Troubled Asset Relief Program: Treasury Actions Needed to
Make the Home Affordable Modification Program More Transparent and
Accountable, [hyperlink, http://www.gao.gov/products/GAO-09-837]
(Washington, D.C.: July 23, 2009). Treasury has begun implementing
several other programs for struggling homeowners, including the Second-
Lien Modification Program, the Principal Reduction Alternative program
for borrowers who owe more on their mortgages than the value of their
homes, and the Home Affordable Foreclosure Alternatives program for
those who are not successful in HAMP modifications. However, we
reported that Treasury's progress in implementing these programs has
been slow. See Troubled Asset Relief Program: Treasury Continues to
Face Implementation Challenges and Data Weaknesses in Its Making Home
Affordable Program, GAO-11-288 (Washington, D.C.: Mar. 17, 2011). As
of July 2011, Treasury reported that there were 9,221 active Principal
Reduction Alternative permanent modifications. See Making Home
Affordable, Program Performance Report Through July 2011 found at
[hyperlink, http://www.treasury.gov/initiatives/financial-
stability/results/MHA-Reports/Pages/default.aspx].
[86] Section 304 of the Federal Deposit Insurance Corporation
Improvement Act of 1991 requires the federal banking agencies to
prescribe uniform real estate lending standards. 12 U.S.C. § 1828(o).
The standards established by the federal banking regulators require
every depository institution to establish and maintain comprehensive,
written real estate lending policies that are consistent with safe and
sound banking practices and appropriate to the size of the institution
and nature and scope of its operations. The lending policies must
establish loan portfolio diversification standards; prudent
underwriting standards; loan administration procedures for the bank's
real estate portfolio; and documentation, approval, and reporting
requirements to monitor compliance with the bank's real estate lending
policies. OCC (12 C.F.R. Part 34, subpart D), Federal Reserve (12
C.F.R. Part 208, subpart E), FDIC (12 C.F.R. Part 365).
[87] Section 39 of the Federal Deposit Insurance Act (12 U.S.C. 1831p--
1) requires that each bank regulator establish certain safety and
soundness standards by regulation or guideline. For the OCC, these
regulations appear at 12 C.F.R. Part 30; for the Federal Reserve,
these regulations appear at 12 C.F.R. 208.3(d)(1); for FDIC, these
regulations appear at 12 C.F.R. Part 364, Appendix A.
[88] Because mortgage servicers generally manage loans that are
actually owned or held by other entities, they are not exposed to
significant losses if the loans become delinquent. In addition, we
have previously reported that the percentage of loans in foreclosure
was historically very low (less than 1 percent) from 1979 to 2006.
[89] 12 U.S.C. § 29; 12 C.F.R. § 34.82(a). According to regulatory
officials, various state laws that apply to certain institutions may
have longer or shorter limits on holding REO properties.
[90] Beginning in September 2010, several servicers announced that
they were halting or reviewing their foreclosure proceedings
throughout the country after allegations that the documents
accompanying judicial foreclosures may have been inappropriately
signed or notarized. For more information about this issue, see GAO,
Mortgage Foreclosures: Documentation Problems Reveal Need for Ongoing
Regulatory Oversight, [hyperlink,
http://www.gao.gov/products/GAO-11-433] (Washington, D.C.: May 2,
2011).
[91] [hyperlink, http://www.gao.gov/products/GAO-11-433].
[92] According to a GSE representative, the GSEs are required to
establish appropriate incentives to encourage and support servicer
contact with borrowers in the early stages of delinquency, consistent
timelines and requirements for communications with borrowers,
incentive structures for early engagement, and updated foreclosure
process timelines. The representative also noted that the work will
include consideration of appropriate penalties to encourage efficient
resolution and liquidation of properties in cases where foreclosure is
necessary.
[93] For example, analysts at Credit Suisse estimate that reducing
Fannie Mae's and Freddie Mac's foreclosed-property sales to around
30,000 each month, from the current rate of 50,000, would cut total
distressed sales and avoid a further 3 percent to 5 percent decline in
home prices. In addition, according to an analyst with Zelman &
Associates, an industry research and analysis firm, the number of
single-family rental households has increased nationwide in the last
several years, especially in markets hard-hit by foreclosures.
[94] GAO, Troubled Asset Relief Program: Home Affordable Modification
Program Continues to Face Implementation Challenges, [hyperlink,
http://www.gao.gov/products/GAO-10-556T] (Washington, D.C.: Mar. 25,
2010). We also have ongoing work reviewing Treasury's recent steps
regarding assessing servicers' program performance.
[95] [hyperlink, http://www.gao.gov/products/GAO-10-556T].
[96] [hyperlink, http://www.gao.gov/products/GAO-11-93] and
[hyperlink, http://www.gao.gov/products/GAO-11-193.
[97] [hyperlink, http://www.gao.gov/products/GAO-11-433].
[98] The Census American Community Survey (ACS) is a survey of 3
million households that takes place throughout the year that includes
information on residential housing vacancies and poverty, among other
data. The ACS data are reported on an annual basis and are also
aggregated into 3-year and 5-year datasets.
[End of section]
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