After more than a year of advocacy by the Center on Policy Initiatives (CPI) and community allies, San Diego has a new ordinance requiring banks to register all foreclosures and be held accountable if they neglect the properties. On Tuesday, Dec. 18, new Mayor Bob Filner made the Property Value Protection Ordinance the first ordinance he signed into law.
At the signing, across the street from a previously blighted foreclosed home, CPI Executive Director Clare Crawford said the ordinance provides "the tools we need to protect our neighborhoods from the costs and hazards of foreclosure blight."
Banks will have to pay a $76 fee to register with the city every time they issue a notice of default. The registry will eliminate long delays in identifying the owners of blighted properties, and the fee revenue will be used to hire additional code enforcement staff. Banks can be fined if they don't properly maintain the properties they have taken over.
A study in 2011 by CPI and the Alliance of Californians for Community Empowerment (ACCE) documented hundreds of millions of dollars in costs to the city and neighboring homeowners caused by banks neglecting foreclosed homes. Besides dragging down neighboring property values, each blighted foreclosure costs local governments between $5,000 and $34,000 for maintenance, inspections, and police and fire calls.
The study kicked off the Stop Bank Blight campaign that led to passage of the ordinance by a divided City Council in November. A poll commissioned by CPI found that 70% of San Diegans supported fining banks for leaving foreclosures neglected and blighted, and only 14% opposed the idea. Hundreds of community residents attended public hearings and events supporting the measure.
CPI sees the new registry as one important step in holding banks accountable for the consequences of the foreclosure crisis.