Vacant foreclosures annoy, but Utah cities face limitations

The bungalow with peeling red paint in the Liberty Park area of Salt Lake City has all the classic signs of foreclosure. It's vacant, the lawn is dead and no one has bothered to fix a busted window.

Gary Rigler, housing and zoning officer for Salt Lake City, walks around the home's weedy yard. Several weeks ago, he had a broken window boarded up. Today, he's making sure it's still secure and that a homeless person or family hasn't figured out a way to move in. Satisfied everything is in order, he gets in his car and drives on to the next empty home he's inspecting that day.

Rigler and his counterparts in cities along the Wasatch Front have been busy lately as the number of distressed properties has grown. When homes

become vacant, neighbors call with concerns or anger over unkempt yards, broken windows and doors and other issues, even though municipalities are limited in what they can do because of private property rights.

Vacant homes can become havens for drug sales and other crimes. Health and sanitation is another issue when homeless people move in to properties where utilities have been disconnected. And as the weather cools, there is yet another worry -- fires started by intruders trying to keep warm in vacant homes.

"They want to find a place to get out of the cold," Rigler says at another home near 300 East and 800 South. Several windows and even two doors have needed boarding up in recent months to keep out those doggedly

determined to take up residence.

Although Rigler's first two stops are in two of Salt Lake City's more modest neighborhoods, he's quick to point out that the vacant house problem is evident in every area and every price range. "It's not a west side problem, it's not an east side problem -- it's a problem all over."

To prove his point, he drives over to a home just a short walk from the Salt Lake Country Club near Sugar House. The assessed value of the property he stops at is nearly $650,000.

But it has all the signs of a distressed property or a foreclosure -- it's empty and much of the landscaping on this nearly two-thirds of an acre lot is dead or overgrown. It's added to Rigler's list. He or another housing and zoning officer will be back to make sure that the property remains secure.

Beyond being an annoyance or a hazard, foreclosed homes can undermine revitalization efforts. In the Rose Park area, Ron Jarrett, chair of the community council, has watched a well-cared for home become a mess after the occupants disappeared abruptly this past summer. Since then, the lawn has died and the fruit trees are struggling. "And it's on a corner where everybody can see it," he said.

Virtually nonexistent during the boom years of Utah's housing market, vacant homes started popping up in greater numbers after the boom abruptly ended in summer 2007.

This August, tracking firm RealtyTrac said the state had 3,277 foreclosure-related filings, which translates into one in 282 homes. Filings -- everything from default notices to bank auction notices -- are double last year's levels and put Utah at No. 7 in the nation.

Though another reporting group, the Mortgage Bankers Association of America, in its last report showed that 28 other states have a higher of actual foreclosures (not just filings), the trend is the same. Utah's share of delinquent loans and foreclosures is growing, and that means more vacant properties are coming online.

Rigler says the city is limited in what it can do to combat the problem. Many times, if a home is owner-occupied, families pack up and move in the middle of the night after falling behind on their mortgage payments and can't easily be found.

In other cases, the homeowner is long gone, the tenants have moved out and the bank has taken possession in foreclosure. It can be extremely difficult, or in many cases impossible, to identify the proper person within a bank responsible for seeing that foreclosed properties comply with city codes.

So the city ends up hiring a contractor to secure a property, and to make sure it's compensated, a property tax lien is placed on the property. Liens can total hundreds of dollars, or if the home remains vacant long enough, thousands of dollars.

"We do all we can," Rigler says. "Neighbors have called us and demanded that we tear a house down -- but we can't just tear someone's house down."

Polly Hart, who lives in the Capitol Hill area, says one of the major sources of frustration in her neighborhood is seeing boarded up windows on vacant homes. She understands the need to secure properties in a cost-effective way, but "what neighbor wants a boarded-up home next to them? That invites squatters -- it's saying, 'Hello, no one is here.' "

Rigler said the boards are the only viable alternative because a window can be easily broken again.

Many of today's vacant homes tell a story of a housing boom along the Wasatch Front that came to an end so quickly, many people left financially devastated almost overnight.

There are the properties that were bought at the height of the market, some with adjustable-rate loans or exotic mortgages. They are properties that were destined to be "flipped" by investors for great profit after some amount of renovation. But when the market turned, there were few buyers willing to pay an amount that would cover those investments.

High in the Avenues on an upscale street, Rigler stops at an older home that has been gutted, . Walk around to the back of the property and it's easy to see why someone had decided it was worth starting a major renovation. There's a magnificent view of City Creek Canyon.

But the home was purchased near the height of the market by a couple who have since gone their separate ways, and now it's a neighborhood nightmare.

Back in central Salt Lake City, Rigler stops in an area some call 'Sugar Hood.' There are three empty homes in a row that Rigler and his team are tracking.

The first home's lawn is weedy, but at least it's green. Ditto for the house next door, and the house next door to that one. But if you walk around back, you'll see why the city is concerned. The detached garages of all three properties and some windows and one door have been broken into.

Local real estate agents say the properties were purchased by a single investor in 2006. All three are foreclosures by Taylor, Bean & Whitaker Mortgage Corp., a large national lender that filed for bankruptcy in recent weeks after a crackdown by regulators made it nearly impossible for the company to continue to make new loans.

Real estate agent Luann Lakis has a home listed for sale directly east of the three properties at $169,900. No listing agent ever wants to see nearby properties boarded up, of course, but Lakis said she's happy with the city's efforts to secure the other three properties in as an aesthetically pleasing way as possible.

"The city has been responsive, and they've actually done a good job making those homes look like they aren't so vacant," she said.

Rigler makes a quick inspection of the three properties and sees they are still secure. He knows it may take months -- even years -- for these properties to be put on the market, sold, and finally occupied. In the meantime, there are weeds to control. Windows to board. And entry points to check and check again.

"We don't know the situation these properties are in," he said. "All we know is that there's a problem, and we need to take care of it."

lesley@sltrib.com