The Chronically Vacant Property Ordinance
A helping hand, coupled with basic expectations, to curb chronic vacancies in commercial and residential properties
One of the most frequently asked questions anyone in an elected office, community development, economic development or civic capacity is asked is: “What are you going to do about that vacant property?” A chronically vacant residential property can serve as a haven for vandals, decrease adjacent property values, create fire/health hazards and deplete pride in a neighborhood. A vacant commercial property can impact adjacent properties ability to attract customers, create an “unsafe” feeling among the public and can result in damage to adjacent properties (and the businesses housed within those properties) if structural, fire or water problems occur. There are communities with higher vacancy rates than Emporia, but solution oriented cities spot problems and create frameworks for solutions that mitigate problematic issues.
We have chronically vacant residential and commercial properties throughout Emporia. No area of the city is completely void of vacancy. While temporary vacancies are a normal and necessary part of building stock in a community, chronically vacant properties are evidence of serious problems. Chronically vacant properties typically occur for five basic reasons:
1. Sprawl- An over abundance of commercial or residential property can cause extended vacancies. When supply of something exceeds demand, some supply remains unfilled. Vacant properties can drag overall sale prices and rental prices within a market down while overextending infrastructure can drive taxes up. Declining sales and rental rates mean less money available to reinvest in properties, which leads to our second reason chronic vacancies can occur…
2. Dilapidation- Buildings that haven’t received basic and continual maintenance can develop problems over time that add to project costs. A form of dilapidation is the lack of modern amenities that are expected by most individuals (like a functional heating/cooling system). Dilapidation makes occupancy more difficult because, in addition to the purchase or rental of the property, the new owner/renter may be responsible for large capital upgrades to make the property livable or functional. Those upgrades can impact the overhead of a property owner, and construction loans may be difficult to procure (especially if the new tenant is a renter). Structural dilapidation can cause an unsafe environment that may require capital intensive improvements to ensure functionality. The longer a building is allowed to dilapidated, the more expensive the “fix”.
3. Absentee Property Owners- Out of sight can mean out of mind for property owners. If someone moves to a different city, state or nation and they don’t have to interact with a property (or members of the host community) on a continual basis, they may not care about the degradation of the property in question. This is especially true if the current owner isn’t the individual that originally purchased the property and they instead received the property through inheritance, divorce or some other mechanism. Some “out of town” ownership works well IF they have an in-town management agency, but without someone in-town looking after a vacant property, dilapidation can easily occur.
4. Unrealistic Price Expectations- We’ve all seen crumbling properties that we thought were essentially “worthless”, but when property owners are approached, they sometimes view the “demand” generated as a sign that their property is now worth its weight in gold. Whether for purchase or rental, unrealistic price expectations are a precursor for chronic vacancy, especially in an oversupplied market.
5. Property Speculation- A property might be chronically vacant because its designed to be chronically vacant. I know that sounds strange, but some individuals simply sit on a property as an “investment” while hoping that economic activity supported by other investors and businesses in the area raises their property value and creates enough economic pressure that someone will offer an exorbitant price. These individuals may talk “development”, but you don’t see buildings being built or existing structures being rented.
Now that we know some of the reasons why chronically vacant properties exist, what can we do to encourage occupancy. In Emporia, our City Commission, City Management Team, Emporia Main Street and a student intern named Hilary Becker struggled with that question for about two years. We needed a standardized way to register vacant properties, ensure their safety, collect contact information, collect sales or rental information, encourage a marketing plan and encourage owners to work with professionals in the area to generate occupancy.
By waving certain fees associated with redevelopment and working with property owners to access area financing for certain qualifying properties through organizations like Emporia Main Street, property owners will have more tools than ever before to ensure appropriate occupancy for their buildings.
For those property owners that continue to hold vacant properties for years without taking appropriate or effective actions to upgrade their buildings, find tenants or sell the property to someone with a useful and implementable concept for the property, a fine structure is in place for the most egregious chronically vacant property owners. The fine structure is set to increase on a yearly basis once the initial registration time has expired on the property, which will give property owners approximately two years to transfer or fill the property, and qualify for additional extensions if they can conclusively show they are taking realistic steps to combat chronic vacancy.
To view the full chronic vacancy ordinance, CLICK HERE.
The Chronically Vacant Property Ordinance will not take effect immediately. The ordinance will be published, forms will be produced and systems put in place to initiate contact and collect data. The impacts of this policy will take time to measure, and most property owners will never see an impact from this particular ordinance. But, for our most chronically vacant properties, a framework is now in place to convert the worst residential or commercial eyesores into functional residential or commercial properties. The City Commission and City Staff that worked diligently on finding an equitable solution to the chronic vacancy problem should be applauded for engaging a solution to mitigate our areas most problematic properties.