By Ted Schnell • BocaJump
City officials are ready to begin enforcement of an ordinance the Elgin City Council passed in November to ensure the approximately 1,000 homes left vacant by the nation’s housing and mortgage crisis do not become a blight on their neighborhoods.
The collapse of the housing market started 2006 as prices started to fall and foreclosures started to rise. Experts say the housing bubble burst played a key role in the Great Recession of 2008, whose effects continue today. Some question whether or not the housing market’s decline has bottomed out yet.
Increasing joblessness that came with the recession triggered even more foreclosures. As property values continued to plummet, some even abandoned their homes as the values dropped so low that they were worth less than what was owed on the mortgages.
The result has been a glut of empty residential properties, in communities across the nation. Assistant City Manager Rick Kozal said Monday that Elgin is among many communities that are taking action to ensure that the banks or holding companies that control the vacant homes keep them in reasonably good condition while they are vacant.
“This isn’t really novel,” Kozal said. “It’s the type of thing where you’ve seen it in different areas, whether Florida, California … areas that have been hit harder than Chicago.”
Elgin Management Analyst Aaron Cosentino said Monday the city estimates there are about 1,000 vacant residential properties in the city, although the number can change from month to month.
Kozal said the ordinance would focus primarily on life-safety issues and habitability of the vacant homes, which also would be monitored for code violations.
“They’re going to be noting all code violations and they’re going to have to be corrected,” Kozal said.
Enforcement by contractor is cost-effective
Since the City Council passed the ordinance regulating such homes in November, Kozal said the city staff has been evaluating options for enforcing it. On Wednesday, the City Council will be asked to approve what was determined to be the most cost-effective option, he said: Contracting with Hoffman Estates-based B&F Technical Code Services Inc. to identify, register, inspect and monitor those vacant residential buildings.
“We took a look to see whether we could do it in-house, and it was determined that this would be the most cost-effective means of getting the work done,” Kozal said.
Both Kozal and Elgin Chief Financial Officer Colleen Lavery said the contract would be less expensive than hiring additional staffers who would be needed at the outset to identify and register the homes but then would face layoffs as the workload declines with time.
“We don’t want to hire people — this is going to ramp up and then hopefully go away,” Lavery said. “Then we (wouldn’t need) the employees.”
Under the ordinance, vacant residential buildings first must be identified and registered, There is an annual registration fee of $200 to be paid by the owner of the property, along with proof of insurance and a maintenance plan. Also required is an initial interior and exterior inspection, periodic subsequent inspections to ensure the owner is complying with city code, and a one-time $500 inspection fee.
Kozal and Lavery stressed that the fee structure is intended to be revenue neutral — meaning the fees are expected to cover the costs of the contract and the city’s own administrative costs but not generate additional revenue.
In its memo to the City Council, the staff advised it does not have the manpower to take on the additional inspections, which the memo states would require two new code officers at a cost of more than $160,000, and administrative assistance. The memo states that city also would face one-times costs such as a vehicle, computer, uniforms and other such equipment and supplies.
Under the bid, the city would pay B&F Technical Code Services Inc. $94 of the $200 annual fee for every vacant residential building registered, and $235 of the $500 fee for every vacant residential building the company inspects. The staff memo states that $235 inspection payment to B&F covers the initial, all follow-up, and long-term compliance inspections.