Building Inspection Programs for Foreclosures in Michigan

Building inspection programs have been created by several communities in Michigan to prevent vacant foreclosed buildings from causing blight in neighborhoods.

According to the Southeast Michigan Council of Governments, implementing inspection programs is a proactive strategy to reach out to building owners. Owners are assisted in their maintenance efforts instead of being penalized immediately.

Among communities that have launched inspection programs are Clawson, Hazel Park, Dearborn, Mount Clemens and West Bloomfield Township. These communities have adopted ordinances that require owners of vacant homes and pay monthly fees so that the properties are maintained. Since the program was implemented by Dearborn last year, around 200 vacant homes have been registered.

While others understand the need for communities to create the inspection program, others such as Allen Morris, head of real estate management firm North Bloomfield Properties, considers the program as another layer of bureaucracy. It appears that local officials are piling on fees, according to Morris.

Communities have been charging between $25 and $150 for the vacant-home inspections. Inspection fees are also being charged by some communities when homes are sold.

Real estate professional Paul Mychalowych has also been opposing the building inspection program. He said that registration is an additional paperwork for someone like him that oftentimes manages repossessed properties for banks.

However, some bank officers understand the rationale of the program. While the fees are additional costs for banks, banking firms are part of communities and they need to follow local ordinances, according to Gail Madziar, spokesperson for the Michigan Bankers Association.

Since 2000, the number of unoccupied residential properties in southeastern Michigan has been rising, growing from 5.5 percent in 2000 to eight percent of all homes in July this year. In Wayne, the percentage climbed up from 7 percent in 2000 to nearly 12 percent in July. In Oakland, the percentage rose from 4.2 to over 6 percent.

Residents are grateful for the ordinance because it has been ensuring the maintenance of vacant properties near their homes.

Dearborn was among the first cities in the Detroit metro area to carry out the inspection program and has been enjoying the positive results of the scheme.

According to Art Gutowski, program coordinator for Dearborn residential services, the scheme of tracking foreclosed homes, finding property owners and monitoring changes in ownership entails unique challenges for the city, but he explained that the building inspection program is crucial to the preservation of communities.