Jersey City Taking Aim at Vacancies


Published May 7, 2012

By Heather Haddon

JERSEY CITY, N.J.—A historic Episcopalian church left to be claimed by squatters; an abandoned house where police discovered a dead body on the front porch; a vacant brownstone overrun with weeds after its overseer was arrested on bank fraud.

As this gritty former manufacturing town tries to reinvent itself, officials have been wrestling with a stubborn phenomenon of urban blight: hundreds of abandoned buildings. About 950 of the roughly 40,000 properties in this waterfront city were classified as abandoned in a recent count, a number that city officials attribute to the housing-market collapse.

"Almost every block in this city has a vacant building on it," said Mark Redfield, assistant director for housing code enforcement in Jersey City. "It's really a horrible thing for society."

Jersey City officials fanned out across the city in March to flag vacant buildings and add them to a growing registry—part of an aggressive use of the Garden State's abandoned properties law. One of the toughest in the nation, the law allows local governments to set up abandoned property registries, require owners to join them and compel scofflaw landlords to do something with their buildings and pay their property taxes.

If property owners don't respond, the city can take them to court to acquire the properties to sell them or tear them down for redevelopment.

At least 36 other municipalities have undertaken similar efforts, but few with the zeal of Jersey City, said Diane Sterner, executive director of the Housing and Community Development Network of New Jersey, a nonprofit. Irvington, Newark, Orange and Paterson have also been assertive practitioners of the law's powers, she said.

The registries have become popular across the country as cities look for tools to clean up after the recession and the housing bust, said Alan Mallach, a Brookings Institution resident who focuses on housing. Hundreds of towns have voluntary registries, he said.

"New Jersey is only part of the picture," he said. "It's certainly a major trend."

In Jersey City, the vacancies are situated throughout the gentrifying city, from lower-income areas in the south and west to the city's tonier neighborhoods around Grove Street. Some of the worst streets have several vacant properties per block.
At least 406 properties have been officially registered and another 200 are going to court. The rest are in the process of being registered or served with warrants, Mr. Redfield said.

At least 150 vacant properties that were deteriorating are now being rehabbed, and 15 others were demolished, he said.

The city inspects the properties at least every 45 days to assess their conditions and publishes a list of them periodically in the legal notices of local newspapers and on the city's website.

New Jersey's law—the Abandoned Properties Rehabilitation Act—was passed in 2004 during the housing boom and wasn't used much until the bubble burst in 2008, Ms. Sterner said.

Beyond Jersey City, city administrators have identified 3,330 abandoned properties in Newark, Paterson, Orange and Irvington, she said.

Under the act, a property is defined as "abandoned" if it is unoccupied for six months before inspection. It also must be a nuisance, uninhabitable or have an owner who is delinquent on property taxes.

The law gives the city the power to seize property through "spot eminent domain." Owners who don't respond to notifications from the city are at risk of having their buildings taken over by the government and the property sold.

The real-estate industry has opposed vacant property registries nationwide, arguing that they are cumbersome. Real-estate developers have also said that local governments already had a powerful tool at their disposal—placing property tax liens on buildings owned by scofflaw landlords.

"That's the best way to do it. Eventually the lien is going to be paid off," said Len Rosenberg, a New Jersey real-estate owner at West Hudson Management.

Jersey City officials argue that its registry has been effective. Mayor Jerramiah Healy said in a statement that the "aggressive approach" has helped improved Jersey City neighborhoods in the wake of the real-estate collapse.

Vacant homes depress property values, and officials said the city loses tens of thousands of dollars in property taxes every year due to abandoned buildings. Officials also expect to recoup some property taxes from owners who haven't paid them or through redeveloping the lots they obtain in court.

The city spends roughly $100,000 a year to maintain and secure vacant properties, according to city estimates. Further, the registry has generated $101,000 in revenue for Jersey City from owners who paid the $250 fee for being on the list, said Mr. Redfield.

Many of Jersey City's vacant buildings are in foreclosure, while others are unsold investment properties.

The Episcopalian church where homeless people slept, for example, had gone into bankruptcy. Since its appearance on the registry, the owners have cleaned up the property and installed a fence to deter future intruders, Mr. Redfield said.

The downtown brownstone is also being fixed up by its owner, who hadn't realized that her property manager had been arrested, he said.

And as for the building with the dead body, the owner still hasn't responded and the city is maintaining it. If the owner doesn't respond within 60 days of the original notice, the city can force the matter into court.

If the owner does register, city officials can better communicate with a known entity, as owners often hide behind limited liability companies, Mr. Mallach said.

Statewide, there has been no academic study on the effectiveness of the registries, and it takes a dedication of city resources to make them work, Mr. Mallach said. He called Jersey City's approach "creative."

"It's easy to pass an ordinance, but it's work to make it real," he said.

A version of this article appeared May 7, 2012, on page A19 in some U.S. editions of The Wall Street Journal, with the headline: Jersey City Taking Aim At Vacancies.