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Edited on Wed Aug-04-10 11:40 AM by happyslug
Most of these homes are not only in bad conditions but behind in Mortgages and taxes. In those Counties outside of Philadelphia, Allegheny (Pittsburgh) and Lackawanna (Scanton) Counties, tax sales are done once a year. These tax sales do NOT eliminate any other liens on the property (Including any Judgments or Mortgages). If the property is NOT sold at the Tax Sale, it can be sold at an "Upset" Sale in the form of a "Private Sale" or another auction. At these Upset Sales the property is sold lien free i.e. the Mortgages, taxes and Judgments are wiped clean. While the County Tax Claim Bureau coordinate the sales, it must meet the approval of all the tax bodies involved (Not only the Local Municipality, but the School District and County, all of which impose taxes on the property). Once the upset sale is scheduled, the property is sold (unless someone objects AND the Court upholds the objection, rarely done, but it takes 30-60s days for the process to run ONCE someone indicates that they would like to buy the property).
The City of Pittsburgh (and the rest of Allegheny County) and Philadelphia operate under different rules, but the results are the same. The Buyer ends up owning the property free and clear.
Any Federal Tax liens will remain unless the IRS waives them, such a waiver can be obtained by the IRS if the person who owns them money will NOT get a cent, or if the original get any money, the IRS get the money. N ow that sounds easy, but dealing with the IRS is difficult, they want paid and the sole purpose of the Federal Tax Lien is for the IRS to get paid. Thus the IRS does NOT like giving up its lien unless its gets the lien paid in full. Furthermore the lien is NOT on any one property, but ALL of the property of the person who owes the IRS money. Thus you can have a $1000 property with a $50,000 Federal Tax lien that the IRS will NOT waive, for it includes other properties that make up the $50,000. Yes, IRS liens are a pain but a factor when it comes to buying property like these.
As to any claim by the State, those must also be satisfied (or the State agree to waive the claim) but such claims are rare for the state has no real estate tax, relying on the state Income Tax and Sales tax instead.
Any way, the City of Pittsburgh had a program to obtain title to such properties and then sell them for nominal costs to people who will fix them up. I believe Philadelphia has a similar program. The problem is most such housing is in need of major repair (i.e. new electrical, new heating, new plumbing, new walls and floors etc). It is often cheaper to tear them down and build new. In either case (New Construction or re-build if the house is NOT that far gone) you still need money to do the worked needed. Furthermore before you can obtain a mortgage you have to have the work DONE.
This is where agencies to help the homeless come into play. Many such agencies prefer to deal with New Homes thus avoiding any issue of lead paint abatement (Lead Paint was outlawed in 1972 for use after 1976). One of the problems in my home town of Johnstown was that the highest lead content paint was used in Industrial buildings (And the major reason the US rejected the International ban in lead paint first proposed in the 1920s). Every so often someone is found living in a home with high lead paint content, higher then any normal household paint ever had, for some workers, 50-100 years ago took some surplus industrial paint home and painted his house with it. You can not tell till your children start having signs of lead poisoning. By then some damage has already been done and any previous owner of the house is liable. Since we are dealing with Children, and parents can NOT waive the rights of their Children, any previous owner of the property can be sued by the Children for the damages the lead caused them and that generally will bankrupt most aid agencies.
To avoid such a situation most agencies prefer new housing, or a home they can get tested as being "lead free" i.e. a home built since 1976, or whose interior walls have been replaced since 1976. Most of the homes featured are older then that and better then not chance of having lead paint somewhere in the home.
Now, some agencies can still take over these homes and do the needed repairs. The problem is most such groups tend to be small and under financed. There do there best to avoid Lead Paint, but it is a factor when it comes to funding repairs. Most homes need only marginal repairs. Most will need a new Furnace (about $2000), new Stove (About $500), New Refrigerator (About 500), new Electrical box (About 100 PLUS installation by a trained electrician, total about $2000) and wiring and some interior walls repaired (Dry wall is cheap but you are still looking at about $500 per wall replaced). Wiring varies to much to give a rough estimate but if we exclude the new walls you have to install after replacing the wiring you are looking at another $2000 over and above the cost of the new Electrical Box). Other houses need a major paint job on the exterior. In the case of Brick homes, the bricks often need to be re-glazed (know as Re-pointing) so that water no longer gets behind the bricks via the missing mortar, and into the home, a major problem with brick homes over 50 years old or older. Re-pointing costs about $2000, a new roof about the same (Many older homes need a new roof, most still have the original roof put on 50-100 years ago).
Notice the cost to rehab a house can be expensive. The larger the house the more expense. If we just accept what I consider the minimum work needed in most such homes, Nee heating, New Electrical box, New Electrical Service, New Roof, and new interior walls installed after all the other work is done you are looking at $10,000. Remember this is over and above what you paid for the house, over and above any taxes you pay and over and above any utility service for the house. Many of these homes, even after you do the repairs needed will still be worth less then $10,000 do to their location. Furthermore the people we are looking to move into these homes tend to have the least skills when it comes to home maintenance (i.e. most have NEVER owned a home, and when they rented they were told NOT to do any repairs, the Landlord would do it instead). Thus not only will the agencies have to finance the above repairs, they will have to provide support for the people who moves into such homes.
For this reason the people who have had the most success with such programs tend to have a broad support group (Which tends to be their church). The African American Baptists Church tend to do this better then most other churches (And I am talking as a Catholic). The main reason is the African American Baptists Church retains more of the traditional role of the Church i.e. a meeting place for the community, then have other churches. They know they neighbors and fellow church members (Who tend to be the same), those that can use a little help and the type of help they need (Not what they claim to need, but what they need). They can judge who can best be helped with a new home, and who such a new home would be a waste of resources. Yes, Politics comes into play, local and local-church politics, but that is the nature of such programs. On the down side, the African American Churches tend to have the least money for such programs and thus need the most support from the local municipality. Here the larger mainline Churches (Catholic and Mainline Protestants) do a better job. The Mainline Churches pull from a wider group of people with a wider source of income (for example, today we in the US have more Catholics than Baptists church members, but there are twice as many Baptist churches then they are Catholic Churches). This gives such Mainline Churches more money for projects like we are discussing AND more access to the powers that be within the local government.
I do NOT want this to become a debate on theology. I am avoiding religious beliefs for that reason. All I am pointing out that the African American Baptist Church can be a center for such programs. I am also pointing out they need assistance and that can be provided by the mainline Churches or other similar organizations (even if organized on non-religious lines, for example the Communist parties in those countries where it is still a sizable party, never a fact within the US, but sill a fact in Russia, I use it as an example but I have to point out I do NOT mean the US Communist Party, it has always been to small, if it has membership like the Catholic Church that would be a different story).
Some private, non-religious groups have made efforts in this matter, but we as a society should try more. The biggest handicap is a lack of money by the people who are in the best position to do something. We have to work to "solve" that dilemma, one way would be out reach programs to such organizations if they need money AND outreach to the Government to set up programs to take over such properties and arrange for low income people to move into them with adequate repairs. We all must work together to make such a program work, but the first step is to see where we are and to help those groups who are trying to solve the problem.
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