Northumberland County Comprehensive Blight Prevention/Remediation Program
A summit was held in October 2011 to address increasing concerns about the number of blighted properties in Northumberland County. Designed to gain consensus that a problem indeed existed and that it should be addressed comprehensively, the summit recognized that municipalities (with the assistance of the county) are in the best position to address blighted property problems.
In April 2012 County Commissioners entered into an agreement with the Housing Authority of Northumberland County they would hire a consultant and convene a Task Force to develop a comprehensive strategy for addressing blighted properties. At the first meeting of the Task Force in late April the nature and extent of the problem was discussed. In late May, the consultant led a facilitated session to identify and prioritize strategies for dealing with blighted properties.
There is growing recognition that dealing with deteriorated properties at the earliest possible stage will best address the blighted property problem.
The Task Force determined that the following prevention strategies have merit:
• Encourage municipalities to enact comprehensive property maintenance codes.
• Encourage municipalities to take advantage of state laws that prohibit “bad actors” from purchasing additional properties at tax sales.
• Develop a county-wide warning system to capture data on at-risk properties, and make a data-base available to municipalities to target these properties.
• Improve communications with District Justices to gain support in dealing with blighted properties.
Encourage Municipalities to Enact Comprehensive Property Maintenance Codes
Some municipalities may have enacted the International Property Maintenance Code , a user-friendly document that deals with property code issues comprehensively; other municipalities may be addressing code issues through numerous health and safety codes that have been cobbled together, causing confusion to the codes officer, not to mention the property owner.
Municipalities should be encouraged to adopt the International Property Maintenance Code or use it as a guideline in tailoring a comprehensive property maintenance code to address issues associated with property maintenance issues.
Encourage Municipalities to Take Advantage of State Laws That Prohibit Bad Actors from Purchasing Additional Properties at Tax Sales
Several state laws prohibit irresponsible property owners from purchasing additional properties at tax sales. State law allows municipalities to disqualify a prospective purchaser if one or more of the circumstances are present:
• Property owner has had a rental license revoked
• Property owner has delinquent taxes or municipal utility charges
• Property owner has outstanding code violations
However, it is necessary that the County Tax Claim Bureau establish a pre-registration process for prospective buyers of tax sale properties. This process would require that these prospective buyers register two to three weeks in advance of the scheduled tax sale date. The pre-registration list would be circulated by the Tax Claim office to the municipalities and municipalities would have the opportunity to strike any prospective buyers from the list, with just cause. The prospective buyer may choose to dispute the municipality’s assertion that one or more of the circumstances exist, so it would be best to require the municipalities indicate their objection no later than seven days before the tax sale date. This would give the Tax Claim Bureau the opportunity to contact the prospective buyer and give them an opportunity to produce any documentation in support of their position.
The County Tax Claim Bureau should initiate a pre-registration process for prospective buyers at tax sales as soon as possible and share this information with municipalities with the objective of disqualifying “bad actors” as future tax sales.
Develop a County-Wide Warning System to Capture Data on At-Risk Properties, and Make a Data-Base Available To Municipalities to Target These Properties
Arguably this is one of the most important strategies for preventing blighted properties. There are certain warning signs that can raise a red flag about whether a property is at risk of becoming blighted, including:
• Properties that have been encumbered by municipalities to correct code issues
• Properties that been condemned as unfit for human habitation due utilities being shut off.
• Properties that have delinquent taxes or municipal utilities
• Properties that have been listed for Sheriff or Tax Sales
While this strategy could provide a very effective tool, it requires the cooperation of municipalities to report information to a central repository, such as the County Planning Commission.
The county should request municipalities to voluntarily sign an agreement to provide information to the county and/or the county could require that municipalities that receive CDBG funds through the county sign a sub-recipient agreement that includes this language.
The County Planning Commission could share this information with municipalities on a monthly basis or add this information to the County’s web-site.
The county is already moving ahead to collect information on blighted properties from municipalities. A referral form has been drafted that would allow a municipality to provide information to the county on a property that meets the blight criteria under state law. Also, the county is moving ahead to encourage residents to provide information regarding blighted or at-risk properties. This information will help the County validate the need for funding from CDBG or other sources as requested by a municipality for the purpose of dealing with blighted properties.
Improve Communications with District Justices to Gain Support in Dealing with Blighted Properties
When an owner is unresponsive to a warning letter from the codes office, the municipality will file a code citation with the District Justice to enforce the penalty under the municipal code. Code enforcement officers may encounter resistance from the District Justice to assess the maximum penalty, assuming the property owner is found to have violated the code by the District Justice.
It is suggested that County and/or municipalities request that the President Judge of the Court of Common Pleas schedule one or more sessions with District Justices for the purpose of sharing information with the District Justices about the impact of blight on communities and to get feedback from the District Justices about any concerns related to imposing strong penalties on property owners that are found in violation of the code.
Remediation strategies deal with properties that are already blighted. These strategies can range from municipal sanctions, including the denial of permits, to the acquisition and tear-down of the blighted property. Based on the work of the Task Force, the following remediation strategies were thought to have merit:
• Encourage municipalities to implement provisions of Act 90.
• Encourage municipalities and the county to allocate CDBG funds for acquisition and clearance of blighted properties.
• Encourage municipalities to ticket for code violations as a summary offense.
• Encourage County District Attorneys to charge repeat offenders with a Second degree misdemeanor under the PA Crimes Code.
The Task Force’s remediation strategies are detailed below:
Encourage Municipalities to Implement Provisions of Act 90
Act 90 of 2010 became effective in April 2011; the provisions in this state law allow municipalities to put a lien against the subject property (and any other concurrently owned property (ies) in the Commonwealth of Pennsylvania) for any costs incurred by the municipality to bring the property into compliance with codes. The law indicates that the owner has six months to take corrective action before the municipality can encumber the owner’s property. This provision is a powerful tool to gain compliance from owners of blighted property because these liens act as encumbrance against the title of the property and must be paid off before the property is sold.
Municipalities may find two other provisions of Act 90 to be helpful: Owners of blighted properties that have been convicted of a first or second degree misdemeanor under the PA Crimes Code may be extradited from another jurisdiction in the United States to face trial in Northumberland County; also, municipalities may deny permits to owners of properties that are delinquent in paying taxes or have been convicted of serious code violations. This would include the denial of a rental license, thus prohibiting the property owner from re-renting the unit.
Case Study: Johnstown’s Implementation of Act 90
Johnstown was one of the first communities in the Commonwealth to implement the provisions of
Act 90. While the property owner challenged the denial of the issuance of a permit in court, the City of Johnstown prevailed and the owner made necessary repairs.
Encourage Municipalities and the County to Allocate CDBG Funds for Acquisition and Clearance of Blighted Properties
Northumberland County and entitlement communities under the state Community Development Block Grant program receive over $1.3 million in funds annually. The County and many entitlement communities are using CDBG funds for activities to eliminate blight, subject to the statutory cap that no more than 30% of the annual funding increment may be used for blight removal activities.
The county should encourage municipalities to budget the full 30% allowable for blight removal activities for the next 5 years with the objective of using these funds to leverage state and federal funding.
To the maximum extent possible, CDBG funds, as well as state matching funds, should be recouped by placing municipal liens against properties. When a property is sold by the owner, the municipality will be repaid, and the funds will then be available for additional blight removal activities. In this way, the funding will recycle many times over a period of time and increase substantially. Municipalities may be able to speed up the process by obtaining a judgment against the owner for the lien amount, and subsequently executing on the judgment.
Encourage Municipalities to Ticket for Code Violations as a Summary Offense
At the summit held last October, Mayor Ed Pawlowski of Allentown spoke about one of his city’s initiatives to address blighted properties. This plan involves ticketing property owners (and tenants) for code violations as a summary offense. The fines are relatively small ($25.00) for the first offense, but increase with each additional offense. Earlier this year, Coal Township enacted a similar ordinance. According to Rob Slaby, Coal Township Manager, this has been a very effective way to gain the attention of property owners that have ignored a warning letter from the codes office.
Encourage County District Attorneys to Charge Repeat Offenders With a Second Degree Misdemeanor Under the PA Crimes Code
Under state law the crime of “housing code avoidance” is punishable as a second degree misdemeanor which may result in jail time for the housing code violator. The law allows codes officials to approach the District Attorney about filing charges when the property owner has four summary convictions for the same violation at the same property. A first degree misdemeanor may be charged for five or more summary convictions.
District Attorneys in some counties have indicated that they do not have the time to prosecute such cases; in order obtain support, it would be advisable to open lines of communication about blight’s effect on communities.
The Task Force identified one effective strategy under this category:
Encourage Municipalities to Enact Programs to Incentivize Private Development
Municipalities, in cooperation with the County and area school districts, can encourage private development by enacting tax abatement programs. One such program authorized under state law is the Local Revitalization Tax Assistance Act, or LERTA. Under this law, taxing authorities, including municipalities, agree to phase in taxes related to improvements in real estate in a designated area. The taxing authorities continue to receive the same taxes related to the pre-improved value of the property. The tax abatement districts can provide for a phase-in of taxes on improvements for a period up to ten years.
Tax-Increment Financing (TIF), also authorized by state law, allows real estate taxes from a major commercial real estate development project to fund related site improvements with the approval of the taxing authorities. Essentially, a revenue bond is issued by the municipality; this bond is paid off with the incremental increase in taxes related to the new development.
Finally, federal historic tax credits can spur private investment by increasing the developer’s return on investment. Municipalities, with the approval of the National Park Service and in consultation with the State Historic Preservation office, can enact federal historic districts. Developers who want federal credits to rehabilitate a historic building in the district get a 20% credit for rehabilitation and related costs, with the caveat that the building is rehabilitated consistent with federal standards; property owners who do not want the credits are under no obligation to follow any standards.
Other Strategies for Consideration
Two other strategies should be considered for the remediation of blighted properties. While these did not rank as high as other strategies that were reviewed by the Task Force, they have been used to successfully combat blight in other jurisdictions. These two strategies are:
• Encourage appropriate entities to pursue appointment of a conservator.
• Establish a County Redevelopment Authority and encourage the Redevelopment Authority to acquire blighted properties through eminent domain.
Encourage Appropriate Entities to Pursue Appointment of Conservator
A 2008 state law allows municipalities and certain other parties to petition the county court to appoint a conservator to repair or demolish blighted properties when the owner has failed to do so. The property must be vacant and must not be actively marketed. The County Court approves a plan for rehabilitating the property after appointing the conservator. If funding is needed to accomplish the repairs, the Court may authorize the conservator to borrow against the property.
Case Study: Butler County Conservatorship Program
Since the inception of the state conservatorship law in 2008, Butler County has used conservatorship program extensively in two communities. For the most part, the blighted properties have been demolished and the land has been sold to adjoining owners, or is “banked” for future development.
Establish a County Redevelopment Authority and Encourage the Redevelopment Authority to Acquire Blighted Properties through Eminent Domain
The Pennsylvania Urban Redevelopment Law allows Redevelopment Authorities to acquire vacant, blighted properties through eminent domain, after giving the owner an opportunity to make corrective repairs and consulting with a County-appointed Blighted Property Reinvestment Board. While eminent domain powers should be used only sparingly, the threat of eminent domain is often sufficient to motivate the property owner to make repairs. However if the owner refuses to make repairs on a property located in a revitalization area, eminent domain may be necessary.
Sunbury has a Redevelopment Authority, but the balance of the County does not.
Case Study: Cumberland County Blighted Property Review Board
The Cumberland County Commissioners approved an ordinance appointing a Blighted Property Review Board (BPRB) in 2000. Under the terms of the state enabling legislation, the Board is made up of a county commissioner, a representative from the County Planning Commission, a representative of the Redevelopment Authority, and one or more representatives appointed by the County Commissioners.
Based on referrals from municipalities, the Redevelopment Authority recommends vacant properties which, under state law, meet the definition of blighted. The owner of the property is notified by the Authority of repairs which must be made. If the owner refuses, the property is referred to the BPRB by the Authority. If the BPRB concurs with the Redevelopment Authority, the property is referred to the County Planning Commission for a recommendation as to the appropriate reuse of the property. The owner is notified a final time about the need to take corrective action; refusal to do so may result in the Redevelopment Authority filing an eminent domain action in county court. Since 2000, over 100 vacant, blighted properties have been referred to the Redevelopment Authority, but only five have gone through the eminent domain process.
Putting the Pieces Together
The various strategies described above should be implemented on a county-wide basis where possible. This is easier said than done, with a total of 36 municipalities in the county. The County is in a good position to provide leadership on this issue, and can accomplish this by:
• Linking funding to enactment of blight strategies by municipalities
• Acting as a clearinghouse for information; Evaluating the impact of the program
• Establishing a Blighted Property Review Board
Linking Funding to Enactment of Blight Strategies by Municipalities
The County has 36 municipalities, which include two third-class cities and eleven boroughs. Seven of the municipalities are CDBG entitlements through the PA Department of Community and Economic Development (PA DCED). In addition, the County receives CDBG funds for the balance of the county. As indicated previously, these entitlements receive in excess of $1.3 million annually in CDBG funds, up to 30% of which may be allocated to blight prevention and remediation activities.
The County should approach these municipalities with an offer to apply for state funding on their behalf through a DCED program known as Keystone Communities, with the understanding that they will budget no less than 30% of their CDBG funds for blight prevention and remediation activities. In addition, the County should budget 30% of the funds it receives for blight activities; this would allow the County to seek the maximum grant of $500,000 from DCED as a match. Communities would also be required to adopt an ordinance implementing Act 90 and its provisions. In future years the county could apply for additional funding through this source, to the extent that the communities continue to appropriate their CDBG funds for blight activities.
One of the keys to obtaining state funding is to target the state and CDBG funds for maximum impact. Communities that participate in the grant application should be required to designate a revitalization area (not to exceed 4 blocks by 4 blocks). The state and CDBG funding would be targeted to address blighted properties in these areas. One exception would be any blighted property outside the revitalization area that is located on a gateway road into the community.
Revitalization plans should be drafted for the local revitalization areas. These plans would indicate what other initiatives the municipality proposes for that area, in addition to the blight activities. This could include, but not be limited to, public improvements such as street trees, street lighting, and street paving, as well as stepped-up code enforcement in those areas.
Communities with designated revitalization areas would also be encouraged but not required to:
• Enact the International Property Maintenance Code if they have not already done so.
• Disqualify purchasers with code violations, delinquent taxes, or revoked rental licenses from participating in tax sales
• Enact an ordinance to begin ticketing code violators as summary offenses
• Encourage municipalities to implement LERTA to incentivize private development
In addition to Keystone Communities funding through DCED, the County will attempt to supplement the pool of funds targeted at blight prevention and remediation by pursuing other state/federal sources such as Neighborhood Assistance Program (NAP) tax credits and HOME funds. NAP is a program that allows corporations to provide a charitable donation to a non-profit in exchange for a 70% credit against their state corporate net income taxes. HOME program funding could eventually be sought from the state for owner-occupied housing rehabilitation or first-time home buyer programs in the targeted revitalization areas. Finally, the county intends to identify and pursue foundation funding that could be added to the pool of funds for this blight prevention/remediation program.
Acting As a Clearinghouse for Information; Evaluating the Impact of the Program
The County can continue to provide leadership on this issue by becoming a repository for information. One of the keys going forward is to maintain a data base of properties that are blighted or at risk of becoming blighted. As indicated previously, the county intends to collect this data and make it available to municipalities on a monthly basis. This will no doubt prove useful, especially for measuring the impact of the County blight prevention/remediation program. One way to do this is to track the number of blighted properties against the goal of reducing the number of blighted properties by 30% in three years and 50% in five years. In addition, it is important to track the amount of public and private investment in the revitalization areas. Other performance measures could include:
• An increase in building permits issued
• The average dollar value of permits issued
• A reduction in properties listed/sold at tax sales
• The increase in property values
Establishing a Blighted Property Review Board
In order for a Redevelopment Authority to acquire blighted, vacant properties under the Urban Redevelopment Law, it must appoint a Blighted Property Review Board that will evaluate whether the property meets the definition of blight, based on the criteria in the statute. If the owner refuses to make corrective repairs on a property identified as blighted, the Redevelopment Authority may proceed to condemn the property and redevelop the property. As indicated previously, these eminent domain powers should be used sparingly, but the County would be supporting the municipal effort to address blight by providing municipalities with leverage to gain the attention of the blighted property owner. As the Cumberland County case study indicates, the threat of eminent domain is often enough to get the property owner to make corrective repairs.
Blighted properties negatively impact a neighborhood, resulting in a decline in property values and reduced private investment in the area. To the extent that the County and municipalities can implement an aggressive blight prevention/remediation program, excellent results will follow. These results will go beyond the immediate physical improvement of tearing down or repairing the blighted property. Higher property values, increased private investment, and a broader, more stable tax base will be medium- and long-term outcomes of a concerted effort to address blight in the County.