What started out as a lunchtime conversation at a national conference back in 2010 culminated this past spring with state legislative reforms that dramatically strengthen blight prevention policies in Louisiana.
Specifically, a power that was previously available only in New Orleans is now open to all municipalities and parishes: the ability to enforce code liens through foreclosure. Another bill, reducing the redemption period for tax-delinquent properties, Act 436, passed the state legislature and faces a ballot measure in the fall of 2014.
“Both urban and rural communities in Louisiana were facing growing numbers of abandoned properties which, often, they were forced to maintain or improve in some way,” explains Mark Goodson, Executive Vice President and COO of the East Baton Rouge Redevelopment Authority, reflecting on a common challenge that spurred the statewide push for code enforcement reform.
From small pockets of blight to abandoned Main Streets, Goodson says, “everyone was dealing with it.” It’s a story familiar to those who work on urban revitalization.
Traditionally, if a Louisiana property owner was found to be in violation of a code, she could be cited and fined. Municipalities, however, had few options to enforce citations — and many owners knew it. As a result, owners of blighted properties often failed to act, and the municipality was forced to send in public workers to make necessary improvements. Blighted properties negatively impact everything from from public safety to property values, so it’s important to take care of code violations, but when cities aren’t able to recoup those costs, cash-strapped cities — and taxpayers — bear the burden.
Less familiar, however, is how stakeholders in Louisiana joined forces to change that status quo. Over lunch at Community Progress’ 2010 Reclaiming Vacant Properties Conference in Cleveland, a group of Louisiana leaders discussed their shared challenges and realized they could work together to create statewide fixes. “We brought that [intention] back and, over time, were getting calls from all over the state from folks dealing with similar issues and wanting to be part of whatever it was we had going,” says Goodson. As momentum increased, a Louisiana delegation went on to attend the 2012 Community Progress Leadership Institute, where they explored possible solutions.
“We landed on, as our top two issues, code enforcement and the redemption periods on tax adjudicated properties,” Goodson continues. Both of these issues required reforms to state law, but, “we had a good group of engaged people who were willing to step up and work their own legislative delegations as well as legislators statewide.”
An estimated 25 entities were involved in advocating for reform, including municipalities, parish governments, and organizations from around the state. Representative Patrick Williams from Shreveport and Senator Gerald Long from Winnfield sponsored the code enforcement legislation. “Both of them were fantastic in that they stepped up to sponsor these bills and were with us in the hearings and on the floor,” says Goodson.
Initially, however, the legislation’s champions faced resistance to the idea of enforcing code liens through foreclosure. For example, some legislators and state associations feared that the law would cause people who simply couldn’t afford to fix up their properties to lose their homes, or that local governments could use this as a means to take property. The coalition worked with these groups to address their reservations, which included developing standardized definitions of “blight” and “abandoned,” as well as clarifying that properties must be vacant.
With these changes, most of the bill’s critics became steadfast supporters. When the code enforcement legislation, Act 223, passed in the spring of 2013, it received unanimous support in the Louisiana House of Representatives and the support of all but two State Senators.
With the passage of Act 223, if a Louisiana property owner fails to respond to citations, is found to be in violation at an administrative hearing, and still does not fix up her property, local governments now have the authority to foreclose on the property. Adding even more “oomph” to the new law, code liens are now regarded as “super priority,” meaning they’re treated as equal to back property taxes and trump all other mortgages and encumbrances.
In New Orleans, where these authorities were tested and piloted beginning three years ago, it took only a few foreclosures before irresponsible property owners began to respond, improving their properties and paying code enforcement fines. The City brought in over $1 million in revenue in about 18 months — particularly striking given that, prior to the program’s implementation, New Orleans brought in essentially no revenue from code enforcement.
With the potential for significant revenue generation and community improvement, many localities are eager to roll out new code enforcement programs. Baton Rouge, for example, is creating a new code enforcement department that is projected to be revenue neutral within four years.
“The ability to know that you can recoup your costs is essential to being able to design a code enforcement program this way,” explains Goodson.
While these reforms mark a major victory, the power lunches will continue: leaders in Louisiana plan to meet twice each year to continue learning from each other and, if the need arises, to join together to advocate for the changes their communities need.