City of Burien says property values not declining faster than other cities
Burien city officials have rejected a resident’s claim that local property values are declining faster than those in surrounding cities.
North Burien resident Dick West has complained to the city council that the decline in Burien values was due to enforcement procedures that deal only reactively with deteriorating and foreclosed homes throughout Burien (read our previous coverage here).
West said that eight such houses in North Burien alone have cost the city $589,000 in lost revenue since that area was annexed in April 2010.
Again, “not so,” the city countered during the council’s April 22 study session, although it agreed that, like most cities, it did not actively seek out deteriorating properties.
City Attorney Craig Knutsen told council members that after working through legal constraints, Burien code enforcement staff cleaned up and secured a home – in foreclosure and deteriorating – that West and others had complained about in mid-2010.
Code enforcement staff was also successful “in obtaining code compliance for several [other problem] properties in North Burien shortly after annexation without the City incurring any abatement costs other than staff time,” Knutsen said in a written report.
Seen as a ‘Success Story’
“We viewed this as sort of a success story at the time, so we were incredulous” when West criticized the city for lax code enforcement at the March 4 and March 18 council meetings, Knutsen said.
Since responding to the initial complaints, the City Council has adopted a new code enforcement ordinance that expands the definition of “persons responsible for violation” to include financial institutions holding mortgages on properties “subject to a foreclosure action or … abandoned for at least 90 days.”
But while “this now gives the City an additional tool to deal with mortgage companies … it still does not avoid the problem of dealing with properties involved in a bankruptcy proceeding, Knutsen said.
In such cases, the city could “clean and secure the above property in response to the urgent complaints of Mr. West and others” but would “have had no choice but to absorb the cost of doing so.”
At last Monday’s meeting, City Manager Mike Martin called West’s repeated accusations “a case that was egregious … it was wrongheaded. I would like it to stop…. We take code enforcement seriously.”
King County Underscores Burien’s Position
An official with the King County Department of Assessments recently indicated agreement with the city’s position.
“The taxpayer raising these issues seems to have more of a beef with code enforcement or the lack of it in the city,” Debra S. Prins, director of the department’s Residential Division, wrote in a letter to a B-Town Blog reporter.
West “tries to draw a direct relationship between the drop in tax revenue and these properties. This can’t be done. Value is only one component of taxes.
“The document the taxpayer was showing comes from our Accounting division and is prepared each year,” Prins continued.
“It is reflective of all changes and does not differentiate between changes caused by financial institution sales, houses in disrepair or where jurisdictions have reached their statutory limits for taxation. Some of the reductions you see have to do with the impact of [Fire District 11’s] lack of ability to levy additional money.”
Home sales by financial institutions “do have an impact on area values but not necessarily because they are also in poor condition,” she added.
West also criticized the city for waiting until it receives a complaint to deal with a deteriorating or abandoned home.
“Mr. West is correct that we react on a complaint basis,” Knutsen said. “That is typical of most cities … we do not go out proactively looking” for code violations….
“That would require more financial support from the council.”
Martin added that if the council wants to consider proactive code enforcement, they can revisit the issue during a review of the city’s biennial budget this fall.
City Responds to West’s Claims
West had claimed at the March 4 council meeting that he had discovered mismanagement and misuse of city funds in providing Chase Bank free cleanup for an abandoned home at 11416 26th Ave S.
But, in his written report to the council, Knutsen said, “Actual events are as follows:
In June, 2010 … the City began receiving complaints [about the above address] from law enforcement officers and residents (including Mr. West) about excessive dumping of trash, construction debris, mattresses, and stolen vehicles on the property and adjacent street and reports of unknown individuals entering the abandoned house during the day and night.
The City was informed by King County that dumping in the street in front of the property had been a habitual problem prior to annexation and the County had frequently been called on to remove the debris.
After researching property records, the City found that Chase Bank had scheduled a foreclosure sale for the property but had not yet acquired ownership and that the property owner had filed for Chapter 13 bankruptcy protection. The City attempted to obtain code compliance from both Chase and the property owner but was unsuccessful in doing so.
Due to the urgency of the health and safety violations and complaints that had been received from the police, neighboring residents and Mr. West, the City negotiated a right of entry agreement with the property owner’s bankruptcy attorney, in order for the City to
enter the property to remove the garbage and secure the premises from unauthorized entry.
On November 10, 2010, the property was cleaned and secured by the City’s Public Works crew (less than $2,500 in in-kind labor cost). Waste Management provided dumpsters and vouchers to cover disposal costs and the City crew used materials on hand for securing the premises, so the City did not incur any additional out of pocket costs.
The City was not legally able to file a lien against the property for the abatement costs due to the “automatic stay” provision in Section 362 of the United States Bankruptcy Code, which prohibits such liens for charges incurred from the time the debtor has filed the bankruptcy petition until the bankruptcy has been discharged.
As stated in the document provided by Mr. West, the property would not be surrendered and the automatic stay would not be lifted until the debt reorganization plan was confirmed. This document did not state, as indicated by Mr. West, that the property was surrendered to Chase Bank on March 25, 2010.
To the contrary, according to King County property records, a Trustee’s Deed upon Sale transferring ownership from the bankrupt property owner to Federal National Mortgage Association did not occur until December 9, 2011. This was over a year after the City cleaned and secured the property.
“If Mr. West or his bankruptcy attorney has accurate contrary information regarding bankruptcy law or how and when the transfer of this property occurred, City staff would be very interested in reviewing it,” Knutsen said.
This is a developing story so stay tuned…