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Sobering abandonment data cries out for action.

The industry has known for some time - and Real Estate Weekly has been reporting - that more and more housing is being taken each year by the city through the in rem process for nonpayment of taxes. Nevertheless, the magnitude of the in rems cited recently is staggering.

By reporting the hard default and abandonment numbers, the Mayor has moved the story from the trade papers and real estate columns -where, essentially, the "preaching" is to the converted - to the Metro Section, with its large, public readership.

This is an important move because in rems and abandonment are more than a housing problem and more than statistics. All who live and work in the city are affected. The city is forced into the unwelcome role of landlord. The ranks of the homeless are increased and the fiscal stability of the city is threatened: the tax roll is now down over $2 billion.

Just imagine! The city last year listed 18,003 properties on the tax arrearage list. Further, the city Finance Department admits that the list lags reality by one to three years, depending on the amount of tax arrears on the property. Total in rems are, therefore, much higher than the city reports.

Moreover, each unit that is taken through the in rem process costs the city $3,000 to operate, according to an Administration spokesman. In addition, no taxes are coming in for these properties which costs the city so much to operate.

Over the years, as a result of defaults and abandonments, we have lost enough housing to shelter the entire population of Boston and then some.

Calling further attention to the seriousness of the rem problem here is that, in the past year, fewer and fewer owners used the city's liberal reclaiming regulations to get back their foreclosed properties. For example, in 1989 nearly 12,500 owners paid some back taxes and reclaimed their buildings. Last year, this number had declined to below 5,700.

It is time for city and state officials to look at the problem realistically and do something about it. For example, the following must be done immediately:

* Establish a means test for anyone covered by the rent laws;

* Provide subsidies to tenants who truly need help, and adjust welfare shelter-grants to realistic levels;

* The Housing Court must cease to function as a surrogate welfare agency for tenants;

* Mandate the Housing Court to require the deposit of rents from tenants during summary proceedings. Such actions in this court, by their nature, require quick disposition rather than being allowed to languish for months;

* Phase out rent regulations on apartments renting below the levels covered by the laws adopted earlier this year. The $2,000 a month rent level or $250,000 income level covered by the current law hardly affects the city's housing stock.

Of course, there are many other problems that must be dealt with - high real estate, water and sewer taxes, red tape, a patchwork of rentals, the lead paint crisis - whose resolution is necessary and which potentially could be very destructive for the affordable housing industry - and we could go on.

We urge Mayor Giuliani to meet with representatives of owner organizations to explore what must be done to avoid the continued losses in the city's privately-owned affordable rental housing stock.
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Title Annotation:Review and Forecast Section II; abandonment of residential apartment buildings in New York, New York
Author:Keenan, Carol
Publication:Real Estate Weekly
Date:Jun 22, 1994
Words:550
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