Friday, October 9, 2009
I'll have more posts in the future about what local governments might do to decrease the magnitude of boom-and-bust housing cycles that wreak havoc on cities and communities. To address the current housing crisis, cities across the country are imposing obligations on banks as well as purchasers of foreclosed houses to maintain housing exteriors. A new Nevada law is here, and a newspaper article introducing it is here. Creola Johnson also has a nice article (Fight Blight: Cities Sue to Hold Lenders Responsible for the Rise in Foreclosures and Abandoned Properties, 2008 Utah L. Rev. 1169 - I don't have a link to SSRN) that analyzes the tensions in more detail. It will be interesting to see if the costs of local mitigation efforts slow purchases of foreclosed houses. Purchasers have to pay, or get waived, costs the city incurs in cleaning up neglected, foreclosed properties.