Massachusetts’ urban centers have been the hardest hit by declining property values, and city managers are scratching and clawing to keep neighborhoods intact and stabilized.
In cities like Worcester and Springfield, when the rightful owner can’t be determined or refuses to maintain the property, the cities are taking maintenance into their own hands to protect the residents and the value of their homes.
Worcester and Springfield have collaborated with the Massachusetts Housing Partnership (MHP) to promote a robust receivership program to keep homes heated and habitable, not abandoned and boarded up.
When inspectors see a building that is a danger to its tenants, violates the sanitary code, or has already been abandoned, the cities’ machinery springs into action. The owner of record, whether a person or a lender, is contacted to resolve the issues immediately. If the owner is unresponsive, the city petitions the housing court to name a receiver to act as custodian for the property.
The receivership statute has been on the books since 1993, but the law hadn’t seen wide use until the most recent housing crisis, said Rita Farrell, senior advisor to the MHP.
Farrell said receivers can collect rent, make repairs, or borrow money to improve the condition for the property. All costs, including compensation for the receiver, are recorded as a high priority lien on the property, regarded second only to municipal liens and before all other debts.
The city of Boston has declined to take part in MHP’s receivership program, relying instead on Mayor Menino’s Foreclosure Intervention Team (FIT) instead.
The team works to improve particularly foreclosure heavy neighborhoods, like the Hendry Street area in Dorchester, or Dacia-Quincy Street and Langdon-Clarence Street areas, both in Roxbury.
The FIT plan hinges on fixing up those neighborhoods in order to keep property values intact. The city attempts to do this by increasing police activity, improving streets, removing graffiti, adding street trees and stepping up Boston’s sanitary code enforcement in those areas.
Lisa Timberlake, a spokesperson for Boston’s ISD, said while the city isn’t participating in MHP’s expanded program, it will still apply for receivership as a last recourse.
“If the property is not up to code, and deemed unfit for human habitation, and we’re in the court system and nothing is being done, we can file for a receivership,” Timberlake said. “We have to take control of that property, board it, control it and put a lien on that home for the costs.”
For 22 years, Judge William H. Abrashkin served as first justice of the western division of the housing court department of the Massachusetts trial court in Springfield. In the winter of 2006 and 2007, when energy costs were very high, he began to rely heavily on the receivership statute to help residents deal with heating woes. Abrashkin saw approximately 40 cases where code enforcements were brought to the housing court because rightful property owners couldn’t be found.
“The practical problem that arose was that the cases come up very fast … with very little time to work with, and it’s really hard to find a receiver,” Abrashkin said. “It turned out to be quite a daunting and difficult challenge to find a receiver and get them into place before people had to lose their homes and end up on the street.”
With this in mind, Springfield began to streamline their receivership process. Receivers were lined up and trained, and the city created a list of go-to property managers or agencies that would take control and maintain the property.
So when the sub-prime foreclosure crisis smashed it in the teeth starting in the fall of 2007, the city wasn’t totally unprepared.
Worcester also started to see people walking away from their homes in 2007, and the city manager scrambled to put together a program to slow down the massive devaluation, displacement and disruption that comes from property abandonment.
The city manager, Michael O’Brien, reorganized the Inspectional Services Department (ISD), and then sifted through the city’s data and created a metric that could predict where abandoned properties might pop up, according to Scott Hayman, the city manager housing director.
The ISD did sweeps of those neighborhoods and referred sanitary code violations to the housing court, trying to stay on top of the wave of abandoned properties.
The city then reviewed rules and ordinances regarding those properties.
“That’s when we decided to dust off our receivership program,” said Hayman. “It’s been great, both on the human side because we’ve helped many tenants, and to stop the decline of the property.”
Receivership is often the cheaper alternative, anyway.
“The cost for us to board up, condemn and relocate people would exceed the cost of receivership,” Hayman said. “We really feel strongly of keeping people in place and keeping them operating is a far better alternative.
“Just the threat of receivership has been enough to flush out the responsible parties.”
Abrashkin, who stepped down from the housing court to serve as executive director at Springfield Housing Authority in July 2008, said having the actual owner step up is the court’s best-case scenario, but when properties are too far gone that rarely happens.
Often banks claim not to know that their interest is in the property.
“They just bought the commercial [security],” Abrashkin said. “They’re surprised that the farther you go in the legal foreclosure process they become responsible for the property.”
Abrashkin said all stakeholders in an abandoned property, including banks, are helped by the receiver fixing the property.
“The stakes for the residents in these cases are very high,” said Abrashkin. “They stand to lose their homes and be on the street. The stakes for the property owner and the bank are high, because of the value of the property. [Receivership] tends to keep the value higher, because it’s opposed to the property being condemned.
“The community has a very direct interest in trying to not let these properties deteriorate past a certain point. When these properties get condemned and boarded up, it has a direct draining effect on the value of the rest of the neighborhood.”
In January, MHP started working with Worcester and Springfield to help train, fund and administer a more robust receivership program. MHP is working with local housing advocacy groups and non-profits to pre-qualify more receivers and do cost assessments for eligible homes.
Right now, multi-family homes are more likely to go into receivership, according to Farrell. However the program is gaining steam; MHP recently received a $165,000 grant from the state’s Department of Housing and Community Development.
Farrell said MHP plans to bring their receivership program to New Bedford in the coming weeks, and hopes that it will expand further in Massachusetts because cities need all the help they can get.
“A lot of cities can’t hire, so there are hiring freezes,” she said. “There is a huge burden when there are that many properties where owners aren’t taking responsibility.”
Lucy Warsh, spokesperson for Boston’s department of neighborhood development, said the mayor has been tracking foreclosures in Boston since 2005. Some of the mayor’s programs overlap with MHP; Boston and the state still work together to stem foreclosures in Boston’s hardest hit neighborhoods.





