City of Minneapolis Fees Exacerbate Housing Woes

It might be misplaced, but I always feel a twinge of sympathy whenever I see a broken-down car on the side of the road with a ticket on the windshield.

Yes, the owner should have maintained their car, and no, they shouldn’t have abandoned it on the side of the road. But adding an expensive fine to all the car owner’s other woes seems like kicking somebody when they’re down. If they didn’t have money for the repair(s) or the tow, where are they going to get the money to pay the fine?

(Ben Cohen, of Ben & Jerry’s ice cream fame, tells of a gym teacher in grade school who threatened that if he and Jerry couldn’t run a mile in less than 12 minutes, “they’d have to keep running it over until they did.” Cohen drily notes that if you can’t run a mile in less than 12 minutes the first time, you probably won’t be able to the second . . or third, or fourth).

In a nutshell, that’s how I feel about Minneapolis raising the annual fee it levies on vacant and abandoned buildings to $6,000 this March (a 300% increase!).

According to the city, the increase was prompted by the “high amount of staff time and resources required to monitor and manage” such buildings. The city’s Web site goes on to cite “the high volume of police and fire services associated with vacant properties, inspections services, unpaid water and sanitation bills, and expenses for garbage removal, grass cutting, and securing of structures.”

Why shouldn’t the city be reimbursed for all these costs? And what’s fairer than getting the (ir)responsible homeowner to pay?

Unfortunately, common sense suggests that the chances of actually collecting this fee from the homeowner — assuming anyone knows who it is — are not high. Due to the way mortgages are now bundled and re-sold — often more than once — the chain of ownership can literally vanish into the ether.

In the vast majority of cases, then, the vacant building fee is destined to simply become a special assessment, added to all the other unpaid fees attached to the (rapidly declining) property. These fees ultimately become the responsibility of the home’s next buyer.

If there is one.

Vacant properties need all the help they can get. By definition, they’re already in tough shape, in tough areas, and scare off all but the most intrepid (and handy) would-be investors and owner-occupants. The one thing they’ve got going for them is that they’re cheap. Unfortunately, Minneapolis’ hiked vacant building fee undermines even that advantage.

P.S.: I wonder how many of those abandoned-car tickets actually get paid???

About the author

Ross Kaplan has 19+ years experience selling real estate all over the Twin Cities. He is also a 12-time consecutive "Super Real Estate Agent," as determined by Mpls. - St. Paul Magazine and Twin Cities Business Magazine. Prior to becoming a Realtor, Ross was an attorney (corporate law), CPA, and entrepreneur. He holds an economics degree from Stanford.

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