Indio Police Department Tackles the Foreclosure Crisis
Between 2002 and 2007, the city of Indio, California experienced a housing boom, but by late 2007 found itself on the leading edge of what is now a national foreclosure crisis. Faced with increasing numbers of citizen complaints of poorly maintained properties as well as concerns that neighborhood blight was leading to more serious crime and disorder, the Indio Police Department launched a multipronged project to contain the impact of vacant properties on the surrounding neighborhoods.
Indio and Its Foreclosure Problem
Indio, California is a city of 84,000 people located 120 miles southeast of Los Angeles in Riverside County. Although not a new city—it incorporated in the 1930s—approximately 40 percent of the current housing stock was built in the most recent housing boom. Typical of the time, much of it was bought and financed through loans that were eventually packaged together into mortgage-backed securities. The rapid escalation of home prices brought an increase in investment purchasers and non-owner-occupied homes. By January 2008, 1,400 homes were in foreclosure or preforeclosure, representing 4 percent of the city’s housing stock, at a time when the national rate was still less than 1 percent. The number of foreclosures continued to grow throughout the year, so that by January 2009 the rate had increased to 8 percent of Indio’s homes.
As the number of foreclosed properties increased, so too did the number of vacant properties. Approximately one-third of the foreclosure properties were vacant and both the neighbors and the police were taking notice. According to Lieutenant Rich Bitonti of the Shadow Hills District, "In some of our neighborhoods you could drive down the street and see many as 10 foreclosed properties on the same street. The overgrown yards, damaged gates, and broken windows made it very inviting for local thieves." Citizen complaints of code violations were climbing steadily and increases in property crimes associated with these properties, in particular metal theft, were tying up police time. Even within gated communities, the Indio Police Department was seeing entire homes stripped down to the drywall of anything of value. This was making these properties harder to resell and staying on the market without capable guardianship for longer amounts of time.
The Police Department Responds
The Indio Police Department is the largest, most visible branch of the city government, with 85 sworn officers, 60 civilians, and a tradition of incorporating partnerships and problem-solving activities into its work. Somewhat unusually, the police department is also responsible for enforcing all municipal and public nuisance laws, and maintains a 12-member code enforcement team for that purpose. It was logical that the department would take the lead in developing a response to the city’s foreclosure problem. It also was no surprise to others in the city that this response would result in the shifting and sharing of responsibilities with the city council, social services, and even the banking industry.
To start, the Indio Police Department wanted to better understand the nature of the problem. Department personnel analyzed code enforcement data, citizen complaints of nuisance violations, and conducted windshield surveys to determine the locations and conditions of foreclosure properties. They found no patterns to the foreclosures, which crossed the city and affected every neighborhood and every economic class. They established that properties that were vacant were a bigger source of disorder problems than those that were still occupied. They also knew from experiences in the economic downturn of the mid-1990s that getting banks to take responsibility for the conditions of vacant properties would be a serious challenge. They researched the state foreclosure laws and discovered a gap that resulted in lenders not being required to secure or maintain properties during the foreclosure, a process that typically takes more than 300 days to complete. They also found that there was no one source of accurate and timely information about property owners. “This lack of information meant that staff were spending a tremendous amount of time and resources trying to track down the responsible parties,” said Jason Anderson, an Indio code enforcement officer.
From this work, Indio Police Department personnel developed a three-pronged solution: 1. They created a comprehensive foreclosure registration and maintenance ordinance; 2. They ensured that the Code Enforcement Team had the necessary tools to enforce the new ordinance; and 3. They created a Housing Resource Center focused on keeping people in their homes so that the properties would not become vacant. A media blitz, continuing education programs, and ongoing informal meetings helped inform lenders, homeowners associations, and the general public of the program.
The foreclosure registration and maintenance ordinance was passed by the city council in February 2008. It requires lenders to inspect property prior to filing a Notice of Default or Deed of Trust and determine if it is vacant. The lender must then register all vacant properties with the police department so that code enforcement has accurate records of who is responsible for the property’s maintenance. The information is stored in the department’s CAD system so that officers responding for calls for service to those properties know whom to contact. The ordinance further holds the lenders responsible for securing and monitoring the property against criminal activity and blight. Lenders pay a registration fee for each property to offset the cost of enforcement. Violations of the ordinance are misdemeanors and can result in arrest and/or administrative fines up to $25,000 per violation.
The Code Enforcement Team took the lead in educating lenders, realtors, and community members about the new ordinance. They built partnerships with local realtors, property managers, and home owner associations, recognizing that they were the local individuals who would have the most vested interests in the maintenance of the properties. They also increased their enforcement efforts, establishing that noncompliance would not be tolerated.
Code enforcement officers also took an active role in promoting the third prong of the approach—referring homeowners at risk of foreclosure to the new Housing Resource Center. The Center, the first city-sponsored housing resource center in the region, opened in August 2008. Trained housing counselors from the Inland Fair Housing and Mediation Board (a HUD-certified, nonprofit housing agency) provide free, confidential default- and foreclosure-prevention counseling services. The Indio Redevelopment Agency provides office space for the Center, as well as funding for facility maintenance and advertising.
The Signs of Success
In the short time since the project was fully implemented, the Indio Police Department has already seen results. Two hundred-fifty properties have been registered in accordance with the new ordinance, resulting in the collection of $41,250 in registration fees. During the last quarter of 2008, the Code Enforcement Team inspected more than 5,000 properties in the city. More than 500 notices were issued on vacant properties, and more than 200 administrative citations (totaling more than $30,000 in fines) were issued to lenders, realtors, and property managers. Even the largest national lenders have begun to actively maintain their foreclosure properties to avoid the administrative citation and fine.
The department has discovered that realtors are a key partner in their success. Realtor- listed homes registered and maintained in accordance with the ordinance are selling faster and at higher prices than bank-sold foreclosures, so there is a strong financial incentive for realtors to work with these otherwise undesirable properties.
The Housing Resource Center has conducted 140 formal counseling sessions and has helped keep 139 families in their homes. It has also received more than 450 phone calls and more than 200 walk-ins from homeowners interested in receiving counseling or foreclosure process information. As a result of this immediate success, the city intends to continue funding the operation of the Center.
The Indio Police Department believes that without these efforts the city would have seen an increase in the number of families displaced from their community, the number of unmaintained vacant homes, and the number of crimes associated with those properties. Based on these experiences, the department suggests that the development of a national foreclosure policy and registry is warranted. Allowing for local governments to obtain accurate information in a timely manner would be a huge first step in helping local law enforcement agencies understand their foreclosure problem. In addition, as Officer Anderson noted, “having accurate information is vital when an officer responds to a call and needs to know who is responsible for the property then and there, not after hours of research.”