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Tuesday, October 14, 2008

The San Diego, California suburb of Chula Vista has responded to the recent housing crisis with an aggressive blight control ordinance that compels lenders to maintain the appearance of vacant homes. As foreclosures increase both locally and throughout the United States, the one year old ordinance has become a model for other cities overwhelmed by the problem of abandoned homes that decay into neighborhood eyesores.

Chula Vista city code enforcement manager Doug Leeper told the San Diego Union Tribune that over 300 jurisdictions have contacted his office during the past year with inquiries about the city’s tough local ordinance. Coral Springs, Florida, and California towns Stockton, Santee, Riverside County, and Murietta have all modeled recently enacted anti-blight measures after Chula Vista’s. On Wednesday, 8 October, the Escondido City Council also voted to tighten local measures making lenders more accountable for maintenance of empty homes.

Under the Chula Vista ordinance lenders become legally responsible for upkeep as soon as a notice of mortgage default gets filed on a vacant dwelling, before actual ownership of the dwelling returns to the lender. Leeper regards that as “the cutting-edge part of our ordinance”. Chula Vista also requires prompt registration of vacant homes and applies stiff fines as high as US$1000 per day for failure to maintain a property. Since foreclosed properties are subject to frequent resale between mortgage brokers, city officials enforce the fines by sending notices to every name on title documents and placing a lien on the property, which prevents further resale until outstanding fines have been paid. In the year since the ordinance went into effect the city has applied $850,000 in fines and penalties, of which it has collected $200,000 to date. The city has collected an additional $77,000 in registration fees on vacant homes.

Jolie Houston, an attorney in San Jose, believes “Lenders will respond when it costs them less to maintain the property than to ignore local agency requirements.” Traditionally, local governments have resorted to addressing blight problems on abandoned properties with public funds, mowing overgrown lawns and performing other vital functions, then seeking repayment afterward. Chula Vista has moved that responsibility to an upfront obligation upon lenders.

As one of the fastest growing cities in the United States during recent years, Chula Vista saw 22.6% growth between 2000 and 2006, which brought the city’s population from 173,556 in the 2000 census to an estimated 212,756, according to the U.S. Census Bureau. Chula Vista placed among the nation’s 20 fastest growing cities in 2004. A large proportion of local homes were purchased during the recent housing boom using creative financing options that purchasers did not understand were beyond their means. Average home prices in San Diego County declined by 25% in the last year, which is the steepest drop on record. Many homeowners in the region currently owe more than their homes are worth and confront rising balloon payment mortgages that they had expected to afford by refinancing new equity that either vanished or never materialized. In August 2008, Chula Vista’s eastern 91913 zip code had the highest home mortgage default rate in the county with 154 filings and 94 foreclosures, an increase of 154% over one year previously. Regionally, the county saw 1,979 foreclosures in August.

Professionals from the real estate and mortgage industries object to Chula Vista’s response to the crisis for the additional burdens it places on their struggling finances. Said San Diego real estate agent Marc Carpenter, “that kind of measure will add additional costs to banks that have been hit really hard already and ultimately the cost will be transferred down to consumers and investors.” Yet city councils in many communities have been under pressure to do something about increasing numbers of vacant properties. Concentrations of abandoned and neglected homes can attract vandals who hasten the decline of struggling neighborhoods. Jolie Houston explained that city officials “can’t fix the lending problem, but they can try to prevent neighborhoods from becoming blighted.”

CEO Robert Klein of Safeguard, a property management firm, told the Union Tribune that his industry is having difficulty adapting to the rapidly changing local ordinances. “Every day we discover a new ordinance coming out of somewhere”, he complained. Dustin Hobbs, a spokesman from the California Association of Mortgage Bankers agreed that uneven local ordinances are likely to increase the costs of lending. Hobbs advised that local legislation is unnecessary due to California State Senate Bill 1137, which was recently approved to address blight. Yet according to Houston, the statewide measure falls short because it fails to address upkeep needs during the months between the time when foreclosure begins and when the lender takes title.

Sunday, November 9, 2008

Voters in California, Florida and Arizona voted on Tuesday to ban gay marriage, bringing about a victory for conservatives on a day which did not bring many conservative wins.

Meanwhile, voters in Colorado, South Dakota and California voted on measures which would have restricted abortion in those states. In Massachusetts and Michigan, voters passed measures that loosen marijuana laws. Finally, in the state of Washington a measure was passed that allows physician-assisted suicide.

The California ballot measure, Proposition 8, overturns the recent June ruling by the California State Supreme Court in the case In re Marriage Cases which reversed a 1977 statute passed by the California State Legislature and a 2000 ballot measure, Proposition 22, which also banned same-sex marriage by defining marriage as between a man and a woman. The wording of Proposition 8 is identical to Proposition 22. It was noted that many of the African-Americans and Latinos who cast their votes for Obama, also voted for the measure. The measure passed at 52% to 48%.

Lesbian comedian Ellen DeGeneres noted, “This morning, when it was clear that Proposition 8 had passed in California, I can’t explain the feeling I had. I was saddened beyond belief. Here we just had a giant step toward equality and then on the very next day, we took a giant step away.”

Singer Melissa Etheridge, who is also a lesbian, stated that she would no longer pay taxes due to the passing of Proposition 8, announcing in a blog post, “Okay, so I am taking that to mean I do not have to pay my state taxes because I am not a full citizen.”

Also in California, voters rejected a measure which would require parental notification for a minor to receive an abortion. The measure was rejected with the same percentage as Proposition 8, 52% to 48%. Meanwhile in Colorado, voters rejected a measure that would define life as beginning at conception. While the measure did not specifically mention abortion it would have required legislators and courts to confront legal rights for fetuses – effectively preventing abortion. The measure was defeated in a wide margin, 73% to 27%

In South Dakota, voters also defeated an anti-abortion measure which would have outlawed abortion in all cases except in the case of rape, incest or if the mother’s health was in serious question. If passed, the law would most likely have been challenged as unconstitutional.

In Michigan, voters approved a measure which legalizes medical marijuana. Meanwhile, in Massachusetts, voters approved a ballot question that decriminalizes possession of small amounts of marijuana in which the possession of an ounce or less would be punishable by a $100 fine. The measure will also require minors under the age 18 to participate in and complete a drug awareness program and do community service. Failure to do so, would net the minor a $1,000 fine.

“Tonight’s results represent a sea change. Voters have spectacularly rejected eight years of the most intense government war on marijuana since the days of ‘Reefer Madness,'” said Rob Kampia, executive director of the Marijuana Policy Project. “The people were ahead of the politicians on this issue; they recognize and want a more sensible approach to our marijuana policy,” said Whitney Taylor, the chair of Committee for Sensible Marijuana Policy, which backed the Massachusetts proposition.

Also, in Massachusetts, voters overwhelmingly, in every single Massachusetts city and town, rejected a ballot measure which would have eliminated the state income tax by 2010, the ballot measure was sponsored by the Committee for Small Government, which is headed up by two libertarians, Michael Cloud, a Libertarian Party candidate for U.S. Senate in 2002 and Carla Howell, Libertarian Party candidate for governor in the 2002 Massachusetts gubernatorial election.

The last time the income tax elimination measure was on the ballot was in 2002, where it was defeated, narrowly by 45.3%. This stunned supporters of the income tax, who mounted a fierce campaign against the measure this time warning Massachusetts residents that repealing the income tax would have drastic effects on the state’s finances, leading to cuts in services, education and local aid.

Finally, voters passed a question which bans dog racing in Massachusetts, which will lead to the closure of Massachusetts’ two greyhound racing tracks, Raynham-Taunton Greyhound Park and Wonderland Greyhound Park.

The campaign against dog racing was headed up by the Committee to Protect Dogs and endorsed by GREY2K USA and the American Society for the Prevention of Cruelty to Animals along with other animal protection organizations who claimed that dog racing was inhumane as the dogs were stuffed into cramped cages and endured injuries. The measure was opposed by the park owners including George Carney who owns the Rayham-Taunton park and Charles Sarkis, a restaurateur who owns Wonderland.

“We did it. We did it for the dogs,” said Carey Thiel, executive director of GREY2K USA. “For 75 years, greyhounds in our state have endured terrible confinement and suffered serious injuries. We’re better than that,” Thiel added.

One campaign supporter, Sandy Bigelow noted, “It means everything. We’ve worked so hard for the dogs and they heard us. It feels so good. Oh, God, it feels so good.”

George Carney said of the results, “It’s not a very pleasant thing right now. Some of these people have been here 40 years. Here’s a company that did nothing wrong, paid their federal taxes on time, paid the town on time. The town is going to be a severe loser, and a lot of people here dedicated their life to the company.”

Both sides used emotionally-charged advertisements, the anti-racing side showing “sad-eyed greyhounds,” while the pro-racing side highlighted the workers who would be out of work when the tracks close.

Both measures must now come before the Massachusetts Governor’s Council for approval.

A ballot initiative approved by voters in the north-western state of Washington will make it the second state to permit physician-assisted suicide. Initiative 1000 follows the ten-year-old example of the Death With Dignity Act of neighboring Oregon, and will allow physicians to prescribe a lethal dose of medication for a terminally ill patient to administer themselves. It was approved by a margin of 16%, and the ‘Yes’ campaign outspent the ‘No’ campaign by more than three-to-one. The law comes into effect in 2009.