Stuff You Should Know - Who owns an abandoned house?

Episode Date: July 18, 2013

Ever since the real estate bubble in the U.S. burst in 2008, American cities have had to deal with a substantial uptick in abandoned houses. Faced with hundreds of thousands more than usual, new questions have arisen pertaining to who owns a house the owner has walked away from and just what to do with it. Learn more about your ad-choices at https://www.iheartpodcastnetwork.comSee omnystudio.com/listener for privacy information.

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And listen, even the shortest trip may turn into an unforgettable journey of a lifetime. So go on, find out where to next with Toyota. Let's go places. Start your journey at toyota.com slash let's go places. Welcome to Stuff You Should Know from HowStuffWorks.com. Hey, and welcome to the podcast. My name is Josh Clark and across from me is Charles W. Chuck Bryant. And because of that, because it's the two of us and Jerry, of course, you have Stuff

You Should Know. Okay? Yeah. Stop protesting us. This is a sweet little trifecta of people in here. Right. Two of my favorite people in this office. Two of my two favorite people.

There you go. Are in this office. Me and Jerry. You doing alright? Yeah, man. I know for a fact that you're not. Because I have an abandoned house across from me. Do you really?

Yeah. We're going to work in some personal details here. Well, that's good, man, because I feel like if there's anything personal in this world, it's an empty, unused house. Okay. You know? Yeah. You've actually won this left in your neighborhood.

Yeah. Isn't that a big, like, FU to the rest of the people who live there? Yeah. I've actually got two side-by-side now. Oh, that's delightful. Yeah. That's great, man, because as you already understand, and now I understand from researching this, and our listeners will soon understand, that's a real problem.

Yeah. Just one's a real problem. Two side-by-side, you may want to rent a bulldozer. Well, there may be a happy ending. Okay, good. We'll talk about it dramatically over the course of the show. That's good, man. So we should probably set the stage for everybody.

Okay. It's the early to mid-2000s. Sweet. Yeah, the first decade, early to mid-part of the first decade. I'm in Los Angeles. Yeah, okay. And the real estate boom is in full swing. Everybody's forgotten about the dot-com bubble.

Yeah. What was that? That was a fluke, you know? Yeah. Let's start investing in real estate. We'll make it like 1920s Florida. And these prices, sure do seem exorbitant, but hey, I'm sure we'll make our money back, and this bubble just keeps growing and growing and growing.

And people are buying like four, five, six houses, and I mean like people, not companies like people who are just flipping it, but then all ICE gets a show about flipping real estate. Like there's flip this house. That's new, actually. Yeah. Okay, but still, it came out of this. Yeah.

The bubble's just growing and growing and growing, and then all of a sudden it just pops, and it popped because everybody figured out that the prices for the houses were more than they were worth. Yeah. And bubble had grown. It was artificial. There was an artificial market, and everybody just kind of walked away. Yeah, it was a truly fascinating thing.

It was fascinating and scary, but also it was like just to watch it. I mean, we watched it. We chronicled it largely. Oh, yeah. So the bubble bursts, and there's a lot of people, those speculators, investors, and ordinary people who took out terrible, terrible loans and overextended themselves, oftentimes with the hands of predators, there's a lot of people to blame, but there were a lot of houses that suddenly were not worth what they had been paid for.

Yeah, or house flippers that maybe said, my job, I kind of hate. I can flip a house. People are getting rich doing this. Right, and not only that, I can actually, the access to credit is so easy right now. I can afford six of them and take this kind of blighted area and fix these six houses up and just create a whole new neighborhood out of it. Yeah, and some of those people were left not with a single family that just got burned or burned themselves on one house, but I've got six or seven houses now that I'm underwater

on, and I'm going to foreclose on all of them, or maybe just leave. And that was an option that a lot of people took. Here's the thing, a lot of those people did this under the guise of LLCs. Oh, sure. And so they didn't have to file for bankruptcy, their LLC just had to go away. Yeah, their liability was limited. Exactly, it was very limited. So there's a lot of people out there who just walked away from their houses, and those houses

now, this was 2007, 2008, 2009, those houses now are just sitting there abandoned in cities all over the country. Of course, Detroit has it worse, but there's a lot of other cities that have it pretty bad too. And actually Detroit is kind of leading the way in figuring out what to do with these houses because right now they're sitting there, even as the market recovers, the houses that are left over that are abandoned are in really bad shape. So they're the ones that aren't going anywhere ever.

And now we all have to figure out as a society what to do with these things. That's right. So who owns an abandoned house? Well, we'll get to that. Okay, I want some stats. All right, 2012, that's last year. 2.3 million homes were foreclosed on nationwide. Compare that to 2,470,000 homes were foreclosed on.

So it's quite a jump. It looks like things peaked in 2011 at about 3.9 million homes in that year. And now we're kind of back down to like mid-2007 levels. And then I just pulled this today, Florida, and they do this like monthly, quarterly. Florida's in pretty bad shape right now. Like forget Detroit. They lead the country with one out of every 104 housing units is in foreclosure in Florida. Nevada is next at one in every 115, Illinois, one in every 147, Ohio, one in every 188,

and then Georgia, one in every 200 housing units is being foreclosed on. And Florida has, I think, four of the top five metropolitan areas in the country as well. For just foreclosed homes. Yeah. Miami's number one. Orlando, Ocala, Jacksonville, and then Las Vegas is number four. So Florida's in bad shape, although we are going to be talking about Detroit because this article talked about Detroit.

Well, there's a big difference between, and this is why Detroit comes up, Detroit probably has more empty houses, especially per capita than any other city in the country. Yeah. I think 80,000 businesses, factories, or homes right now. So what I saw most recently was something like 99,072 abandoned homes. Well, it probably depends on where you get your stats. Okay. And that's out of something like 370,000 in total.

Yeah. So something about like 36% of Detroit's residential spaces are empty, abandoned. Yeah. Vacant. Yeah. Like remember the Silver Dome deal? No. Where the Detroit Lions played since 1975.

Right. And it sold $25 million to build it in 1975, and it sold in 2009 for $583,000. No way. Yeah. What do they do with it? The dude is fixing it up apparently, and they have had like a friendly soccer match there and a monster truck jam there. Wow.

He's reinvesting in it. That's good. So the Silver Dome lives. Apparently, it's going to live, but the dude got a steal, like it was a $20 million deal that fell apart, and then this guy bought it for half a million bucks. That's all. He's just some dude. I'll bet he wears Hawaiian shirts.

Yeah. I don't know what he wears. I don't know. For that much money, I would turn it into like the biggest house, the biggest studio apartment. Man, I bet you're a heating bill. Kill you every winter. Yeah.

That's true. I just built small fires. The Silver Dome's where I saw my first rodeo. Oh, really? Yeah. Well, you could probably see a rodeo there again. Probably. Or just livestock kind of grazing inside.

Yeah. Okay. I think it's time for a message break. And we're back. So we're talking about the vacant homes, like there's a big difference between four closed homes and even like when it's in foreclosures, there's a lot of different aspects to it. Yeah. They can stay in foreclosure for years and essentially be a vacant home.

You can get your first letter of an intent to foreclose. That means your house is in foreclosure. The company who actually kicked you out could be bidding on it on the courthouse steps. That's the end of foreclosure. And there's a lot of stuff in between. And there's a lot of foreclosures that just don't go all the way through. So the house is technically still in foreclosure even though it hasn't been repossessed by the bank and the person may still be living in there under those circumstances.

So four closed doesn't equal vacant. Well, yeah. And it's such a mess right now. Sometimes it's hard to even get anyone to claim ownership of some of these houses. Like they don't know which, because banks would sell the loans to other institutions and sometimes it's hard to even track down who actually owns this place. Right, exactly. So let me give you an instance.

If you own a home and the bank says, hey, you're behind on payments, we're going to kick you out. You move out, they foreclose, and it comes down to the time when the sheriff's department holds an auction on the county steps, the steps of the county courthouse, and the bank doesn't show up to bid on it and nobody does. That original owner who is out of the house still owns that house by right. But that owner may have no idea, because you don't necessarily follow up on the house that you were kicked out of five years ago.

So they might not even know, and they've moved and they might not know that they own the house. The bank, even if they did foreclose, may say that they don't technically own it. And the whole reason these houses are hot potatoes is because all this time, that property that's sitting there is accruing taxes. And eventually, it may be worth less than the amount of taxes and leans against it, so that the people who actually own it don't want to claim possession of it, because they're going to have to pay all those things.

So these houses just sit, and eventually, the concept of ownership over them fades. Yeah, that's the case with the house across the street for me. Here's the deal. We bought our house in foreclosure and are now turning it around over. We decided we're just going to stay there forever, because- We've done some very great things with the house. I appreciate that. But across the street is a house that's been vacant since we moved in eight years ago or

whatever. And every couple of months, this lady would come by in a truck with a dude with a lawnmower to cut the grass. She would sit in a truck, and then they would leave, and that's the only action I've ever seen. Right. They quit doing that. So it looks like you would anticipate a house looking as it's been cared for for at

least a year. Right. There's been weeds, plants growing into the house. The rear of the house is busted out at the bottom, so people can get in and out. And supposedly, there's been vagrant sleeping in there. I haven't verified this, but that's the neighborhood rumors. So it's a derelict house. And one of the neighbors, I think, filed, which we'll talk about with the county to get something

done. And apparently, there are some back taxes owed. So this lady may be washing her hands of it. That's the very fact that there's a house built on a piece of property that somebody owns means that there's taxes accruing. And now that your neighbor called code services or code enforcement, that means that they're going to come out and start writing tickets assessments against the house, like for the lawn not being cut, for being some sort of nuisance.

Maybe there's fire code violations now or whatever. Well, there's vermin. It's got water problems, and there's like rats and stuff now. If you're a house flood, you have to by law clear it out, and if you don't, they assess against you. And so all these things just add up to the amount of money that somebody would have to pay to gain full and free possession of this house, which makes it even more unattractive. So it's like this vicious cycle that's going on.

Pretty much. And you kind of hit the nail on the head with mentioning that vagrants are possibly living in there because one of the biggest problems rather than vermin or flooding or the mosquitoes that develop in long, tall, uncut grass is the fact that abandoned houses tend to attract crime. Yeah. In a big way. What do we have some stats here from Queens, New York between 2006 and 2008?

In 2008, neighborhoods in Queens that had high foreclosure rates had an average of 424 more burglaries, robberies, and murders and auto thefts than in areas with lower foreclosure rates. It's up 150% in two years. And that's in Queens, which is transitional in parts, but not a bad neighborhood at all. Right. And apparently in Detroit, in what was Mitt Romney's old childhood home, like a really nice neighborhood, apparently crime increases in these neighborhoods as well at about the

same rate. Not aggregate number of crimes, but at the same percentage increase, I think. Right. That's a big finding. Apparently, they raised Mitt Romney's birthplace home in Detroit. But there's this whole idea. It's called broken windows theory. These two guys named George Kelling and James Wilson came up with this idea that if you police

small stuff, if you really throw the pickpockets in jail and write tickets to teenagers who are playing their music too loud and make sure that the broken windows and a house are repaired, you kind of sustain the sense of order. And from order comes the abidement of law, supposedly. So it trickles up. Pretty much. Yeah. It is.

It's paying attention to the small stuff supposedly has an effect on the big stuff. I can see that. It makes total sense. But studies have kind of found like there's not a lot of actual quantitative evidence backing this up necessarily. But it creates this mindset. They think that possibly everyone points to Times Square. So the police commissioner who came in with Giuliani and cleaned up Times Square, he was

in the broken windows. All the awesome things at Times Square. I can't even imagine now. I never went to Times Square when it was like that. I saw the tail end of it. I can't imagine what it must have been like. If you watch basket case, he's walking around Times Square and it's like, that's Times Square? That's Times Square.

It's crazy. I know. It's a Disney story. Exactly. But so the commissioner was in the broken windows policing and they very firmly believe like that's what cleaned up Times Square. A lot of people say, well, maybe it was the end of the crack epidemic. Maybe that cleaned up Times Square.

Maybe it was lead got out of our brains. Remember that one? No, I don't remember that one. The real criminal element lead from Mother Jones, this awesome article that ties together the decline in crime in New York and elsewhere to the decline in the prevalence of lead in like our air. In the world. Yeah.

Wow. So there's a lot of other things that it could be, but there's this idea that if you fix the windows in an abandoned home, crime will decrease. But like you said, they find the same amount of crime in nice areas or already low income areas. Yeah. I think it's the same increase in crime rates. It could be the same amount of crime.

Right. Once a house is vacated there. Yeah. Yeah. So like even if you live in a good neighborhood, you're still going to see like if that half a million dollar home is vacant, you're going to see increase in crime. Yeah. And that kind of supports that broken windows theory.

Yeah. Is that true though? I just have a hard time believing that. Percentage wise, it could probably be the same. Yeah. Because think about it. If you have like, I'm just trying to picture my brother's neighborhood and like if there were a couple of empty homes there, like there wouldn't be like rapes and murders and

drug deals going down there. Well, think about this. If you, if you, he lives in a nice neighborhood, if you have like, if you have like 10 burglaries in an area and a new abandoned house opens up, 10 more burglaries happen. It's 100% increase. Yeah. That's true. If you have one burglary in an area and an abandoned house opens up in a high income area,

you have one. That's another 100% increase. I can buy that. Statistics, you know? Yeah. I hear you. But it does make sense. Percentage wise, because an abandoned home attracts people who normally might not have

a place to congregate and carry out illegal activity. Yeah. Do drugs, squat? Sure. I'm not going to judge squatters, but. Right. So what can you do? We realize it's a blight on the neighborhood.

Crime goes up. It's no good for anyone. We feel sorry for, you know, if it is a family that couldn't afford their house. It's very sad. And that's actually the house next to this one. I do feel really bad because this family lived there for a long time. The guy was a trucker and out of nowhere, one week I looked up and noticed the truck wasn't in the driveway and no furniture was in the house.

And there was like a, you know, sheet of paper taped to the front door. To get out. I don't know what it said. I guess I'm not sure what the deal is, but. If you can get to that guy, you should tell him that he may still own that house. I don't know if he owned it though, to be honest. He may have been a renter. Oh, well, that's another thing.

Like, yeah, if you're renting and something's foreclosed on your SOL, yeah, but this lady I know did own the house and possibly good news. Just yesterday I saw two dudes checking it out and of course I hustle out there and was like, Hey dude, are you going to buy this house? And he, he was being coy. I think he totally is, but he said, maybe someone sure is. And I said, great. I guess he was trying to like, good to meet your weirdos sniff me off the case or something.

Sniff you off the case. There's never been like an older adage or an older phrase. It's actually not old. It's brand new. I just made it up. But um, yeah, he was trying to get me off his case, I think. Okay. And so I was like, dude, please buy this house and fix it up.

That's what we're after here. Yeah. He's going to hitch out for a subsidy now. I don't know. He's played all your cards. So what do you do? Let's say that guy had never showed up and you had not one, but two abandoned homes in the neighborhood.

So what I think the next door neighbor to that house did, which was called the county and here they called it a derelict house. I guess, um, you would just call the code enforcement officer and explain the situation and they will, you know, six months later, probably start to do some investigating as to the back taxes who owns it, what like state it's in. Yeah. Inspections, that kind of thing. Exactly.

And then they'll start writing tickets against it and there'll be more and more leans. Yeah. Try to find the owner. Um, and like we said, that can get very, very difficult. And then even when you find the owner, it may be an LLC that disbanded and no longer has any legal obligation to, to claim ownership of that place. Um, and at that point, when it becomes unclear as to who owns the place, um, some counties is becoming such a problem that some counties are setting up land trusts.

Oh, really? Yeah. So they'll take a certain percentage of property taxes, especially ones that are like back taxes that are paid. Like when that guy across the street buys that house, he's going to have to pay those taxes in addition to purchasing it. Yeah. So even if the county takes possession, that somebody's still going to have to pay those

back taxes usually, right? Yeah. So the county might take like 5% of those and set it aside into this land trust for, for houses that no one will ever claim and they'll either use it to raise the place, to rehabilitate the place. Yeah. Um, maybe they'll use it to subsidize a community development group that wants to turn it into a community center.

Right. There's a lot of like new ideas that people are, are, you know, coming up with to handle abandoned properties because it's becoming such a problem. Well, it's definitely hard to wrap your head around as an American, there being that many homeless people and that many abandoned homes. Right. So they know, just move all the homeless people in there because it's way more complicated than that obviously, but it's definitely kind of weird to think about.

Well, yeah. Well, I mean, it's, it's so complicated. Like even if you said, you know what I'm tired of this, I'm going to go across the street and mow the lawn. Yeah. You could be sued. Oh, really? Yeah.

You could be sued. If you hurt yourself, you could be arrested for trespassing. Yeah. If you hurt yourself, you could be sued. You could be liable for insurance on the property. There's a lot of like it's extremely complex and it's extremely intricate and then throw into the mix that you might not know who the owner is. Yeah.

Yeah. Nobody wants to touch this place. What if I snuck over in the dead of night to steal an Azalea bush? What does the law say about that? Probably trespassing and theft. Okay. But it's all petty. I haven't done that.

Just don't break your ankle on the property. I've threatened to do that. Well, don't because they'll be bad for you. It's really, it's like the nicest plant on that and there's only one nice plan on the property. Azalea? I feel like that may be a trophy for having to look at this place. Yeah, maybe.

We'll see. Yeah. I don't know. That thing disappears. It's not my fault. Okay. That's all I can say. Even though it's in your backyard.

To some point in your front yard. It would definitely not be my front yard. What? You got anything else? Yeah. Well, we talked about Detroit to open the show and the fact that they have a lot of houses that they are raising. That's how they're taking care of their problem.

Just yesterday, the city has decided to utilize about $100 million in unused federal funds originally intended to prevent foreclosures to quote aggressively address blight. That's what the governor, Rick Snyder said yesterday and they're going to use some of that money and they plan to finance a demolition of about 4,000 structures. And that's just the Michigan State Housing Development Authority. There's another effort going on that is on track to demolish 10,000 abandoned houses by the end of the first full term. That'd be significant.

Yeah. That would be 14,000 out of 80,000 to 90,000. Well plus also the 3,000 that Detroit already demolished. Yeah. So close to 20,000. Yeah. They're about a quarter of the way there. There was a, I don't know if you read the article I sent you from Dayton.

There was this lady. Yeah, I did. She found, she was kicked out of her house, the foreclosure process was never followed through on. So she actually still owned the place. And she got in touch with her, somehow found out, I guess like maybe a code enforcement officer contacted her about back taxes or whatever. So she got in touch with her bank and then basically renegotiated her loan and after

five years was able to move back into her house. Wow. The only thing was she was kicking herself like, I just spent five years paying rent when I could have been paying down this mortgage, which sucks. But yeah, you know, she found her way back to her house after like five years, which is pretty cool. Yeah. It's a nice silver lining.

Yeah. Tell her to shut up about the rent. Be happy you got your house back. Yeah. And I got nothing else. Okay. If you want to learn more about abandoned homes, you can type that word, those words, into the search bar at stuffworks.com.

You can also type in sniff me off the case, see what happens. Man, I'm curious about that one. I just made up, I'm going to officially like, how do you claim that? Can I copyright that somehow? Um, yeah, just write it down on a letter and mail it to yourself. Mail it to you. It's, it's an ironclad legally. All right.

Great. Um, so I think I said ironclad, which means it's time for a message break. You've been dreaming about this baby your entire life, a small, beautiful bundle of joy that deserves only the best. Everything about your baby is one of a kind, from the pregnancy to the birth, from whether they're a napper or a baby who doesn't want to miss a thing. At Caden Lane, we want you to make everything as unique as your bundle of joy. Even that essential hospital overnight bag, we're the one stop shop for all things baby,

mommy and family. Celebrate your perfect baby, CadenLane.com. It's been said that a day of traveling will bring a basket full of learning. Fill your basket to the brim in Mississippi with family friendly experiences like the new Mississippi Aquarium, the recently expanded Hattiesburg Zoo, the Tupelo Buffalo Park & Zoo and sports and literary attractions too. Find your sense of wander today at visitmississipi.org family fun, Mississippi, Wanderers Welcome. And now it's listener mail time.

Great. I'm going to call this grunge beef. Remember we talked a little bit about Sound Garden and Pearl Jam and all those fans and oh how they didn't like each other. Yeah, apparently someone's got a beef with that. Paul Hilt of Waukesha, Wisconsin. Guys, I'm a long time fan and extremely important bone to pick regarding the trees podcast. He's going to sniff us off the case.

I feel I need to let you know that the members of Pearl Jam and Sound Garden and their respective fans have always had a friendly relationship. You may recall that the short-lived temple of the dog, remember them? Yeah. A tribute band to late Andrew Wood, lead singer of Mother Love Bone, consisted of the members of both Pearl Jam, songs Eddie Better, with Chris Cornell on vocals, although Eddie Better did sing in their most popular song. That one about stealing bread?

Yeah, hunger strike. Chris Cornell was also briefly a roommate of one of the members of Pearl Jam in the pre-crunge era of early 90s Seattle. I forget exactly which one at the moment. Additionally, Matt Cameron, the original drummer for Sound Garden, has been Pearl Jam's drummer for the last 15 years. I did this. While I'm at it, members of Alice and Chains and Pearl Jam also collaborated in a so-called

supergroup, Mike McCready, PJ's, Pearl Jam's guitarist, and Lane Staley were both part of Mad Season. Remember them? No. Which has recently released a deluxe remastered box set of their only studio album above. It was Nirvana in Pearl Jam that had the so-called rivalry in the 90s, Josh. The rivalry mostly consisted on the part of the fans and was inspired by many of Kurt Cobain's jabs at Pearl Jam for being a, quote, corporate rock band.

Take that, Pearl Jam. Hopefully you'll excuse the grunge era nerdom of this email, but this is a topic that hits very close to my rapidly fading youth, and it's Friday, and I don't want to work. If you enjoy the history of this era, I highly recommend the Cameron Crow Produce and Directed Documentary PJ20 for calling the 20-year history of pajamas. No, wait, Pearl Jam. If the history doesn't interest you at all, there's still lots of good music. I have been meaning to see that.

Thanks for all the great work, even if it prevents me from doing my own work. Paul Hilt, Wild Kesha, Wisconsin. It's made up. I think so. Hey, thank you, Paul Hilt. We appreciate the lesson. It's nice. We were just kidding, but thank you.

I'm glad it's on this little history lesson. It was Nirvana versus Pearl Jam. I forgot about Nirvana and Pearl Jam having a little friction. Let me see how that ended. Yeah. Pearl Jam got a documentary made about their 20 years, and Nirvana went away. Nirvana went on to become a cult band forever. That's right.

Let's see. If you want to give us a little history lesson, we love those things. They're awesome. Seriously, please send us some. This isn't just me coming up with an easy sign-off. You can tweet to us. It would be a pretty short history lesson, but you can send us something to SYSK Podcast, that's our Twitter handle.

You can post on our Facebook page, which is Stuff You Should Know. You can send us an email to stuffpodcastatdiscovery.com. You can hang out with us on our home on the web, our website. It's called stuffyoushouldknow.com. For more on this and thousands of other topics, visit HowStuffWorks.com. For food lovers, there's no place on earth like Mississippi, where sweet, spicy, and smoky flavors satisfy your spirits. Wherever you wander, plan today at visitmississippi.org slash dining.

Mississippi, Wanderers, welcome. The war on drugs is the excuse our government uses to get away with absolutely insane stuff. Stuff that'll piss you off. The cops. Are they just like looting? Are they just like pillaging? They just have way better names for what they call, like what we would call a jack move or being robbed, they call civil answer for it.

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