Holding Investors Accountable in Oakland
Following the foreclosure crisis, Oakland faced a serious problem of an increasing number of vacant buildings. Vacant properties, particularly if not well-maintained, can negatively affect the safety and quality of life in a neighborhood and the resulting lower property values reduce the wealth of remaining homeowners. The acquisition of foreclosed properties by investors who either keep the property vacant to sell later and/or are irresponsible about property upkeep can produce similarly harmful neighborhood effects. In Oakland, investors from outside of the city acquired huge amounts of property (the top two investors accumulated nearly 500 properties), and altered the landscape of ownership in low-income communities of color.
The Alliance of Californians for Community Empowerment (ACCE) Action, a grassroots member-led organization mobilizing around community issues including housing justice, recognized that the foreclosure crisis and subsequent property purchasing was negatively affecting communities. ACCE set out to address the numerous blighted and abandoned properties and ensure that banks and investors paid for any public costs created by problem properties.
However, ACCE needed data to fully expose neighborhood changes to elected officials and the media; together with Oakland NNIP Partner Urban Strategies Council they began assessing the extent to which banks and outside investors had acquired properties and whether they were investing in the physical maintenance, upkeep, and rehabilitation after acquisition. To accomplish this, Urban Strategies Council first had to examine administrative property records to untangle the complex network of ownership entities that held controlling interests in these properties.
Urban Strategies Council estimated that over 10,500 completed foreclosures occurred between 2007 and 2011. Their report Who Owns Your Neighborhood? showed that 42% of foreclosures were acquired by investors and only ten of the thirty largest investors were based in Oakland. Bought by banks or outside investors, these properties were not returning to the hands of neighborhood residents. 93% of these properties purchased were in low-income communities. The map below highlights the concentration of foreclosures in Oakland.
Urban Strategies Council’s analysis went beyond identifying the trail of purchasing. They conducted a property inspection survey that linked transaction history with a rating on the level of rehabilitation work completed once acquired. Urban Strategies Council found that many of the investors failed to make physical improvements, contributing to the degradation of properties, a health and safety concern.
Urban Strategies Council produced maps and analysis, which equipped ACCE with a data-based picture of the ownership landscape to bring to the Oakland City Council. ACCE organized a campaign around the issue, which resulted in new City of Oakland legislation requiring investors register their properties with the City. This ordinance allowed the City to better track ownership and maintenance and allowed ACCE to hold absentee property owners accountable. Access to the data gave them information they needed to ensure the city was following up on enforcement of fines associated with vacant properties. After implementing the ordinance, nearly $2 million was collected in fines from banks; according to ACCE, a portion of those funds went to foreclosure prevention programming to aid financially-troubled homeowners and protect the wealth in the community.
The partnership created a space for both ACCE and Urban Strategies Council to weave together effective local advocacy efforts and neighborhood data to affect municipal policy and establish the, still existent, City of Oakland Foreclosed & Defaulted Residential Properties Registration, Inspection & Maintenance Program.
For a more complete case study of this experience, see ...[read more]
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