Who owns an abandoned house?

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.

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Episode Transcript

Speaker 1 (00:01):
Welcome to you stuff you should know from House Stuff
Works dot com. Hey, and welcome to the podcast. My
name is Josh Clark and across from me is Charles
Chuck Bryant. And because of that, because it's the two
of us, uh and Jerry, of course, um, you have

(00:23):
stuff you should know? Okay, yeah, stop protesting us. It's
a sweet little drifecta of people in here. Do my
favorite people in this office? Two of my two favorite
people are in this office, me and Jerry. You're doing

(00:44):
all right? Yeah? Man, I know for a fact that
you're not, Uh, because I have an abandoned house across
from me. Do you really? Yeah, We're gonna work in
some personal details here. Well that's good man, because um,
I feel like if there's anything personal in this world,
it's an empty, unused house. Okay, you know, especially one

(01:04):
that's left in your neighborhood. Isn't that a big like
f you 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 is a real problem.

(01:27):
Two side by side. You may want to run a bulldozer. Well,
there may be a happy ending. Okay, we'll play it
out dramatically over the course of the show. That's good man. Um,
so we should probably set the set the stage for everybody.
It's the early to mid two thousand's sweet. Yeah, the

(01:47):
first decade, early to mid part of the first decade.
I'm in Los Angeles. Yeah, okay, um, and the real
estate boom is in full swing. Everybody's forgotten about the
dot com bubble? What was that? That was a fluke?
You know, Let's start investing in real estate. Will make
it like nineteen twenties Florida. And these prices, sure do

(02:08):
you 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 or five
six houses, and I mean like people, not not companies,
like people who are just flipping it. Then all Ice
gets a show about flipping um real estate, like, there's
flipped this actually, well yeah, okay, it's still it came

(02:30):
out of this and this bubble is just growing and
growing and growing. 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. Bubble
head grown. It was artificial, there was an artificial market,
and everybody just kind of walked away. It was a

(02:51):
truly fascinating it was. It was fascinating and scary, but
also it was like just to watch it. I mean,
we watched it, we chronicled, but argually so the bubble bursts.
And there's a lot of people, those speculators, investors and
ordinary people who took out terrible, terrible loans and over
extending themselves, um oftentimes with the hands of predators. There's

(03:16):
a lot of people to blame. But there were a
lot of houses that suddenly we're not worth what they
had been paid for ye or house flippers that you know,
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

(03:36):
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, and some of those people
were left not with a single family that just got
burned or burn themselves on one house, but like, I've
got six or seven houses now that I'm underwater on

(03:58):
and I'm going to foreclose on all of them or
maybe just leave. And that was enoughtion that a lot
of people took. Here's the thing, a lot of those
people did this under the guise of LLC's and so
they didn't have to file for bankruptcy there. Their LLC
just had to go away. Their liability was limited, exactly,
it was very limited. Um. So there's a lot of

(04:20):
people out there who just walked away from their houses.
And those houses now this is two two nine, um.
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. Um. And actually Detroit is kind of
leading the way and figuring out what to do with

(04:41):
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. So who longs an abandoned house? Well,

(05:02):
we'll get to that, Okay, I want some stats, all right,
two thousand twelve, that's last year, two point three million
homes were foreclosed on nationwide. Compare that to two thousand,
four hundred and seventy thousand homes were foreclosed on. So
it's quite a jump. Um, it looks like things peaked
in two thousand eleven at about three point nine million

(05:23):
homes in that year. Uh. And now we're kind of
back down to like mid two thousand seven levels. Um.
And then I just pulled this today Florida and they
do this like monthly quarterly. Florida is in pretty bad
shape right now. Like forget Detroit. Uh, they lead the
country with UM one out of every one hundred and

(05:43):
four housing units is in foreclosure in Florida. UM. Nevada
is next at one in every one, fifteen, Illinois one
and everyone seven, Ohio one and everyone eighty eight. And
then Georgia one in every two hundred housing units is
being foreclosed on. Yeah, and uh, Florida has I think

(06:04):
four of the top five metropolitan areas in the country
as well for just four closed homes. Yeah, Miami's number one, Orlando, Okalla, Jacksonville,
and then Las Vegas is number four. So what is
a 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.

(06:26):
Detroit probably has more empty houses, especially per capita, than
any other city in in the country. And I think
eighty thousand businesses factories are homes right now. So what
I saw most recently was um, something liked and seventy
two abandoned homes. Well, it probably depends on where engaged

(06:47):
stats um. And that's out of something like three hundred
and seventy thousand in total. Yeah, so something about like
thirty six percent of Detroit's residential spaces are empty, abandoned, yeah, vacant. Yeah.
Like remember the Silver Dome deal, know, the where the

(07:08):
Detroit Lions played since nineteen seventy five. It cost fifty
five million bucks to build it in nineteen and it's
sold in two thousand nine for five hundred and eighty
three thousand. 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

(07:29):
jam there. He's reinvesting in it. Um, that's good. Apparently
it's going to live. But the dude steel like feels
a twenty million dollar deal that fell apart and then
this guyot for half a million bucks. That's all. He's
just some dude. I'll bet he worth Hawaiian shirt. Uh. Yeah,
I don't know what he wears. I would I don't know.
For that much money, I would turn it into like

(07:49):
the biggest house, the studio apartment, and I'll bet you're
a heating built and kill you every winner. Yeah, I
just built small fires the silver domes where I saw
my first rodeo. Really Yeah, well you can probably see
a rodeo there again probably or just livestock kind of
grazing inside. Okay, so hold anament there. I think it's
time for a message break. Uh, and we're back. So

(08:18):
we're talking about the vacant homes. Like, there's a big
difference between foreclosed homes and even like when it's in foreclosures,
there's a lot of different aspects to it. Yeah, they
can stay a foreclosure for years essentially be a vacant home.
You can get your first letter um of an intent
to foreclose. That means your house is in foreclosure. You
can the the company who actually kicked you out could

(08:41):
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 um and the person may still be living in

(09:02):
there under those circumstances. So forth closed doesn't equal vacant.
Well yeah, and it's there's So 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 already even tracked down, all right, who
actually owns this place? Right exactly? So let me give
you an instance. If you um own a home and

(09:26):
the bank says, hey, you're behind on payments, we're gonna
kick you out. Uh, you move out, they foreclosed, uh.
And it comes down to the time when the sheriff's
department holds an auction on the county steps. They steps
to 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

(09:49):
by right right, But that owner may have no idea
because I mean, 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 foreclosed, may say that they don't
technically own it. And the well reason these houses are
hot potatoes is because all this time that property that's

(10:12):
sitting there is accruing taxes yea, 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 gonna
have to pay all those things. So these houses just
sit and eventually the concept of ownership over them fades. Yeah,

(10:35):
that's that's the case with the house across the street
from me. Um, here's the deal. We bought our house
in foreclosure and are now turning it around, or we
decided we're just gonna stay there forever because it's done
some very great things with that. I appreciate that, um.
But across the street is a house has been vacant
since we moved in eight years ago or whatever, and

(10:56):
every couple of months, this lady would come by in
a truck with the dude with the lawmower to cut
the grass. She would sit in a truck and then
they would leave. And that's only action I've ever seen.
They quit doing that. So it's looks like you would
anticipate a house looking has been cared for for at
least a year. It's all overgrown, weeds, plants growing into
the house. The rear of the house is busted out

(11:18):
at the bottom so like people can get in and out,
and supposedly there's been like vagrants sleeping in there. I
haven't verified this, but that's like you know, the neighborhood rumors.
So it's a derrelict house. And one of the neighbors
I think filed which we'll talk about with the county
to like get something done. And apparently there are some
back taxes OWD. So this lady may be washing her
hands of it. Just the very fact that there's a

(11:39):
house built on a piece of property that somebody owns
means that there's taxes accruing. And now that your neighbor
called the called code services and co code enforcement, that
means that they're going to come out and start writing
tickets assessments against the house, like for the law not
being cut, for being some sort of NUIs sense, like
maybe there's fired Codevilla la whatever, water problems, and there's

(12:02):
like rats and stuff. Now like you if your house floods,
you have to buy 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 you um kind of hit the nail on

(12:25):
the head with mentioning that vagrants are possibly living in there.
Because the one of the biggest problems, rather than you know,
vermin or flooding or you know, the mosquitoes that develop
and in long tall, uncut grass, is the fact that
abandoned houses tend to attract crime. Yeah, uh in a

(12:47):
big way. UM. What do we have some stats here
from Queens, New York between two thousand and six and
two thousand eight. UM, In two thousand eight, neighborhoods and
Queens that had high foreclosure rates at an average of
four D twenty four more burglaries, robberies, and murders and
auto thefts than in areas with lower foreclosure rates. That's

(13:08):
up a hundred and fifty in two years. And that's
in Queens, which is transitional in parts but not a
bad neighborhood at all. Uh. And apparently in Detroit, in
what was Mitt Romney's old childhood home, like really nice neighborhood.
Apparently crime increases in these neighborhoods as well, at about
the same rate, not aggregate number of crimes, but at

(13:31):
the same percentage increase. I think right, that's a big um.
That's a big finding. Um. Apparently they raised Mitt Romney's
birthplace birthplace home in Detroit. But the um, there's this
whole idea. UM it's called broken windows theory. And these
two guys named um oh, George Kelling and James Wilson

(13:54):
came up with this idea that UM, if you police
small off like if you, if you, if you like
really throw the pickpockets in jail, and like write tickets
to teenagers who are like playing their music too loud,
and make sure that the broken windows and like a
house are repaired. Like you kind of sustained the sense

(14:18):
of order, and from order, you know, comes the abidment
of law supposedly, so it trickles up pretty much. Yeah,
it is this paying attention to the small stuff supposedly
has an effect on the big stuff. It makes total sense, um,
But studies have kind of found, like there's not a
lot of actual quantitative evidence backing this up necessarily, but

(14:41):
it creates this mindset um they think that possibly, like
everyone points to Times Square, so like the police commissioner
who came in with Giuliani and like cleaned up Times Square,
he was in the broken windows. I can't even imagine now,
I never went to Time Square and it was like
that I saw the tail end of it. I can't

(15:02):
imagine what it must have been like. If you watch
basket Case, he's walking around Times Square, It's like that's
Times Square, that's Times Squire's crazy. You know, where's the
Disney store exactly? Um, but so the commissioner was into
broken windows policing, and they very firmly believe like that's
what cleaned up Times Square. A lot of people say, well,

(15:24):
maybe it was the end of the crack epidemic. Maybe
that cleaned up Times Square. Maybe it was lead got
out of our our brains. Remember that one, Remember that
the real criminal element lead from Mother Jones is awesome
article that ties together the decline and crime in New
York and elsewhere to the decline and the prevalence of

(15:45):
lead in like our air in the world. Um So,
there's a lot of other things that it could be.
But there's this idea that if you if you fix
the windows in an abandoned home, the crime will decrease.
But like you said, they find the same amount of
crime in nice areas or you know, already low income areas. Yeah,

(16:07):
I think it's the same increase in crime rate because
I don't think there's no way it could be the
same amount of crime right once the house is vacated there,
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 gonna see increasing crime. Yeah,
and that kind of supports that broken windows theory. Yeah,
is that true, though, I just have a hard time
believing that, Um, percentage wise, it could probably be the same. Yeah,

(16:30):
because think about it. If you have, like, um, 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. At my point, if
you have, like, if you have like ten burglaries in
an area and the a new abandoned house opens up,

(16:53):
ten more burglaries happen, it's a increase. If you have
one burglary in an area and open abandoned how opens
up in a high income here you have one, that's
another increase. I can buy that statistics, you know. Yeah,
I hear you, But it does make sense. Yeah. Yeah.
The reason why is because an abandoned home attracts people
who normally, um might not have a place to congregate

(17:15):
and carry out illegal activity. Yeah, do drugs squat I'm
not gonna judge squatters, but a right uh, so what
can you do. We realize it's a blade 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 actually, actually
the house next to this one, I do feel really

(17:38):
bad because his 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, you know, sheet of paper tape to
the front door. It's a good out. I don't know
what it said. I guess I'm not sure what the
deal is, but you can get this guy. You should
tell him that he may still own that house. I

(18:00):
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 in somethings forth clothes on your well. 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 was being ky. I think he totally is,

(18:21):
but he said maybe someone sure is and I said great.
I guess he was trying to like, good to meet you,
a weirdo, sniff me off the case or something, and
sniff off the case. There's never been like an older adage,
or it's actually not old. He's made it up. But um, yeah,

(18:42):
he was trying to get me off his case, I think.
And so I was like, dude, please buy this house
and fix it up. But that's what we're after here. Yeah,
he's going to hit you up for a subsidy. Now
I don't know, played all your cards. So what do
you do. Let's say that guy had never showed up
and you had not one but to abandoned homes in
the neighborhoods. Well, you could do what I think the
next door neighbor to the house did, which was called

(19:03):
the county and here they called it a Darryl 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

(19:24):
then they'll start writing tickets against it, and there'll be
more and more leans 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

(19:46):
who owns the place um. Some counties is becoming such
a problem that some counties are setting up land trusts, yeah,
where like 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 gonna have to pay those taxes in addition to

(20:08):
to purchasing it. So even if the county takes possession
that somebody is still gonna have to pay those back
taxes usually, right, Yeah, So the county might take like
five percent 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, um. Maybe they'll use it to subsidize

(20:31):
a community development group that wants to turn it into
a community center. There's a lot of like new ideas
that people 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.
And I'm not saying no, just move all the homeless

(20:51):
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 gonna go
across the street and mow the lawn. You could be sued. Yeah,
you could be sued. If you hurt yourself, you could
be arrested for trespassing. If you hurt yourself, you could
be sued, you could be liable for insurance on the property.

(21:13):
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, and 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,

(21:34):
but it's all petty. I haven't done that. Just don't
break your ankle on the property that threatened to do that, Well,
don't because that'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. 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. If that thing disappears,

(21:55):
it's not my faulty. Even though it's in your backyard.
To some planet, it would definitely not be in my
right yard. Um, you got anything else? Um? Yeah, Well,
we talked about Detroit Um 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 uh utilize about

(22:18):
a hundred million dollars and 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 gonna use
some of that money and they planned to UH finance
the demolition of about four thousand structures. And that's just
the Michigan State Housing Development Authority. There's another effort going

(22:41):
on that is on track to demolish ten thousand abandoned
houses by the end of the first full term. Would
be significant. Yeah, that would be fourteen out of eighty
to nine thousand. Well plus also the three thousand that
Detroit already so close to twenty and then they're about
a quarter of the way there. There was the I
don't know if you read the article I sent you,

(23:02):
um from Dayton, there was this lady. She she found
she was kicked out of her house. Um, the foreclosure
process was never followed through on, so she actually still
owned the place and she got in touch with her
She somehow found out I guess like maybe a code
enforcement officer contacted or about back taxes or whatever. So

(23:22):
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 you know she found her way back
to her house after like five years, which is pretty cool.

(23:43):
It's a nice silver lining to shut up about the rent. Right.
Happy you got your house back? Yeah, uh, I got
nothing else, okay. Uh. If you want to learn more
about Abandon Holmes, you can type that word those words
into uh the sir bar stuff works dot com. You
can also type in sniff me off the case. See

(24:06):
what happens. Man. I'm curious about that one I just
made up. I'm gonna officially like, how do you claim that? Can?
You 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 iron clad legally alright.
Um so I think I said iron clad, which means

(24:28):
it's time for a message break and now it's listening
to mail time. Great. I'm gonna call this grunge beef.
Remember we talked a little bit about Sound Garden, sound
Garden and Pearl Jam and all those bands and oh
how they didn't like each other. Yeah, apparently someone's gotta
beef with that Paul Hilt of Waukisha, Wisconsin. Guys, I'm

(24:54):
a longtime fan and extremely important bone to pick regarding
the Trees podcast, He's gonna 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,
tribute band to late Andrew Wood, lead singer of Mother

(25:14):
Love Bone, consisted of the members of Bolk Pearl Jam
songs Eddie Vetter with Chris Cornell on vocals, although Eddie
Better did sing in their most popular song, that one
about Stephen Brett Yeah hunder strike Um. Chris Cornell was
also briefly a roommate of one of the members of
Pearl Jam in the pre crunge era of early nineties Seattle.

(25:35):
I forget exactly which one at the moment. Additionally, Matt Cameron,
the original drummer for Sound Garden, has been Pearl Jams
drummer for the last fifteen years. I did this while
I'm at it. Members of Alison Chains and Pearl Jam
also collaborated in the so called supergroup Mike McCready p
j's Pearl James guitarist and Lane Staley were both part
of Mad Season Remember Them, which is recently released a

(25:58):
deluxe remaster box set of their only studio album. Above,
it was Nirvana and Pearl Jan that had the so
called rivalry in the nineties. Josh. The rivalry mostly consisted
on the part of the fans 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

(26:20):
excuse the grunge ERAa nerd um of this email. But
this is a topic that it's 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 area,
I highly recommend the Cameron Crow produced and directed documentary
p J twenty for calling the twenty year history the pajamas.
Oh wait, Pearl Jam. If the history doesn't interest you

(26:43):
at all, there's still lots of good music I have
been made gazing that. Thanks for all the great work,
even if it prevents me from doing my own work.
Paul hilt Uh while Kesha, Wisconsin, 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
fawing this little history lesson. It was Nirvana. I forgot

(27:06):
about Nirvana and Pearl Jam having a little, a little friction.
Let me see how that ended. Yeah, Pearl Jam got
a documentary made about their twenty years and Nirvanna went away.
Nirvana went on becoming cold band forever. That's right. Uh,
let's see if you want to give us a little
history lesson. We love those things. They're awesome. Like seriously,
please send us on. This isn't just me coming up

(27:27):
with an easy sign off. Um, you can tweet to us.
It would be a pretty short history lesson. But you
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That's our Twitter handle. You can post on our Facebook page,
which is Stuff you Should Know. You can send us
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(27:50):
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