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The problems associated with vacant buildings and the costs they create for local governments are well-documented and have been tragically proven on some occasions, as explained below:
Police demand. Vacant buildings are susceptible to illegal activities such as squatters, vandalism, theft, and arson due to a lack of on-site supervision or security.
Fire protection hazards. Thousands of fires break out in vacant structures each year in the US, mostly resulting from arson, resulting in tens of millions in of dollars in property damage. Fires in vacant buildings lead to thousands of firefighter injuries every year and have even led to deaths of firefighters in instances such as Worcester, Massachusetts (1999) and Chicago (2010).
Code enforcement. The lack of supervision associated with vacant buildings often coincides with a lack of maintenance, leading to accumulations of trash, tall grass/weeds, and neglect of building maintenance. The process of identifying and contacting owners requires a disproportionate amount of code enforcement staff time. These buildings also create direct costs for local governments associated with actions such as boarding up, mowing, and demolition.
Local government costs. A 2008 study conducted by Community Research Partners conservatively estimated that annual costs from code enforcement, fire and police protection, and tax loss associated with vacant buildings ranged from $20 per household in Columbus to $200 per household in Dayton and Cleveland. Lost property tax revenues account for 75% of this impact.
Lower property values. Prolonged vacancy creates uncertainty for surrounding property owners and can signal that a neighborhood is on the decline. Lack of adequate maintenance can create eyesores that detract from the desirability of a neighborhood. Studies have shown, at least with residential properties, that properties located on the same block or otherwise within close proximity to an abandoned property are generally reduced by $4,411 to $8,750 (according to the 2008 Community Research Partners study).
Lower tax revenues. Lower property values lead to lower property tax collection. In commercial/ industrial buildings, vacancy means a lost opportunity for income tax generation. Tax delinquency is also often correlated with vacancy. If a property must be demolished due to deferred maintenance, then taxable revenue is reduced even further.
A commercial or industrial building is defined as any structure or part thereof, that is used, or designed to be used, for any private manufacturing, industrial, or commercial business purposes whether or not legally zoned for such use.
Provide proof of general liability insurance covering the building in an amount not less than $1 million.
Provide a plan for securing, rehabilitating, or demolishing the building.
Allow annual interior/exterior inspections to confirm compliance with applicable Property Maintenance, Building and Fire Codes.
Pay a registration fee if required.
Display a placard (available upon request from the City) on the building indicating the potential level of hazard for first responders.
Display a window sign with contact information about the owner, authorized agent, and any individuals responsible for building management.
Renew the registration/fee after each consecutive year of vacancy.
Buildings that are vacant due to fire or extreme weather damage are exempt from registration and fees for a period of 90 days from the date of the fire or extreme weather event.
If a vacant building has a valid building permit for renovation, the building is exempt from registration until the expiration of the longest-running, active building permit.
Government agencies are exempt from registration and fees.
Annual renewal fees (after the first year) may be reduced by 50% if the building has no outstanding notices or orders regarding code violations.
A fee will be refunded if a building is successfully renovated and occupied within a year of fee payment.
The initial registration fee may be waived for up to a year if there is proof the building is being actively marketed for sale or lease.
A copy of the vacant building registration application completed by the purchaser of the property Annual registration or renewal fee, if due.
The escrowed documents and fee shall be forwarded to the Planning and Zoning Department upon the transfer of title. In the event that the transfer of property is completed within 90 days from the end of the calendar year, the annual registration fee shall be applied to the following calendar year.