SAN DIEGO

The Revitalization of Vacant Properties San Diego, California Case Study

Acknowledgements ICMA’s Vacant Properties Research Team expresses its sincere appreciation to the many people who provided guidance throughout this project and worked on these case studies.

We would particularly like to thank the local government staffs, community development groups, citizens, developers, and other stakeholders from Portland, Richmond and San Diego for hosting the Research Team and for contributing their insights and advice. The Research Team also recognizes the preliminary contributions made by former ICMA staff, Kendra Briechle and Noah Simon in starting these three case studies and the research report prepared by three graduate students (now alumni) from William and Mary’s Jefferson School of Public Policy Ashley Colvin, Heather Phillips and Ian Fergusson.

Research Team Joseph Schilling, Director, Community and Economic Development, ICMA Author of Introductory Chapter: The Revitalization of Vacant Properties—Where Broken Windows Meet Smart Growth Co-author of the Richmond Case Study Author of the San Diego Case Study Naomi Friedman, Smart Growth Consultant Author of the Portland Case Study Co-author of the Richmond Case Study The Research Team would also like to thank ICMA’s Smart Growth and Production staff for assistance in pulling together resources, editing, production, lay out, and dissemination. In particular, we thank: Nadejda Mishkovsky, Dan Emerine, Sean Tolliver, Brad Boese and Dharma Pachner. The Team would also like to thank Danielle Arigoni and Lisa Nisensen, of the U.S. Environmental Protection Agency, for their thoughtful review of this text.

This report was developed under a cooperative agreement between ICMA and the U.S. Environmental Protection Agency, Cooperative Agreement No. CR 825 609 01 2. The opinions in these case studies are solely those of the authors, and do not necessarily reflect the view of the U.S. Environmental Protection Agency. All information contained herein is based on the research and expertise of the ICMA Research and Smart Growth Teams unless otherwise noted.

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San Diego, California Behind every vacant property, there is a story. The trick is to find that story and address the underlying issues.

– Diane Silva-Martinez, head deputy city attorney

Abstract of this Case History The San Diego case study illustrates how code enforcement can stabilize the impacts of vacant properties. San Diego’s strength lies in its ability to apply a variety of strategies (i.e., a mix of “carrots” and “sticks”) to encourage private property owners to rehabilitate their substandard and vacant residential properties. The city has gained a wealth of experience in handling many types of vacant-property owners, from the typical slumlord to the old and indigent. This case study further highlights the benefits of building strong relationships with community groups, nonprofit building and construction organizations, and the real estate industry. San Diego’s efforts also provide a good model of internal coordination among city departments.

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Program Highlights San Diego’s vacant-properties initiatives have served to: x Appoint a vacant-properties coordinator within the neighborhood code compliance department, to facilitate the abatement and rehabilitation of vacant properties. x Establish a vacant-property resource team to help coordinate roles and resources and to solve problems across city departments and agencies. x Develop a close relationship between the vacant-properties coordinator and the city attorney’s code enforcement unit (CEU), which provides legal expertise in the rewriting of ordinances and policies and in using proper code enforcement remedies.

Regular meetings were held with the CEU to brainstorm creative solutions and strategies for problematic properties. x Revise the vacant-properties abatement ordinance to require property owners to submit a statement of intent and a time line to the city within 30 days of a structure’s being boarded. x Develop partnerships with community groups, developers, realtors, investors, business improvement associations, nonprofit groups, contractors, the media, and property managers, to help identify problem properties and give assistance in rehabilitation and demolition. x Offer assistance to property owners in renovating, demolishing (when appropriate), or selling their boarded buildings. Assistance took the form of a self-help manual, a matching grants program, referrals about financial resources, real estate and contractor guidance, referrals to the county public administrator or pro-bono attorneys for title and probate assistance, and volunteer demolition and rehabilitation expertise.

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San Diego, California

Background and Demographics

Photo: Joe Schilling

San Diego is considered one of the most desirable American cities in which to live. With its temperate climate and Mediterranean geography, San Diego is now home to nearly 1.25 million residents.1 A year-round vacation spot, San Diego is regularly ranked in the top 10 most popular destinations in the continental United States for international visitors; in 1998, total revenue from visitors topped $4.7 billion. As a result, service industries continue to grow, especially in such areas as dining, lodging, shopping and recreational services. The military—and now “homeland security”—have played and still play a major role in San Diego’s economy, as the city is home to six major Navy and Marine installations. Over the past 15 years the city has also emerged as a leader in the new biotech industry.

Given its ideal climate and dynamic job market, San Diego will undoubtedly see a steady migration of new residents heading its way. Yet San Diego’s quality of life has already been affected by the impacts of sprawl. According to the 1998 Sierra Club Sprawl Report, the San Diego region has one of the fastest-growing traffic problems in the United States.2 The number of hours that San Diego residents wasted in traffic jumped 117 percent between 1982 and 1994, one of the highest increases in the country. The Sierra Club also notes that San Diego’s sprawling growth is damaging some of the area’s 1

According to the 2000 census, residents of Latino/Hispanic heritage compose over 25 percent of the city’s population, with more than 15 percent Asian-Americans. Only 9 percent of San Diego’s population is African American.

2 We recognize that a sprawl index is not the ideal measurement of current and potential adverse impacts, but it does provide some general information that can form a baseline for comparison. For example, San Diego now ranks 66th in the Sierra Club Sprawl index, down from 59th in 1990. The Sierra Club further estimates that nearly 94 percent of the San Diego region’s population lived in urbanized areas as of 1999.

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world-class habitat and biodiversity.3 As for the immediate future, the San Diego Association of Governments estimates that more than 450,000 new residents will be living in the city in 20 years, which is on par with the population growth for the last 20 years, but the city has less than 12 percent of its land left for development.4 To accommodate these new residents, San Diego will need to recycle its vacant land and underused residential properties and buildings.

3

San Diego ranks among the top 10 regions on earth in its biodiversity, rich with more species per unit area than almost anywhere else in the world. However, “San Diego shares with the Big Island of Hawaii the dubious distinction of having the highest number of endangered species nationwide.� (See the Club’s Web site at http://www.sierraclub.org/sprawl/report98/san_diego.asp).

4 According to the 2000 census, San Diego had nearly 470,000 housing units and only 4 percent or 19,000 of these housing units were vacant. This number did not include 5,000 vacation/recreational units. The proportion of owner-occupied versus rental units was about 50 percent. Note that the census takes a much broader and more cursory view of vacant housing units than do these other ICMA case studies. http://factfinder.census.gov The Revitalization of Vacant Properties

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San Diego’s Experience: The Ebb and Flow of Code Enforcement Strategies and Approaches Compared with other jurisdictions, San Diego may have fewer vacant properties, but the problems and the impacts are the same. Boarded buildings host unwelcome activities such as transiency, graffiti, drug dealing, and prostitution. These public nuisances diminish property values and can adversely affect entire neighborhoods. While San Diego has now stabilized its rate of abandonment, the problems persist today, with recurring structures and repeating property owner/offenders.

The Vacant-Property Problems Photo: Joe Schilling

San Diego is a perfect laboratory for experimenting with the “brokenwindow theory.” Crime and disorder often spread from one vacant building and infest other, marginal sites in cities’ older neighborhoods.

Classic examples in San Diego have included abandoned single-family houses and small-scale apartment buildings that have become neighborhood nuisances. Most of these derelict structures are located within San Diego’s original inner-ring suburbs, whose residents include a large number of lower-income households and diverse ethnic groups. Among these neighborhoods are City Heights, Barrio Logan, Golden Hills, Sherman Heights, Grant Hill, Logan Heights, Memorial, Stockton, Webster, Shelltown, and Southcrest.

Boarded single-family houses and apartment buildings were an especially acute problem during the early 1990s, with the collapse of the savings-and-loan industry. As a result of this debacle, many financial institutions outside San Diego (several under the auspices of the Resolution Trust Corporation) became the absentee owners and managers of substandard residential properties. A few notorious property speculators and slumlords also infiltrated San Diego’s rental-housing market, seeking to “flip” properties for a profit. As California began its drift into economic recession in 1992, the growing problems with vacant properties made it difficult for San Diego’s code enforcement forces to keep up.5

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San Diego was one of the first California cities to create a special code enforcement unit (CEU) within its city attorney’s office and then to consolidate its building, housing, and zoning inspectors into a neighborhood code compliance department (NCCD). Later, NCCD came under the umbrella of the San Diego Police Department Business Center, helping to integrate vacant properties abatement with community-oriented policing strategies.

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The Vacant-Properties Task Force: The Preliminary Vision of Carrots and Sticks Faced with the blight of abandoned homes and boarded buildings, in 1993 the city manager established a task force to design an action plan for addressing vacant properties. For more than a year, the task force assessed existing code enforcement processes, examined programs and ordinances from other jurisdictions, and brainstormed possible solutions. Representatives from lending institutions, title insurance companies, community groups, and real estate and apartment owner associations joined the task force, along with city staff from code compliance, the city attorney’s office, housing, economic development, and the planning departments. The task force held several community meetings before making a set of recommendations to the city council’s public services and safety committee.

The recommendations set forth a two-pronged approach that used both carrots and sticks, along with strong partnerships with the real estate industry and community developers.

The task force recognized that traditional code enforcement strategies alone would likely prove ineffective and that market forces often contributed to these problems. A more comprehensive approach that included both public and private sector partners would be necessary to combat the blight caused by vacant properties over the long term. (See the vacant-properties task force’s recommendations in the Appendix.)

Further, the task force identified California cities’ lack of legal authority to mandate rehabilitation, unless a property caused a public nuisance or was declared substantially substandard under the state’s housing law. If a property owner kept a building clean and secure, there was little the city could do to require the owner to rehabilitate and reoccupy.

The task force did explore changing the state law to strengthen municipal powers over vacant properties. It worked with a San Diego state legislator, who sat on the California Assembly Housing Committee, to convene a special district hearing on vacant properties.

Information and ideas were exchanged about giving cities greater powers. As a result of this hearing, two pieces of legislation were enacted that now streamline the tax foreclosure process and limit tax deductions for vacant properties: x Amendments to the Revenue and Taxation Code, Section 3691, reduced the time that had to pass before the county could foreclose on properties whose property taxes had not been paid. The period was reduced from five years to three years, giving the vacant-properties coordinator another tool to use. x The Revenue and Taxation Code’s Sections 17274 and 24436.5 were amended so that tax deductions could be denied to dwellings that were left unoccupied or abandoned for at least 90 days. This amendment was consistent with the “stick” approach, to motivate owners to rehabilitate their properties.

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The Vacant-Properties Action Plan For the next year, faced with budget shortfalls, San Diego struggled with how to implement the task force’s comprehensive vision. In March 1995, the city hired a local land use consultant to work with it and with the task force to implement long-term solutions. Together, this collective group undertook an intensive process to address issues and interests that had mired down earlier efforts. The group continued to engage a variety of stakeholders (city, private sector, and community) to understand the scope of the problem and to devise a profile of vacant properties and their owners. The consultant and task force spent the next nine months doing the following tasks: x Conducting an inventory of boarded buildings within the city, x Examining title reports for information on liens and ownership patterns, x Creating a customized database to profile the problem, x Researching relevant financial resources and compiling a self-help manual for property owners, x Talking with other cities to learn about their programs, ordinances, and procedures, x Meeting with all of the key stakeholders in- and outside city hall throughout the process.

Based on the task force’s original vision, the consultant proposed this dual strategy.

Carrots The city should classify a new city staff position to help property owners consider options and implement solutions; develop a self-help manual for property owners; provide $150,000 in Enterprise Community matching-grant funds for rehabilitation; and offer information on a host of resources (e.g., financial help, real estate agents, contractors, pro-bono legal help from private attorneys, conservatorships, and volunteer demolition/ rehabilitation efforts). In addition the city created its own vacant-properties resource team, led by the neighborhood code compliance department (NCCD) and the city attorney’s code enforcement unit (CEU) to review complex cases on a quarterly basis and to brainstorm solutions.

Sticks San Diego should revise its administrative abatement ordinance to require a property owner to file a statement of intent, a plan, and a time line within 30 days after boarding any structure. The statement must describe the owner’s diligent, good-faith efforts to rehabilitate, such as resolving title problems, applying for a loan, or listing the property for sale. Owners who failed to respond or who did nothing could incur a quarterly civil penalty of $250, and/or face a misdemeanor criminal charge for failure to file a statement of intent.

In May 1996, after a year of research, analysis, and consultation, the task force essentially adopted the consultant’s proposed strategies—including a mix of carrots and sticks—to motivate property owners to renovate or sell their boarded buildings.

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Implementing the Vision and the Plan (Phase One): The Vacant-Properties Coordinator and Abatement Ordinance

By May of 1996, the San Diego City Council had endorsed the strategy and passed amendments to its abatement ordinance. The ordinance created a formal administrative procedure to notify property owners legally and to demand that they clean and secure their vacant buildings. If owners failed to take appropriate action within the specified time, city crews could board and secure the structures and assess the costs against the property. The new amendments strengthened this process by requiring owners to file a statement of intent that set forth a timetable and a rehabilitation plan for the property. The amendments also imposed a $250 quarterly fine for failure to file the statement and/or make progress on the rehabilitation. (For details, see San Diego Municipal Code, Section 54.0300 in the Appendix.)

Within the next three months, the director of the NCCD hired the first vacant-properties coordinator to spearhead the city’s efforts. As originally envisioned, the coordinator was charged with a variety of tasks: (1) identifying vacant properties throughout the city; (2) maintaining a list or database of properties; (3) administering the city’s abatement ordinance to clean and secure vacant properties; (4) coordinating efforts among city departments (code compliance, police, city attorneys office, etc.); (5) communicating regularly with community groups, the real estate industry and financial institutions; (6) performing liaison tasks with the city’s vacant-properties task force.

From April 1995 through June 1997, the coordinator inventoried more than 400 vacant and boarded single-family, multifamily, and commercial structures. NCCD then generated a basic database to track various features, including property characteristics, ownership information, financial encumbrances, tax delinquencies, statements of intent, and length of time in the city’s inventory.

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Preliminary Results (April 1995—June 1997) x More than half of the original 400 properties inventoried (approximately 233) were rehabilitated. One hundred of these buildings had been boarded up for 5 years or more. x More than 300 owners of boarded properties were asked to submit statements of intent, and most responded positively. Only 32 properties were subjected to the $250 penalty. x More than 85 owners were assisted by the coordinator in developing voluntary solutions to rehabilitating their properties. x NCCD, HUD’s regional office, and the city’s housing commission worked together to establish a $150,000 matching-grant rehabilitation program for owners of vacant properties within San Diego’s designated Enterprise Zone areas.6 In total, 15 houses were rehabilitated through this initiative.

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City Heights, Sherman Heights, Grant Hill, Memorial, Stockton, Webster, Logan Heights, Chollas View, Golden Hills, Mountain View, Mount Hope, Oak Park, Barrio Logan, and Centre City East.

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San Diego, California

Continuing the Momentum (Phase Two): Getting the Right VacantProperties Coordinator San Diego soon discovered that the overall success of its program depended heavily on the skills of the vacant-properties coordinator. The first two coordinators served about 18 months total. Both did a good job of identifying the properties, compiling information, and working well with other city departments. They essentially got the program running.

However, inspection and administration of the ordinance were not the only responsibilities envisioned for the coordinator. This position demanded a broader understanding of the problem and its long-term solutions.

Hiring and maintaining qualified staff are constant challenges for local government managers. And nowhere is this more critical than in the areas of code enforcement and neighborhood revitalization. Such positions demand a special knowledge of the city’s abatement ordinances, and the development and permitting processes for rehabilitating dilapidated and vacant structures. A general understanding of housing policy, along with a familiarity with general real estate and lending practices, is also extremely helpful.

More important, city staff must build strong relationships with community groups and representatives from the building, housing development, and real estate professions.

In November of 1999 the city hired Norma Medina as its third vacant-properties coordinator—it had found the right person for the right position. Medina came to the city with an array of public and private sector development experience. She had earned a B.A. in environmental design from San Diego State University and had initially worked for a nonprofit group that helped artists obtain city approvals for public art projects. Medina had also worked as a project manager for a private development firm, so she was very familiar with what it takes to get city permits and approvals. While she had spent little time on code enforcement in her previous jobs, she was a student of San Diego’s vacantproperties ordinance, carefully analyzing its provisions and breaking down each task into a coordinated work plan.

Her first priority was to reestablish relationships and build new partnerships. Several community groups felt that the program had lost momentum through its staff turnover.

Within several months Medina had reassessed the vacant properties list, obtaining new information and ensuring that no properties had “fallen through the cracks.”

Medina forged strong links with the police department. San Diego is divided into eight police service areas that loosely follow the boundaries of the city’s council districts. As part of the city’s community-oriented policing strategy, each service area holds monthly “partnership meetings” with representatives from NCCD and the city attorney’s CEU. Including the vacant-properties coordinator at these meetings was a simple way for the police to identify problematic properties within their areas and make to official referrals, so that Medina could start the formal abatement and notice processes under the city’s new ordinance.

Medina also moved quickly to reestablish regular communications with the relevant community planning and volunteer groups in those neighborhoods with the worst

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problems of dilapidated housing and strip commercial buildings. Because she attended community meetings and shared information about the status of different vacant properties, Medina’s outreach efforts became essential to rebuilding trust and confidence in the city’s program for vacant properties.

Given her previous experience with the local building and planning permit processes, Medina enjoys a high level of credibility with many vacant-property owners. She can provide an honest assessment of what it might take to draw up plans, pull a permit, and actually do rehabilitation. As part of her duties, she must assess whether the property owner’s preliminary ideas are reasonable. Does the owner have the financial resources and/or sufficient knowledge to do the work within the time frame that he or she has promised in the statement of intent?

Working in tandem with one building inspector, Medina generally compiles a list of current code violations and problems that will require correction before a property can be reoccupied. While a savvy owner with some remodeling or development expertise might obtain the necessary financing to rehabilitate a building, many do not have enough knowledge and may also lack the initiative to complete the work and follow the building code. In some instances, the property owners might be elderly or live out of town. They may have recently inherited their properties, which are still going through probate court.

In these early meetings with the owners, Medina provides a reality check as to what the actual rehabilitation might require (e.g., costs and time frame for the permit process, and other processes). By spending time working with owners on their rehabilitation plans, Medina gets a good indication of their “true intent” about the properties.

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Winning a California Code Enforcement Incentive Grant (Phase Three) In February 2001, San Diego was among the first cities to receive a California Code Enforcement Incentive Grant. The grant of $395,900 will fund a three-year property rehabilitation program designed to improve code enforcement efforts in the communities of Grant Hill, Memorial, and Stockton. The California State Housing and Community Development Department (HCD), Division of Codes and Standards will administer this grant program.

San Diego’s efforts will focus on developing new techniques to: (1) preserve existing housing stock through more timely code enforcement interventions; (2) prevent the loss of housing units through closure or demolition; and (3) address long-term nuisance properties more effectively. San Diego’s three target communities contain a significant number of older housing units and lower-income households, in addition to a higher ratio of occupants per unit in deteriorating structures. San Diego will use the grant dollars to fund additional staff for both the neighborhood code compliance department and the city attorney’s office.

From a pool of 35 applicants, San Diego was among four other California cities awarded the preliminary round of HCD Code Enforcement Grants. Assembly Bill 2867 had established the Code Enforcement Incentive Program to address substandard housing conditions and severely deteriorated housing units. The legislature recognized the need for timely code enforcement actions to prevent such units from becoming uninhabitable and vacant. The Code Enforcement Program makes matching grants available to cities and counties on a competitive basis.

The main components of San Diego’s grant program are: x Assigning a dedicated code enforcement team, with staff from the city attorney’s CEU and the NCCD, to the three target neighborhoods. x Identifying and citing owners for violations of the state’s substandard housing law. x Developing and circulating written information to the community and property owners about code enforcement and property rehabilitation. Resources comprise: a property maintenance guide, a rehabilitation resources guide, and other information pertaining to owner and tenant responsibilities and duties. x Providing technical assistance to owners and tenants with their rehabilitation projects. x Organizing year-round community cleanup, enhancement and educational activities. x Increasing the number of prosecutions that target repeat offenders with properties that remain unabated for extended periods of time. x Updating policies and procedures regarding substandard housing conditions, vacant properties, and nuisance abatement approaches.

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San Diego, California

Process and Players: Dissecting San Diego’s Administrative Abatement Ordinance and Procedures Cities need strong abatement ordinances and effective code enforcement programs to stabilize sites and to abate the short-term problems caused by vacant properties. Good ordinances and procedures ensure that a city has sufficient legal authority to take appropriate abatement actions. Having a responsive abatement process also sends property owners a message about the seriousness of the problem, underlines the city’s commitment to protecting public safety, and enhances the city’s credibility with the community.

San Diego’s abatement infrastructure (ordinance and staffing) serves as an excellent model for other cities to emulate. What follows is a more detailed discussion of the abatement ordinance and process that highlights a number of practical considerations. For San Diego, the key to effective implementation has been the high level of cooperation among the vacant-properties coordinator and other city departments, such as the police, planners, and building inspectors, and the close partnership with the city attorney’s CEU. Step 1: Define vacant properties; identify and inventory them.

Photo: Joe Schilling

The San Diego Municipal Code generally defines “vacant properties” as any structures or buildings that: (1) are unoccupied or occupied by unauthorized persons, and (2) are unsecured or boarded. Based on the Uniform Code for the Abatement of Hazardous Structures, this definition gives city staff and owners’ guidance on the types of properties and their condition. While the definition is broad enough to include commercial and industrial buildings, San Diego mainly targets single- and multifamily residential structures. Vacant and abandoned residential buildings tend to attract more attention from community groups, members of the city council, and the media.

The preliminary challenge in implementing abatement ordinances is determining whether a property’s conditions satisfy the ordinance’s criteria for being vacant and abandoned. Here, the coordinator works closely with the city attorney’s CEU, especially on the more complex cases. The CEU’s managing attorney offers guidance on available legal remedies, while its two litigation investigators assist the coordinator in locating hard-to- find owners.

With San Diego’s neighborhood code compliance department (NCCD) now under the auspices of the San Diego Police Departments Business Center, both the coordinator and the The Revitalization of Vacant Properties

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city attorney have quickly seen the benefits of working collaboratively with the police in dealing with neighborhood eyesores. As part of the city’s community-oriented policing (COPs) initiative, regular meetings are now held among prosecutors, code inspectors, the vacant-properties coordinator, and the police. Law enforcement officers who confront these problem properties on their beat can now: (1) bring cases to these monthly meetings to discuss, or (2) contact the prosecutor or coordinator directly for assistance. In either case, the police officer walks away from these meetings with a game plan for compliance.

The coordinator also works with the police department’s nuisance property response team in two designated police service areas, with the citywide drug abatement response team (DART), and with community relations officers throughout the city. Such a close relationship with law enforcement definitely helps stabilize the criminal activity on the site, so the coordinator can assess the condition of the property and determine the feasibility of rehabilitation.

Beyond law enforcement, the coordinator and prosecutor both rely heavily on regular meetings with community groups to identify vacant properties in their neighborhoods, to respond directly to complaints, and to accept enforcement cases. Among these groups are the planning department’s community planning committees. San Diego has more than 30 officially recognized community planning committees that advise the planning department on new development proposals and other issues related to city planning and the built environment. Several of the planning committees focus more on urban revitalization and have become actively engaged in the abatement of vacant properties.

Another challenge is tracking properties throughout the city during the entire vacantproperties process. Currently, the coordinator maintains a general database that includes more than 150 properties. Some of these properties are new to the list, while others are going through different stages of the formal abatement process.

Step 2: Develop a profile of the owner, assess the owner’s ability and willingness to voluntarily abate the public nuisance(s) and rehabilitate the structure.

The coordinator, with help from other city departments, must now uncover the real story behind an owner’s neglect of a property. Key facts may include whether the owner has other properties within the county and the conditions of these buildings. Perhaps, the owner is a land speculator who flips properties within a short period of time? Does the owner operate a residential rental-property business? And if so, has he or she decided to minimize repairs to maximize short-term profits? (This is a typical strategy for most slumlords.)

Is the real owner still alive? If not, was the property ever legally transferred to the appropriate relatives or parties through a probate proceeding? When the owner eventually claims that he or she intends to rehabilitate and reoccupy the property, does that owner have the financial and/or physical ability to rehabilitate it?

Whether the property owner can or wants to rehabilitate the property depends on the scope, cost, and type of repairs. The coordinator must quickly assess the degree of The Revitalization of Vacant Properties

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dilapidation on the building’s systems—electrical, mechanical, plumbing, and structural—to determine the complexity of the rehabilitation work, including its cost and the potential building and zoning permits needed. A city building inspector, zoning investigator, and structural engineer provide their expertise in determining the general scope of the work.

By working closely with owners, the coordinator gets a good idea of their intentions and of their abilities to follow through with their plans. The coordinator does not make any decisions for an owner. She merely outlines the possible options of what can be done with the structure, providing lists of resources and mapping out a preliminary rehabilitation or work plan in simple terms.

Ultimately, the owner must take immediate good-faith steps to avoid formal code enforcement actions by the city. Possible steps may be contacting lenders and contractors, distributing an estate through probate, listing a property for sale, initiating the building permit process, transferring the property to a more capable and willing owner (often a relative), donating the property to a nonprofit institution, and/or hiring a property management company.

Step 3: Select the most appropriate course of action to stabilize the site or neighborhood.

At these early stages, the vacant-properties coordinator essentially guides the owner in the appropriate direction, based on the owner’s preliminary intention and time frame.

Once the owner and coordinator have agreed upon a clear action plan and time line for rehabilitation, the coordinator carefully monitors the owner’s progress and requires the filing of a written statement of intent, per the city abatement ordinance.

San Diego must maintain a delicate balance between its potential carrots and sticks. If the owner continues to make timely progress with rehabilitation, the city may do nothing more than require the formal statement of intent. However, if the owner cannot be found or fails to complete the repairs, the city may take abatement action to keep the property secure and assess its costs against the property. Whatever action the city takes must be done within certain legal parameters.

While following these steps mandated by the city’s administrative abatement ordinance, the coordinator relies on the advice and counsel of the managing attorney for the CEU. Together, they discuss potential enforcement strategies for individual cases while brainstorming about possible housing assistance for elderly and indigent property owners.

The CEU represents the coordinator in administrative abatement proceedings and assists in the review and drafting of appropriate legislative amendments to state laws and local ordinances. The CEU’s managing attorney also pulls together the different city departments by conducting trainings on topics such as procedural due process, noticing requirements, and search-and-seizures.

During regular monthly meetings, the coordinator and managing attorney tackle some of the unusual issues that can arise, such as squatting by transients and other unauthorized occupants, criminal activity at the site, or interference by one of multiple owners in the The Revitalization of Vacant Properties

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administrative abatement process. The managing attorney affords guidance throughout the process and helps by obtaining inspection warrants, injunctions, and, if needed, court orders for immediate abatement.

A Team Effort to Resolve a Complex Case The property owner’s daughter was involved with prostitution and drug activity at a vacant structure. The daughter claimed to be the owner and denied access to the police.

The true owner was notified and tried to comply, but the daughter and her friends threatened to hurt her.

The coordinator, working with the police department and the CEU, advised the owner to obtain a restraining order to prevent the daughter from occupying the structure and further vandalizing it. The owner also gave the police written permission to remove unauthorized occupants from the building. The owner voluntarily cleaned and secured the property, but the police had to protect her. The daughter was eventually arrested as part of this process. When the daughter was released from jail, however, she went back to the structure.

From the city’s perspective, it had given the owner the opportunity to “clean and secure” the first time and had provided her with assistance to do so. The coordinator had followed the abatement process by giving the owner proper notice and requiring a statement of intent. When the daughter returned to the property, the city had to take immediate action to administratively abate the open structure and recover its costs. Because it is the owner’s responsibility to maintain control of the structure at all times, particularly with recurring nuisances, an administrative hearing officer ordered the owner to pay all of the city’s abatement costs. Now, the property owner constantly monitors the site and has begun rehabilitation of the structure.

Step 4: Address the Special Challenges under San Diego’s Administrative Abatement Process.

San Diego’s abatement system requires a significant commitment of staff and resources to stabilize vacant properties. Other cities can learn many practical lessons from San Diego’s experience and easily adapt them to their own communities. However, San Diego itself continues to evaluate and fine-tune its administrative abatement process and ordinance. Here are a few of the challenges it has identified to improve its vacant properties efforts:

How can the city effectively use the statement of intent requirement to encourage owners to rehabilitate their properties?

A few sophisticated and recalcitrant owners quickly learned how to manipulate the general building permit process as a way to delay meaningful rehabilitation while staying in compliance with the statement of intent. They merely filed a statement of intent and applied for a building permit but did nothing else. In San Diego, building permits remain valid for an initial period of 12 months before they require an extension. The owner would then file for a permit extension that could last several more months but still would The Revitalization of Vacant Properties

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do little, if any, rehabilitation work.

Photo: Joe Schilling

During the early days of the abatement ordinance, NCCD and the building inspection department did not closely coordinate their efforts. Now field staff for building inspection carefully examine requests for extensions and closely monitor the actual work to ensure that it has been done. Staff members also work more closely with the vacant-properties coordinator and keep her better informed.

When should the city administratively abate the nuisance (clean and secure the building) and assess the costs against the property?

San Diego has a strong policy of covering securing vacant properties to stabilize a site and a community from a building’s adverse impacts. As long as the city has provided proper legal notice to the owner(s) (and usually continued to work with the owner to voluntarily secure), then if the owner still chooses not to comply promptly, the city itself must abate the property to protect public safety and then recover its costs. In some situations, the city takes immediate action to administratively clean and secure the property because the site poses serious dangers to the public, especially where it may become an “attractive nuisance” to neighborhood children. In such cases, the city has little choice but to abate. As long as the city follows the administrative process, it can generally clean and secure the site within two weeks of the date of the initial notice.

Despite this strong policy, San Diego must also ensure that it has adequate resources to pay the abatement costs. Currently, a city contractor does the administrative abatement work when the owner fails or refuses to secure the vacant structure. NCCD has an Abatement Superfund that gets financed yearly from different cost recovery sources; the fund amount may range from $200,000 to $400,000. In fiscal year 2001, the NCCD spent $31,000 for overall nuisance abatement including the cleaning and securing of vacant properties. In the current fiscal year, NCCD has already spent over $25,000 on abatements.

Once the city contractor has completed the abatement, total or even partial recovery of these administrative abatement costs may take years. Much depends on the fiscal stability of the owner and the property. Under the abatement ordinance, the city could eventually trigger a county-tax sale of the property to recover its costs on the grounds of a delinquent tax lien. However, this action requires cooperation with the county tax assessor’s office and, according to state law, cannot happen until the lien has matured.

San Diego has successfully supported a change in state law that decreases the time the

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county must wait before it can foreclose on these nuisance abatement liens, from five years to three years.

When should the prosecutor file a judicial abatement action?

In certain complex cases, it may be more effective for the CEU to file a court action seeking a temporary restraining order and preliminary injunction against the owner to abate the nuisances on the property. Instead of going the administrative abatement route, the city attorney has filed judicial abatement actions in the following types of cases: (1) complex title problems and/or disputes over a title; (2) significant criminal activity, with which stay-away orders might help; (3) dilapidation problems that demand aggressive rehabilitation plans or perhaps even receivership; (4) instances in which owners have multiple properties and the court orders the owner(s) to transfer or cease from acquiring properties; and (5) instances in which the same property continues vacant and unsecured for a long period of time.

When should the city demolish structures?

San Diego’s policy is to seek demolition only as the last resort. Given the growing demand for affordable housing, San Diego follows the requirements of the state housing law, which only permits a governmental entity to demolish residential buildings when the damage extends beyond 75 percent of the entire structure. Consequently, the city must rely on a city engineer or other expert to declare that the building meets this standard and is therefore “structurally unsafe.�

In some cases, the owner hires a structural expert and may choose to demolish because the costs for rehabilitation are significantly greater than those of new construction. When the structure is a continuous public nuisance and the owner chooses to voluntarily abate by demolition, the city has little authority to stop this action. Yet voluntary razing of sound structures in San Diego is very rare, as demolition costs are also high for most property owners.

What happens when the owner seeks an administrative appeal of the abatement notice and order?

According to the ordinance, the owner has a reasonable but short period in which to file a formal appeal of the administrative notice and order. San Diego uses a network of private attorneys who act as administrative hearing officers to conduct the appeal hearings. The city has a special ordinance that governs these and other administrative hearings, along with a set of policies for the city manager. These same rules also govern cost recovery hearings.

In the past 18 months, only three owners have chosen to appeal their abatement notices.

None of these appeals was successful, and the city was allowed to abate immediately in each case. While the city has yet to lose an administrative hearing to recover its costs, it must diligently follow the procedures laid out in the abatement ordinance: 1. Verify and document that the violation(s) observed is (are) a threat to the health and safety of the public.

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2. Give proper notice.

3. Verify and document that the owner did not comply.

4. Document the abatement actions taken by the city, with the costs incurred.

Step 5: Work with Owners to Rehabilitate and Revitalize the Site.

The coordinator’s primary responsibility is to eliminate the nuisance conditions on the site that affect the specific neighborhood. In many respects, the coordinator facilitates actions and negotiations between a property owner and relevant city departments. Equally important, the coordinator also advises the property owner about possible long-term solutions that could lead to the rehabilitation of the property. Given these multiple roles, the coordinator must clearly communicate these different perspectives as she and the owner move through San Diego’s abatement process.

This coordinator/owner relationship remains constant, regardless of whether the owner is cooperative or uncooperative. The coordinator generally assists owners when they propose a workable rehabilitation plan and show some effort. She must closely monitor an owner’s good-faith and diligent effort and be ready to take appropriate enforcement action if necessary. From the very beginning, the coordinator explains to owners that the city’s primary interest is to help them put their properties back into productive use. Her efforts may be unwelcome. In some cases, owners choose not to work with the coordinator if they feel that the city or the coordinator has a special interest in the property. Sometimes, owners may believe that neighbors or community groups are pressuring the city to take the property away from them.

The coordinator provides a wide variety of information that includes resources available from different sectors of the industry, profit and nonprofit. The owner, however, must make the final decision. If an owner chooses to transfer the property or sell, the owner has to demonstrate to the coordinator that he or she is actually in the process of selling or transferring. Again, the coordinator merely verifies the owner’s efforts and does not get involved in the transaction.

The same is true for those parties that want to make their services available as resources for owners of vacant properties, such as contractors, financial institutions, real estate agents and investors, developers, and architects. All information provided by the city must be distributed equally and consistently. Also, the city must ensure that it discloses only information that is on public record, or it must obtain the owner’s permission.

City and Public Resources The coordinator relies on a number of public agencies and city departments to provide potential resources for rehabilitation. Each of these entities administers programs that can offer the property owner funding, and sometimes technical assistance, depending on the nature of the situation. x Housing Commission: Administers the public housing programs of the city of San Diego, along with federal resources from HUD.

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x Enterprise Community Program: Provides property owners, both residential and commercial, in a designated area with various state incentives to encourage neighborhood revitalization and redevelopment. x Redevelopment Agency: Administers the redevelopment areas and projects of the city of San Diego, exercising special redevelopment powers and incentives in these areas. x Store Front Improvement Program: Provides resources and technical assistance to help small businesses make various exterior improvements. x Business Improvement Districts: Allow local businesses to organize and voluntarily assess fees that cover the costs of certain neighborhood public services (security, street cleaning, etc.). x Historical Resources Board: Administers the city’s historic preservation ordinance and gives guidance to owners on the rehabilitation of historic properties. x City-County Reinvestment Task Force: Monitors local lending practices and policies and develops strategies for investment in underserved areas or in cases of unmet lending needs.

Community Partnerships Beyond the city and quasi-governmental entities, the coordinator also works closely with several community and nonprofit organizations. These resources are critical to the overall success of the city’s vacant-properties program. Some of these groups have direct ties to the low-income communities where many of the vacant properties are found. They can also leverage an owner’s financial resources to ensure high-quality rehabilitation work.

They can mitigate some of the financial hardship that major rehabilitation creates on very low-income and/or elderly property owners. x Latino Builders is a nonprofit corporation that trains small contractors in licensing requirements, business development, and job safety. It has been instrumental in highly complex projects by providing the city and/or the owners with an accurate assessment of the materials, cost, and technical expertise required to properly rehabilitate vacant structures. Often, owners want to do the repairs themselves or to hire non-skilled labor. Nonprofit organizations such as Latino Builders can help explain the potential consequences when things go wrong in a construction job. In the past, it has awarded matching grants in the form of services for very low-income seniors or disabled owners. x Black Contractors Association, through its YouthBuild Initiative (funded by San Diego Youth @ Work and a HUD grant), offers job training, education, counseling, and leadership development opportunities to unemployed and out-of-school young adults. It uses the construction and rehabilitation of affordable housing in AfricanAmerican communities as catalysts for its educational efforts. YouthBuild provides services to community-oriented revitalization and enhancement projects like its “adopt-a-block” initiative.

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x Alpha Project is a nonprofit organization that affords drug rehabilitation assistance, job training opportunities, and outreach to homeless individuals. This organization teaches homeless men and women basic skills that should help them reenter the workforce, such as working a full shift, daily attendance, and working as a team. A few of the more challenging homeless participants have included people with a severe substance abuse history.

Alpha Project has worked with the vacant-properties coordinator to clean up and secure structures for eligible indigent property owners. In some cases, owners have been reluctant to dispose of personal belongings left within the structure because the belongings were connected to a family member who had passed away, or the owners preferred to ignore the repulsive conditions caused by illegal occupancy and transient use.

At different times throughout their own lives, members of the Alpha Project may have carried out similar illegal activities in vacant buildings. But now, they are working to clean up these properties and have become key players in the city’s program. Working for the Alpha Project often boosts participants’ morale as they go through their own personal metamorphoses. Cleaning the building’s interior can be the first step toward rehabilitation not just of the structure, but also of the homeless worker.

Over the years, the Alpha Project has demolished several properties that have become recurring public nuisances. Often owners with unsalvageable structures can’t sell their properties because of heavy liens or because of complex title problems. Ideal candidates for demolition by the Alpha Project are those properties with long histories of criminal activity, transient and illegal occupancy, structural dilapidation, and ownership by a very low-income, disabled or senior citizen.

Though demolition costs are very high for the average owner in San Diego’s booming construction market, a vacant lot, with time, is probably more marketable without the dilapidated structure. Most important, the city protects the public’s safety by eliminating a public nuisance without imposing a financial hardship on the owner or forcing a heavy lien for demolition costs.

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Projects in Practice Below are profiles of several successful projects that have been handled by the city of San Diego and its vacant-properties coordinator. They highlight a variety of property types (primarily residential) and owners. Not all of these projects have led to permanent rehabilitation; some are still works in progress. However, ICMA and the city believe that other localities can benefit from these examples as they tackle similar situations in their communities. The precise addresses and property owner names are not disclosed.

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Case One: The Program Veteran; or, how one property owner “played” the abatement ordinance-game.

Structure and site: An older, single-family dwelling, severely damaged by fire, which had been unoccupied for over six years. The site was located in a low-income, Latino/African American neighborhood. The owner rented the house out.

Repairs needed: Substantial upgrading and reworking of the electrical, mechanical, and plumbing systems; new roof; total replacement of all drywall in the interior of the house, the bathroom and kitchen cabinets, and flooring though out the house; interior and exterior paint; termite and pest-control treatment.

Owner’s profile: As a veteran of San Diego’s program, the owner had worked with all of the vacant-properties coordinators since 1997. Because the owner knew the requirements of the ordinance, he had learned to manipulate it to his benefit. He kept in minimal compliance with the ordinance by always submitting a statement of intent when requested and by keeping the site clean and the building secured. In addition, he maintained an active building permit but never did any rehabilitation work. He would get extensions to his building permit by claiming that he was about to commence repairs.

Photo: Norma Medina

He chose neither to communicate with city staff nor to receive assistance from the coordinator. He made himself out to be an old man, unfamiliar with the construction trade and lacking the funding to proceed at a faster pace. He often remarked that the city was harassing him because he was not white. The city should let him work at his own pace and stay away from his property.

City’s strategy: Per the abatement ordinance, the city can impose civil and/or criminal penalties when the owner fails to: (1) file a statement of intent; and/or (2) demonstrate a good-faith and diligent effort. In the past, the city did not impose penalties on this owner because there was always an active building permit and alleged rehabilitation work going on. But the owner refused the coordinator access to inspect his progress and refused to show photographs of the work he had done. Over a five-year period during which an active building permit existed, there was no record of any field inspections by the building permit inspectors. Because of the owner’s lack of good faith, the coordinator consulted with the managing attorney for the CEU regarding possible enforcement actions. The two agreed that appropriate enforcement actions were now necessary.

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As mandated by the abatement ordinance, the coordinator issued a $250 civil penalty notice, and the owner promptly sought an appeal. At the subsequent administrative hearing, the city attorney’s office represented the coordinator. This was one of the first appeals under the new ordinance. The city had to prove that, despite the owner’s filing of the statement of intent, his failure to diligently pursue rehabilitation was still a violation of the ordinance. The hearing officer concluded that the owner’s rehabilitation efforts were indeed unsatisfactory and sustained the penalty.

After the owner paid the penalty, he spent roughly $15,000 and eight months in finishing the rehabilitation work. He diligently sent his 90-day progress reports, allowed access to the structure for inspections, and regularly communicated by mail with the coordinator.

The coordinator worked closely with the building inspectors to limit any extensions of his permits to three months. Currently, the structure is rented to a family.

Key players: Vacant-properties coordinator, city attorney, and field inspector from the permit department.

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Case Two: A long time neighborhood nuisance Structure and site: Another single family dwelling, but this time located in a citydesignated historic district and standing in a prominent place at the gateway to the community. The structure is over 100 years old, potentially contributing to the character of the neighborhood. In the same block were two other boarded homes, including one across the street, a Victorian mansion that had been designated a historic site. The community had fought hard to preserve this historic mansion, but it too had fallen vacant.

Photo: Norma Medina

The site in question had been vacant since 1981 and boarded only since 1998. It was seriously vandalized and deteriorated. Transients routinely used the house, as it was located within blocks of a local homeless shelter. The neighborhood also contained one of San Diego’s most politically active community-planning groups. Given its long history of neighborhood planning battles with the city, this group had little faith in the vacantproperties program, the ordinance, or the city’s ability to resolve the situation.

Repairs needed: Complete upgrades of all systems, partial demolition of un-permitted additions, a new driveway and curb cut, architectural work to satisfy a complex permit process, careful craftsmanship, and expensive interior renovations.

Owner’s profile: A senior citizen on a fixed income, sentimentally attached to the family house he grew up in, making repairs on his own at a very slow pace. Fifteen relatives held a partial interest in the property, but never did anything to legally execute that interest. Despite the lack of legal title, all were opposed to selling it. The property had not changed legal ownership since 1945. When the original owner died in 1979, the eldest son moved in and continued to pay the property taxes.

City’s strategy: This case was strategically important for future enforcement efforts because of the vacant Victorian mansion across the street and other boarded buildings throughout the neighborhood. Plus, successful handling of this case would establish credibility with the community-planning group and lay the foundation for dealing with the historic mansion across the street. The city had to regain the trust of the community and to ensure the consistency of enforcement efforts, but first it had to stabilize the site so that it was no longer attractive to transients. The owner agreed to work with the police by keeping the property secured at all times and by giving them legal authorization to make arrests for trespassing. After several arrests and careful surveillance efforts, the homeless people went elsewhere.

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The coordinator then spent countless hours researching the house’s complex title issues.

Later, she met with each of the parties holding an interest in the property to explain in detail their options and to convey clearly the city’s position. Investigators from the city attorney’s CEU assisted in finding lost relatives.

The most important decision made by these multiple owners was to legally distribute the estate so they could obtain equity loans to rehabilitate. At the request of the CEU, the county public administrator’s decedents services division contacted the owners to notify them of the possibility of impending probate actions. Given the pressure from the city, the owners finally initiated the legal process before the public administrator. After the vacant-properties coordinator had worked closely and patiently with the owners for eight months and provided resources to resolve the title issue, the family decided that none of them wanted to acquire new debt and that they should sell the property. Following California law, the owners distributed the property through a petition for succession of property, which only applies to estates under $100,000—the fastest way to distribute an intestate decedent’s property. When the parties were ready to sell, roughly twelve months after the beginning of the coordinator’s efforts, she gave them the names of a network of real estate investors financially and technically capable of undertaking rehabilitation work on historic structures.

Photo: Norma Medina

Naturally, once a property changes ownership, the city must begin again to work with the new owner/investor to ensure compliance with the design guidelines and a high quality for the rehabilitation work. Thus, a network of reliable and trustworthy contractors and investors who have the ability to do quality work is critical to the success and credibility of the city’s program. After all, the worst thing that can happen is for a new owner to fail to rehabilitate a structure properly, proving to the community that the city cannot effectively deal with the problem.

Yet the city is in a difficult position because it has no legal authority and little control over the sale and the eventual buyer of a property. The coordinator can only provide the names of as many qualified resources as possible and hope that the owner will choose one of those.

In this case, the coordinator’s monthly strategy meetings with the community planner, the CEU managing attorney, and the police helped resolve issues regarding the property. The property sold at a record price, and renovation work is now underway.

Key players: Vacant-properties coordinator, community relations officer, community planner, San Diego County’s public administrator’s office, deputy city attorney, network of investors, title attorney.

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Case Three: A collector of boarded structures

Photo: Norma Medina

Photo: Norma Medina

Structure and site: A single-family dwelling on a small and narrow lot in another older, inner-ring suburb of San Diego. The structure was severely deteriorated and had remained vacant for roughly 15 years and boarded for at least five years.

The repairs needed: Complete upgrade of the interior and its supporting systems (plumbing, electrical, etc.); removal of un-permitted interior work; the architectural work necessary to meet previously conforming side-setback requirements; and rectification of several conditions that violated emergency/fire exiting requirements.

Owner’s profile: As it turned out, the owner possessed eight boarded structures throughout the city. He had a long history of code violations and generally did little to cooperate with the city despite lengthy negotiations with department inspectors and the city attorney’s office. At this particular time, he was making minimal repairs by himself at a few of the structures. The city attorney had already filed a criminal complaint for the numerous code violations at his other properties and added this one to the case.

City’s strategy: In preparing for litigation, the city discovered that most of these properties, as listed on the deeds, were owned by the man and his wife. Therefore, the original criminal complaint had named both parties. However, this particular property, for some reason, was owned solely by the wife. The attorney’s strategy was to continue the wife’s trial dates on this property and not to immediately dismiss the charges against her on the other properties.

The goal was to leverage the relationship so as to encourage the owner to rehabilitate this property as he expressed a reluctance to incur the additional debt. Eventually, the owner—in exchange for dismissal of the complaint against his wife—agreed to terms of his criminal probation that eventually led to the sale of this house to finance repairs on the others. Within two weeks, the property sold, and it had been completely rehabilitated within two months. The old owner continues to make repairs on the other boarded structures according to the terms of his probation.

The players: city attorney, coordinator, and community planner.

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Case Four: Adventures in infill development

Photo: Norma Medina

Structure and site: A longtime public nuisance on a split lot. A structurally unsafe single-family dwelling with severe fire damage, it had evolved into the neighborhood’s crack house, with a long history of criminal activity and the potential for becoming a serious threat to the public’s safety.

Repairs needed: The structure was not salvageable because it was structurally unsafe. Demolition was the most reasonable course of action, although the city has limited legal authority when it seeks the demolition of private property, especially single-family dwellings.

Owners’ profile: A separated couple. The husband had become a transient and was difficult to find, while the wife was a low-income working mother with two children.

Neither of them had the financial resources or the expertise to raze the property.

The city always dealt with the wife because the husband lived mostly on the streets.

While she had only partial legal authority over the property, she really wanted to sell it and get rid of the problem. Because her husband was nowhere to be found, however, and because the property was jointly owned, she could not sell without his authorization. In addition, the poor condition of the structure, the small size of the lot, and the condition of the site limited the marketability of the property.

The owner had agreed to pursue the sale of the site. The neighbors claimed that the lost husband had shown up at the site every six to eight months, walked around, and then left, and that the drug users said they had had his permission to use the structure. When he somehow found out that the structure was no longer there, the husband contacted the wife and agreed to the sale. The coordinator helped the wife to market the site among real estate investors and developers.

Ultimately, the new owners finished an infill project with a single-family, prefabricated structure.

Photo: Norma Medina

City’s strategy: The coordinator facilitated the demolition of the structure at no cost to the owner, through a partnership with a nonprofit group.

The key players: Police department, coordinator, Alpha Project, real estate industry, and development industry.

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Overall Lessons Learned in the City’s Program x Implement a plan to institutionalize a vacant-properties program within the local government structure, and designate a vacant-properties coordinator. x Provide sufficient staff and resources to ensure the continuity of the program. x Build partnerships across the key city departments, especially the municipal attorney’s office. x Communicate constantly with the community, city council members and staff, and private sector partners (e.g., apartment owners’ associations, boards of realtors, and financial institutions). x Apply a variety of approaches and strategies that include both carrots (incentives for rehabilitation) and sticks (code enforcement remedies) to stabilize the site.

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Conclusion: Observations and Trends in San Diego’s Vacant-Properties Initiative San Diego appears to have stabilized the number of its vacant properties. Given its mix of strategies, and with the new Code Enforcement Incentive Grant, San Diego has the necessary enforcement tools to effectively combat the ills of vacant properties on a siteby-site basis. With the booming economy between 1994 and 2000, the opportunities for rehabilitation and revitalization grew. Yet the recent economic downturn has raised concerns about the potential for future mortgage failures, foreclosures, and disinvestment in older neighborhoods. Moreover, the housing stock, especially in the inner-ring suburbs, continues to get older. And these older suburban neighborhoods are undergoing serious change as the demographics of the city change. With leadership and vision, however, San Diego’s vacant-properties program can adapt well to these new dynamics.

In concluding its case study, ICMA asked several of the key players in San Diego’s vacant-properties program to reflect on their current challenges and to share their thoughts on possible next steps and future trends. Following are several recommendations.

Establish stronger policy and programmatic links with other key city departments, such as economic development and planning.

With its emphasis on nuisance abatement, San Diego’s vacant-properties program has built strong partnerships with the city attorney’s CEU, along with the police and building inspection departments. As San Diego continues to strengthen its efforts on rehabilitation, however, the vacant-properties program recognizes that it must forge closer relationships with the city’s economic development agencies and with the planning department. These partnerships could allow the city to take a more holistic approach to neighborhood revitalization, in the following ways: 1. By enhancing the capacity of the existing infrastructure, including transportation, to make neighborhoods with large numbers of vacant properties more attractive to private reinvestment.

2. By ensuring that zoning regulations, building codes, and design standards accommodate the unique needs of rehabilitating vacant structures.

3. By providing greater zoning flexibility (in the underlying specifications of the local ordinances, and in the review process itself) as to lot sizes and dimensions. This step would make it easier for infill development to proceed on nonconforming sites occupied by vacant properties.

4. By streamlining the current process and requirements for rehabilitating historic properties so that they encourage, not discourage, owners to repair their vacant structures consistent with the heritage of the building and of the community. The first step is to conduct a survey/inventory of vacant properties that may hold historic significance, especially the in Sherman Heights and Golden Hill neighborhoods.

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Prevent substandard properties from falling vacant.

A challenge common to all vacant-property programs is preventing dilapidated buildings from becoming uninhabited. Technically, these “transitional” properties are outside the scope of most vacant-property programs and ordinances, but, if cities and counties can design a systematic approach to identifying such properties and can then provide assistance or rehabilitation incentives earlier, the number of vacant properties should decrease.

San Diego’s Code Enforcement Incentive Grant will target substandard properties within three neighborhoods, in a proactive effort to prevent future vacancies. While San Diego and other cities can take strong enforcement actions against substandard housing that poses a threat to public safety, long standing constitutional principles and state real property laws limit the ability of local governments to take drastic steps regarding private property. San Diego’s recent legislative efforts to expand the appointment of receivers under the state housing law, however, could help in pulling substandard properties away from the brink of abandonment.

Abate vacant and abandoned commercial buildings too.

Vacant properties along older commercial corridors greatly damage the urban fabric of many older neighborhoods. What were once vibrant neighborhood commercial centers have become home to “dollar stores,” as the more viable retail businesses have left for the smartly designed power centers and strip malls. Owners and tenants of these older commercial structures often face the challenges of rectifying zoning nonconformities while adhering to strict health and safety requirements (e.g., retrofitting of fire hardware), in addition to following the normal business licensing procedures.

Although San Diego’s program focuses more on residential buildings, over the years it has been called upon to abate public nuisances caused by vacant commercial buildings.

The different motivations of commercial property owners and landlords, compared with residential owners, often pose remarkable challenges. Moreover, several of the special enforcement procedures that apply to residential properties (such as the appointment of a receiver under the state housing law) are more cumbersome and difficult with commercial properties.

Thus, San Diego’s vacant-properties program recognizes that commercial properties often require a different set of partners and strategies. For example, it has worked closely with the Store Front Improvement Program within the city’s office of small businesses.

The vacant-properties program also partners with several of the city’s business improvement districts (BIDs). Both programs complement each other by providing assistance to emerging micro-enterprises such as helping owners find future tenants.

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Rehabilitation of a Commercial Neighborhood Site and structure: An older commercial corridor in an economically challenged neighborhood that is further troubled by heavy pedestrian and car traffic along an important mass-transit route. The area had 14 vacant structures within a one-mile stretch: some were boarded properties, some were vacant buildings, and some were vacant lots.

Among them were several properties that had fallen vacant because of previous code enforcement actions.

Owners’ profile: An assortment of private property owners, mostly small businesspeople who felt resentful of the city for its perceived lack of redevelopment in the area. Yet several of the owners had managed to delay and even stop past city planning and redevelopment efforts.

City’s strategy: The vacant-properties coordinator had attended one of the neighborhood business association’s monthly meetings, at which several members approached her for assistance in revitalizing the area. Members were already working with a policedepartment walking team to address loitering, drug dealing, panhandling, graffiti, and vandalism, as part of a community-oriented policing effort. Many of the owners felt that rehabilitation was too difficult, given the complex zoning and building code requirements and a cumbersome development process.

After an initial brainstorming session, participants concluded that they would first need to study the whole corridor. They decided to fund a project led by a local professor of architecture and his students, involving several proposals for improvements on both private and public property. The coordinator helped facilitate meetings and interviews for the students with city planners, zoning investigators, building inspectors, volunteer groups, graffiti-control officers, code enforcement staff, and the specialized units in the police department.

At about the same time the city’s long-range planning department began its own study in the same area, looking at public improvements and infrastructure. The property and business owners actively participated in both studies, voiced their needs, and expressed their ideas for the future. The city considered the concepts resulting from both studies and agreed to implement several of the recommendations. San Diego also received grant funds based on these studies to help in making the public improvements along the corridor.

Photos: Norma Medina

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Fine-Tune the Vacant-Properties Program, Ordinance, and Process.

The following adjustments are recommended: x Update the abatement ordinance by seeking higher penalties and perhaps cost recovery fees. x Ensure that the existing vacant-properties program has sufficient resources to fully implement the abatement ordinances. One need, for example, is an adequate budget to pay for the costs of city abatement on private property. x Write another grant proposal to provide additional support for the city attorney’s CEU and to obtain additional resources for NCCD. x Seek further help (volunteer or grant-supported) from private attorneys in counseling new property owners who are heirs in probate cases. x Establish better relationships with key strategic partners: ¾ Probate and county public administrator staff: Spend time educating these county officials about the impacts of vacant properties on neighborhoods. They must better understand the need for speeding up the transfer of probated property handled by the public administrator (e.g., when there are no heirs). ¾ Financial Institutions: Establish closer relationships with regional and local financial institutions so that more private dollars are made available for rehabilitation, and, where necessary, demolition. x Streamline the permit and development review process for nonconforming structures, and relax certain code sections to increase the floor/area ratio (FAR) on small lots.

San Diego’s Land Development Code, Section 127.0102, provides a discretionary review process (not a variance) for applications that seek to expand previously conforming structures.

Negotiate voluntary abatements of publicly owned vacant properties.

Properties owned by certain federal and state governmental entities (county, HUD, Navy, school district) are generally exempt from local zoning and building codes. Certain exceptions seem to exist in California case law that might permit the city to abate vacant properties that create public nuisances on property owned or managed by the federal or state government. If the city goes ahead and abates, however, case law is not entirely clear on whether it can recoup its abatement costs. Given this legal uncertainty, the city and its coordinator often try to negotiate voluntary abatement agreements with these governmental and quasi-governmental entities, like the Port District and other special districts that operate under a special state statute or charter.

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Strengthen San Diego’s strategies for repeat properties and property owners. x Require aggressive rehabilitation of problematic properties by filing judicial actions alleging that the properties are public nuisances because of recurring criminal activity and/or a long-standing history of vacancy. x Explore the use of Health and Safety Code, Section 17980.7, to declare residential properties substantially substandard, and then request that the court appoint a receiver. Follow the lead of other localities that are enjoying success with this remedy. x Educate the judiciary on the “broken-window theory” and the relationship between vacant properties and crime. x Continue to seek additional state legislation that addresses problems unique to vacant properties. For example, Assembly Bill 1467, sponsored at the request of the city by Assembly Member Kehoe of San Diego, will become law on January 1, 2002. AB 1467 revises the Health and Safety Code: (1) to allow a court to appoint nonprofit organizations or community development corporations as receivers for substandard residential buildings, and (2) to authorize that liens be assessed and recorded against the property for any monies owed to receivers. AB 1467 also gives property owners a preference in repairing their vacant singlefamily dwellings whenever the repair would not cover more than 50 percent of the dwelling.

Forge links with San Diego’s infill development ordinances and with the strategic framework element of the General Plan.

Given the estimated population growth that San Diego should face in the next 20 years (450,000 new residents), the city must take a more long-range look at how vacant and underused residential properties and buildings can accommodate these new residents.

While the formal program links have not yet been established, several city planners, city attorneys, and the vacant-properties coordinator all recognize the pressing need to do this.

One possible approach to creating more formal policy links would be through the city’s existing infill development ordinances and the current update of its General Plan’s Strategic Framework element.

The Strategic Framework (Strategy 2020) San Diego’s latest step in its long history of managing growth (see text box entitled “Growth Management, San Diego-Style”) is the Strategic Framework element of the General Plan. As mandated by state law, the city must update its general plan to accommodate recent 20-year population projections. It must also update the housing element of the plan every five years.

The Strategic Framework will replace the current “Guidelines for Future Development” element of the General Plan, which projects the potential for new development on raw

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land. This new element will provide a vision for the future and a guide for updates of the general plan, listing goals and objectives for San Diego’s future development. The Strategic Framework also will contain policies and strategies on how the city can “reuse” land, which is important because only 10 percent of the city’s developable land is still vacant. Building on previous planning efforts and adopted polices, the Strategic Framework will imagine the future through such topics as: x Economic prosperity: Encouraging a diversified economy, public-private partnerships, environmental preservation, and a leading role for education. x Urban form and environment: Developing a functional and beautiful city, with preservation of San Diego’s unique geography, and its existing diverse neighborhoods, encouragement of compact development, capitalization on its natural assets and climate, and establishment of clear growth guidelines and regulations. x Neighborhood quality: Creating more diverse neighborhoods with strong participation by residents, meeting the citywide need and responsibility for affordable housing, and offering decentralized access to all city facilities. x Public facilities/infrastructure: Ensuring adequate services, promoting equity, phasing growth, and making new development pay its own way. x Regional issues: Encouraging cooperation and coordination, resolving issues across city, county, and international boundaries.

For the past two years city planners have held extensive discussions on Strategy 2020, the Strategic Framework Element of its General Plan. They sought citizen input through a series of forums, workshops, and town hall meetings. They organized a 40-person citizen committee, appointed by the mayor and city council to guide the strategy for developing the Framework. The first round of meetings discussed San Diego’s growth projections, while the second round focused on growth management, and the third round discussed alternatives for future development. The final phase will be a presentation of the draft/preliminary strategy, set for March 2002. The Strategic Framework element will also include a five-year implementation plan and a public facilities and infrastructure financing strategy.

Existing Infill Development Tools Beyond the grand vision of the Strategic Framework, San Diego already has several municipal ordinances that encourage infill development. Enhancement of these existing tools could easily generate stronger links with the city’s vacant-properties program. x Infill residential development permit: As part of the city’s comprehensive update of its zoning and development codes, Land Development Code (LDC), Section 143.0430, now contains supplemental regulations to guide infill development through a special permit/approval process. Within the single-family zone, the ordinance requires that any proposed density not exceed the average density of similarly zoned single-family units within a 500-foot radius. San Diego further encourages neighborhood compatibility through special architectural design requirements.

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x Residential-Small Lot Zone (LDC Section 131.0304) and Residential-Townhouse Zone (LDC Section 131.0405): These transition zones are designed to increase the potential yield within single-family areas by allowing more density without the feeling of adding density. x Accessory units/granny flats: California’s state law sets limits on the ability of local governments to restrict accessory units through their local zoning ordinances. State laws, and hence many local ordinances, establish a limit on the number of granny flat conversions based on the fluctuating rental vacancy rate of the entire city. Thus, when the rental vacancy rate is high, local governments can restrict the number of granny flats. In San Diego, accessory units/granny flats are permitted only in single-family houses, must provide parking, and must not exceed total square footage limits; there must be a city vacancy rate of greater than 5 percent to impose these additional requirements. Given today’s exceedingly low vacancy rates, the planning department is now revising the occupancy restrictions to encourage more accessory units (see, LDC Section 141.0302).

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Growth Management, San Diego-Style San Diego’s growth management efforts began in 1979, under then-Mayor Pete Wilson, who oversaw the creation of the city’s first growth management plan. The plan set out existing regions within the city’s 187 square miles that would accommodate the demands of short-term growth and designated certain areas on the fringe as open space for “future urbanizing.” The idea behind the plan was to have these areas remain free of development until someday in the future.

For the most part, San Diego’s elected officials have held true to the growth management plan’s original spirit. However, in the mid-1980s, the city council approved a major subdivision development in the “future urbanizing area.” Citizens and environmentalists worried that this action would lead to other projects in those areas that were to remain relatively free from development. The community organized a successful city initiative (Proposition A), which was passed by nearly 60 percent of the voters and made it more difficult for future city councils to approve new development in the future urbanizing area. Any proposed development of a certain size would now require that a majority of the voters approve a “phase shift” of the land from future urbanizing to “planned urbanizing.”

San Diego’s 1979 growth management plan rested on two main principles: (1) “pay as you grow,” which resulted in a series of impact-fee and exaction ordinances and policies; and (2) a capital improvements program (CIP) in older, infill areas. The intention here was to provide for equitable treatment of new and older sections of the city.

Unfortunately, the passage of the statewide property tax initiative Proposition 13 in 1978 significantly limited the city’s ability to use property tax revenues.

While it took a few years for San Diego to feel Proposition 13’s fiscal pinch, when it happened, the city’s budget for CIP was the primary target. Many of the improvements planned for infill areas were deferred as a means of balancing the city budget and maintaining fiscal security under Proposition 13 restrictions.

As a result of not following the growth management plan’s original intent, neighborhood infrastructure deteriorated within the infill areas while a building boom occurred in outlying areas. Because of the plan’s first principle of “pay as you grow,” developers covered the city’s infrastructure costs for these newer subdivisions on the city’s fringe.

However, the inability to maintain and upgrade the infrastructure in the older communities presents a major challenge in getting support for more intense infill developments.

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Contacts Norma Medina, Vacant-Properties Coordinator, Neighborhood Code Compliance Department, City of San Diego; 619-235-5837; nmedina@sandiego.gov.

Diane Silva-Martinez, Head Deputy City Attorney, Code Enforcement Unit, City of San Diego; 619/533-5655; dsilvamartinez@sandiego.gov.

Frank Hafner, Deputy Director, Housing and Code Enforcement Division, Neighborhood Code Compliance Department, City of San Diego; 619/236-5504; fhafner@sandiego.gov.

Coleen A. Frost, Strategic Framework Plan Program Manager, Long-Range Planning, Planning Development and Review, City of San Diego; 619/235-5216; cclementson@sandiego.gov.

Betsy McCullough, Deputy Director, Long-Range Planning, Planning Development and Review, City of San Diego; 619/236-6139; bmccullough@sandiego.gov.

References Report: Recommended City of San Diego Boarded Building Strategy, prepared by MacLeod Consulting Services (February 12, 1996).

Status Report of City of San Diego Vacant-properties Program, prepared by Melodie Bridgeman, vacant-properties coordinator (July/August 1997).

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Appendix 1: VACANT PROPERTIES TASK FORCE City of San Diego Definition of Vacant Properties: x Vacant Property means any abandoned or unoccupied structure, lot or premises which meets any of the following criteria: o Creates dangerous conditions that significantly affect the public health, safety, and welfare including but not limited to fire hazards, unsanitary conditions, criminal activities, general dilapidation and structural deficiencies; or o The City has declared the structure substantially substandard pursuant to California Health and Safety Code section 17980; or o The City has issued a notice and order as an unsafe, substandard or dangerous building or structure under San Diego Municipal Code Section 91.0203.

The term vacant property shall not include unoccupied structure, lot or remises that remains secure, poses no threat to the public health, safety and welfare, and does not constitute a blight on the neighborhood.

Scope of Problem: x 300+ vacant properties estimated within the City of San Diego o Increase over the past five years o Poor economy – depressed land values o Owners unable to meet financial obligations o Saving and Loan failures & RTC o Vacant properties in every community Problem Statement: x Two Prongs to the Problem o Abatement of imminent public nuisances o Rehabilitation of the property x The Broken Window Theory & vacant properties o Crime and gang activity o Graffiti o Neighborhood destruction o Decline in property values

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Task Force Program Objectives x Comprehensive Approach o Devise a framework within the City to coordinate all aspects of this problem: identification, abatement and rehabilitation of vacant, substandard properties. x Incentives and Disincentives o Establish new policies and laws to provide both incentives for owners to rehabilitate properties and disincentives for maintaining properties in a derelict condition.

Community-City-Industry Partnerships x Develop partnerships between the City and Housing Commission with local community groups, housing rehabilitation specialists, lenders, real estate professionals and citizens.

Recommendation One: x Centralize the procedures within the City to identify and abate vacant properties o Consolidate the City’s existing system of handling vacant, substandard properties and design a coordinated strategy, which combines abatement and rehabilitation. o The new strategy would ensure that vacant properties get secured. o The new strategy would simplify steps to facilitate rehabilitation.

Recommendation Two: x Create a new position, Vacant Properties Coordinator, in the Neighborhood Code Compliance Department x Vacant Properties Coordinator would be responsible for the following duties: o Facilitate and organize a pilot program; o Serve as a clearinghouse for all complaints and responses involving vacant properties; o Coordinate the investigation and determination of suitability of properties for rehabilitation; o Enter data into the multiple listing and registration databases; o Coordinate all phases: 1) identification, 2) board and secure, and 3) rehabilitation; o Work with community groups, lenders and real estate professionals to ensure the viability of the program; o Seek funding of position by a variety of sources (new registration fees, neighborhood pride and protection, Weed and Seed, CDBG and grants).

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Recommendation Three: x Amend the San Diego Municipal Code to require registration of vacant properties (Not approved by PS&S Committee) Recommendation Four: x Build a Coalition with representatives from the City Council, City Entities, Lenders and Community (Churches) with the mission to rehabilitate vacant properties o Pool resources and experience o Develop strategy to rehabilitate vacant properties using private funds to leverage public funds o Target specific vacant properties Recommendation Five: x Work with the Association of Realtors to do the following: o Develop and maintain a database of vacant properties to encourage the sale and rehabilitation of vacant properties by private individuals o Create and distribute a Resource Guide on financing and rehabilitation resources and assistance for property owners (e.g., 203K Loans, Home Style Loans) Recommendation Six (referred to New Working Group for further study): x Create incentives for owners to quickly rehabilitate vacant properties o Waive or reduce building and zoning permit fees for owners who rehabilitate vacant properties o Provide information and assistance in obtaining special financing for rehabilitation o Expedite the permit process to rehabilitate vacant properties Recommendation Seven (referred to New Working Group for further study): x Implement a private rehabilitation contractor program as a last resort o Facilitate the appointment of a receiver with the willingness and ability to rehabilitate o Private Rehab Contractor appointed as part of administrative/judicial hearing only where existing owner/financial institution abandons the property o Private Rehab Contractor repairs and occupies the property, thus, encouraging home ownership o Owner of financial institution can reclaim repaired property if they pay Rehab Contractor’s costs o Amend state and local laws if necessary to motivate owners to transfer title to rehab contractor o Focus on single-family home ownership

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Recommendation Eight: x Establish an on-going Working Group to Implement and Monitor the Task Force’s Recommendations and Policies o The Working Group will carry forward the Task Force’s recommendations into a pilot program that targets the rehabilitation of specific properties o The Working Group will be comprised of the Task Force’s current membership with the mission to facilitate partnerships between the public and private sectors o The Working Group will evaluate Task Force Recommendations Six and Seven and develop specific programs and proposals for subsequent review by the PS&S Committee o The Working Group will evaluate and integrate the following new suggestions into the Task Force’s recommendations and policies: 1) Coordinate efforts with the City’s Redevelopment Corporations to target vacant properties 2) Work with Housing Commission regarding financing to rehabilitate vacant properties (i.e., Housing Trust Funds, and conventional lenders) 3) Integrate a preventative strategy that would help properties from becoming vacant (i.e., include aggressive code enforcement efforts against substantially substandard buildings and incentives to owners to rehabilitate before they become vacant)

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