The Corner Forum
Monday, April 5, 2004
Issue #64

DHCD Trying to Reclaim Nonperforming Properties It Sold

At the March Advisory Neighborhood Commission meeting, Sharon Cochran, 1300 block of Emerald Street NE, and Maureen Nielsen, 1312 Emerald St. NE, asked Stanley Jackson, the director of the D.C. Department of Housing and Community Development, about a vacant building on Emerald Street the city sold a few years ago.

Ms. Cochran: There's a house on my street, 1323 Emerald Street, that was sold in September 1999, for $250. The boards are still up on that house. There's trash that gathers in the back, and there's poison ivy coming over the backyard. We've had to call DCRA on the house. And she hasn't paid any property taxes on that house.

I guess I'm wondering — what's gonna happen? When I wrote to your agency in the year 2000, when you weren't there, I was told, "We no longer own the house — they've applied for X loan, and everything is gonna be okay."

Well, it's not okay. The taxpayer's getting ripped off, and this place is a hazard to our community, to our street, and I'm just wondering what you're — I feel like you're still responsible for that.

Mr. Jackson: That's a fair assessment. Let me tell you what we have done since I've been there.

We've gone back and recaptured some of the properties. That has never been done. I started that process about a year and a half, two years ago, right after I got there, to recapture nonperforming investments. Some of them have been challenged; obviously, some of the folks are seeking court protection. Some of the agreements that were written before I got there didn't have recapture provisions. Everything right now has a recapture provision, so that when we have various nonperformers or slow performers, then we have to stimulate them to move.

The whole purpose of getting into this lottery program is to give someone who otherwise does not have the benefit of owning property, to have it at the cost of $250, with the caveat that they have to improve the property and bring it up to code and live there as a resident — as an owner-occupant.

When we stepped back and started examining the portfolio, we had a number of people who were in various stages of trying to get their homes repaired, and then you got some income problems, where people who were eligible for certain funding all of a sudden were not eligible for funding because of certain things that occur. I can tell you what I've done thus far is recaptured several of these properties from Homestead lottery winners because they have been unable to move those assets, and we will probably go out maybe later this year with a lottery of those recaptured properties. So that circumstance should be one that we've probably already looked at, and we've probably got some action on it.

I can't speak to it specifically, but we have in fact recaptured I think six different properties, and we had two people voluntarily just turn them back, because they knew we were going after them.

But 1323 Emerald Street — the person you would need to work with is Carlynn Fuller; she's at 442-7295. She can give you the status on where we are with that — whether that's one of the ones that's actively being recaptured.

Ms. Nielsen: And if it's not on that list, how long before it can be put on?

Mr. Jackson: I can tell you that every one of them has had something going on. Since I've been here, I've looked at every single property in the portfolio, and made a decision that if you're not at some stage of performance, then you've got to tell me why, and if you don't have a legitimate reason as to why you haven't been able to do this, then I'm going after the property. So I would say that on every single property, there has been some contact as to what's going on.

Ms. Nielsen: If you decide to take back the property, how long does it take before you can do that? Do you have to go through condemning it?

Mr. Jackson: Various stages. Some people are more sophisticated in the process than others. If they file for bankruptcy, then an automatic stay goes into effect, and you have a couple that do that to protect the asset. I can tell you that we probably now have gotten about six, seven properties back, and we're obviously going out and trying to grab more properties, because we would like to try to do another lottery this year, if at all possible. §