RACINE — A smattering of blighted buildings, with peeling paint and boarded windows, can bring down an entire neighborhood.
In the six years prior to 2017, Racine County transferred ownership of 19 “distressed,” tax-foreclosed parcels to the city. And this year 10 properties have already been transferred and another 19 are slated for donation this fall, according to M.T. Boyle, chief of staff for County Executive Jonathan Delagrave.
“The problem is, there’s hundreds of houses that are distressed,” said Racine Mayor Cory Mason.
To help address the issue, Racine County has offered to transfer ownership of hundreds of these properties to the city next spring. Racine and its nonprofit partners would then be set with finding the money to mend them.
“It comes with no small challenge,” Mason said. “In some cases the houses need some amount of rehabilitation. In other cases they need to be demolished entirely and built from the ground up.”
In addition to working with community partners like Racine Revitalization Partnership and Habitat for Humanity, the city is looking to use state and federal funding to fix up or raze the blighted properties. Per state law, only the county can foreclose on a property in Racine due to unpaid property taxes. After that happens, the county can transfer ownership to the city, at the city’s request.
The city and Racine County have been working more closely this year than they have in the past to transfer more properties in an efficient manner.
The city hopes to make an impact in neighborhoods that never bounced back from the 2008 recession including Uptown and the area north of Downtown near Lincoln Street and Dr. Martin Luther King Jr. Drive, Mason said.
“Other parts of the city seem to have rebounded from the recession but there are areas in the city that haven’t made it back,” he said.
Speeding the process
County Treasurer Jane F. Nikolai has wanted to streamline the process of transferring ownership of tax foreclosed properties for some time.
Although the county is looking at approximately 29 transfers to the city this year, Nikolai said around 400 properties in Racine are eligible for foreclosure due to unpaid taxes.
Nikolai and her office have offered to transfer up to 200 of these properties to the city next spring, but the number of properties the city requests will depend on the revitalization resources available.
To speed the action on properties that the city views as a detriment to their neighborhoods, Nikolai is set to deal with abandoned and blighted Racine parcels that are eligible for tax foreclosure in a separate action than its regular foreclosure proceedings.
The goal, Nikolai said, is that by September the city will provide the county with a list of properties it would like. In a spring court date, the county would hand over the properties to the city.
The effort to revitalize tax-delinquent properties is mutually beneficial to the city and county.
As the county has to reimburse the city for unpaid taxes on these parcels, “the county wants to get houses back on the tax rolls,” Delagrave said.
The tax foreclosure process is a lengthy one, due to state law requiring three years of tax delinquency prior to any action. Although this law is beneficial to owner-occupants experiencing financial trouble and working to keep their homes, Mason said, it means that sometimes dilapidated properties are left to languish while the legal process takes its course.
“It’s really counterproductive for neighborhoods, if you’ve got landlords — particularly absentee landlords — who don’t live here or aren’t committed to keeping up the properties,” Mason said.
For example, a slightly distressed home might enter into the tax foreclosure process now, needing $20,000 of repair work. However, if that home sits vacant or no repairs are done through the three-year foreclosure process, it might require $100,000 or more worth of repairs or even need to be demolished.
Mason said moving the process along more quickly would require a change in state law. He believes it would be helpful for Wisconsin to make a distinction between the foreclosure timeline for owner-occupants and landlords who neglect their property.
According to Delagrave, the city and county have a plan to ask the state for legislative change to speed and simplify the tax foreclosure process so the county can get delinquent properties to the municipalities in a more efficient manner. The two entities are still in the discussion phase of the plan, Mason said, and they have plenty of time to find sponsors for their ideas as the state Legislature doesn’t reconvene until January.
The city was awarded three Opportunity Zone census tracts as part of the federal tax reform bill passed in December. According to the IRS, under certain conditions investments in these economically-distressed areas may be eligible for preferential tax treatment, but the rules are still being written. Mason is hoping to take advantage of these zones that encompass the Lincoln-King area, Downtown and approximately half of Uptown.
While Mason is excited about possible development in Racine due to the Foxconn manufacturing campus set to begin construction in Mount Pleasant, he does not think that should be the city’s only focus.
“We also have to demonstrate that we can rebuild existing neighborhoods that are in distress,” he said.
“We also have to demonstrate that we can rebuild existing neighborhoods that are in distress.” Cory Mason, Racine mayor