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City proposes pilot to reclaim long-term vacant homes; housing staff identify 229 rehab candidates
Summary
Housing staff presented a pilot program to recover long-term vacant residential properties for rehabilitation, identifying 229 potential rehab candidates and 60 demolition cases. The pilot would pursue liens and foreclosure to transfer ownership for rehabilitation, using modest start-up funds and revolving lien receipts for future activity.
The city’s housing department proposed a pilot program to bring long-term vacant residential properties back into productive use, telling council on April 14 that staff identified 229 long-term vacant properties that could be rehabilitated and 60 properties likely to require demolition.
Melissa Cook, housing administrator, said staff combined on‑the‑ground inspections with condemnation lists and other data sources to create the inventory. “Ultimately, what we've learned is we have 229 properties that we have identified that have been vacant long term that are good candidates for rehabilitation, and 60 properties that need demolition,” Cook said.
Pilot approach: Staff outlined a two-track approach. For properties with city liens and nonresponsive owners, the city would pursue foreclosure on liens, take title at auction where appropriate and then issue an RFP for nonprofit or for‑profit developers to rehabilitate the homes as affordable housing. Alternatively, private buyers could purchase properties at auction and carry out rehabilitation. Staff characterized the program as intended to become self-sustaining by revolving lien receipts and sale proceeds.
Funding and scope: Cook said the city has roughly $60,000 a year from the 2021 vacant property registry and could use Community Development Block Grant (CDBG) administrative funds and lien proceeds to cover initial legal and short-term holding expenses—staff estimated about $2,000–$3,000 per foreclosure for attorney fees. The housing department proposed selecting 10 candidate properties for the pilot and running the effort over six to 12 months to test the approach.
Council questions and risks: Council members raised concerns about mitigation costs (asbestos, remediation and demolition), uncertain lien sizes and the risk the city could temporarily own properties and bear upkeep costs. Cook said staff would prioritize properties that “pencil” for rehabilitation and do due diligence on liens and encumbrances before proceeding. Council members recommended stronger outreach to nonprofit partners (NeighborWorks, Posada, Pueblo Urban Renewal Authority and local housing authority) to reduce demolition costs and accelerate rehabilitation.
Ending: Cook said staff will proceed with due diligence, work with city attorneys on foreclosure options and return with more detailed financials and a proposed list of 10 pilot properties for council consideration.
