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Tax sale puts houses on the block List of 2,900 properties eclipses last year's total

Buffalo, already burdened by the third-highest housing vacancy rate in the nation, today begins what many think is the biggest real estate auction in its history.

About 2,900 properties, some of them occupied, some of them vacant and abandoned, are targeted for the City Hall auction block because of back property taxes.

The large number of houses up for sale -- on top of the 2,500 properties on the selling block last year -- is viewed as one more indication that the city's vacant housing crisis is worsening.

"I think it reflects concerns in the economy," said Kathleen Lynch, coordinator of the Western New York Law Center's foreclosure prevention program. "We're hearing from a lot of investors who are having trouble getting loans for their properties."

How many of the houses sell at this week's auction, held in the Buffalo Niagara Convention Center, will decide how much this latest crop of tax-foreclosed properties will add to the city's vacancy woes.

>City changes its plans

The city already owns, or will soon own, about 8,000 properties, most of them vacant residential lots.

On top of that, there are another 10,000 or so privately owned houses that are believed to be vacant and abandoned. According to the U.S. Census Bureau, only Detroit and New Orleans have a higher vacancy rate.

City Hall, eager to limit the number of properties it adds to its already large inventory of houses and vacant lots, is dramatically changing the way it handles foreclosed property this year.

And for some neighborhood leaders, it's not a change for the better.

"This could be devastating to the city," said Michele Johnson, a neighborhood liaison to Buffalo's Housing Court. "Hundreds of properties that need to be demolished could be sold to people who don't know what they're getting."

The rub is over the city's decision to take ownership of a much smaller number of foreclosed properties targeted for demolition.

City officials say about 1,000 houses -- one of every three on the auction list -- need to be torn down.

They plan to acquire only 300 houses this year and acknowledge the cost and liability associated with maintaining its already large inventory of property is one of the major reasons why.

"We want to take properties we have a use for," said Brian Reilly, the city's commissioner of inspections, economic development and licenses. "Our goal is to keep responsibility on the private owner."

Reilly said the city will issue a buyer beware warning at the auction when properties recommended for demolition are put up for sale.

"Buyers will know its slated for demolition," he said.

He also claims the city, because of a change in local finance law, maintains its legal ability to demolish or maintain those privately owned properties.

The city, in fact, already has plans to tear down 250 homes it doesn't own.

For Johnson, the question is: Why not take all of them if they need to be torn down?

She thinks dilapidated houses may end up in the hands of unsuspecting buyers or, even worse, remain in the hands of neglectful owners.

"Who's going to maintain these properties?" asked Johnson. "Who's going to make sure they're boarded up and the grass is cut?"

>Last-minute payments

The reality, of course, is that it could be a lot worse.

As of last Monday, more than 4,400 properties remained on the foreclosure list. It dropped to about 3,600 by Thursday and to 2,900 by Friday, as property owners scrambled to make last-minute payments and save their properties.

"We're not excited about selling people's properties," said Assessment Commissioner Martin F. Kennedy. "It's very distasteful, but we have an obligation to do so. And it will present some real [buying] opportunities for individuals."

Kennedy is quick to point out that the higher number of properties this year -- the average for the past eight years is about 1,600 properties -- is due in part to the more than 1,300 properties that are "repeats," parcels that did not sell at last year's auction.

Some of the increase also can be traced to the city's decision a few years ago to add properties that are delinquent in paying garbage user fees and water bills. In the past, it was just overdue property taxes that led to foreclosure.

This year, the city decided not to include properties with newly delinquent water bill accounts.

Not surprisingly, the area of the city hardest hit by this latest wave of foreclosures is the East Side.

>East Side suffers most

An analysis by The Buffalo News of the last available foreclosure list Wednesday found 57 percent of the houses located in the Fillmore, Ellicott, University and Lovejoy districts.

By far, the largest number -- about one of every four properties -- was in neighborhoods bordering Sycamore and Genesee streets and Fillmore and Bailey avenues.

While the East Side suffered more than any other area of the city, no section of the city was left untouched by the foreclosures.

The West Side, for example, had more than 300 properties on the list. Even middle-class North Buffalo and South Buffalo had some.

When the auction begins this week -- it runs today through Wednesday -- the list of available properties will be appreciably smaller than it was just a week ago.

City attorneys held five days of help sessions in the Erie County Courthouse last week to assist delinquent owners in devising payment plans and obtaining court orders to prevent their homes from being auctioned off.

The city also is taking steps to improve the processing of last-minute property tax payments. Owners can pay off their taxes right up to the point before the house is sold.

When the sale begins today, a new high-tech system will be in place for the first time that will allow tax workers in City Hall to communicate with auction officials via computer.

The city, in the past, relied on phone communication that could cause delays in notifying auction staffers that a property should be removed from the selling block.

"The whole idea," said Kennedy, "is to create less confusion for property owners and provide a communications link that can pass along information almost instantaneously."

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