Denison launches program to clear complex deeds
The city of Denison has a new tool to help bring development to infill lots across the city.
The Denison City Council unanimously approved a new program this week that will allow the city to sell off its interest in liens against infill properties with the hopes of cleaning up title issues.
“We are very excited about this opportunity,” City Manager Jud Rex said. “It is a bit of a unique approach to helping generate more infill lots for redevelopment.”
This move represents the city’s latest effort to bring help encourage development of empty lots in established neighborhoods. About five years ago the city established its affordable housing program, which incentivized the construction of low-cost homes in these neighborhoods.
However, five years later, nearly all of the prime infill lots have been developed, which has left the city with harder to develop plots. Last month, the city launched a new initiative that would offer some flexibility to developers with infill lots that don’t meet current zoning standards or may be difficult to develop.
Rex said Monday’s decision expands on this approach by addressing another issue facing many of the remaining lots: title issues.
“As a bit of background, as you know, many of our infill lots remain undeveloped due to a number of issues, some of which are title related,” Rex said. “Many of these vacant properties have out-of-state ownership, owners who are unaware that they own the property or they are owned by multiple heirs to an estate.”
Many of the lots in question also have liens against them due to city mowing, demotion or taxes. While these traditionally could serve as a barrier for development, Rex said they provide an opportunity in this case.
“A lot of these lots are desirable, but there is no clear path to ownership to get them acquired and build on them,” he said.
Under the new program, the city will either assign or sell its interest in the lots to private developers. In doing so, the developer can then start foreclosure proceedings using that interest. The developer would then be able to acquire a clean title at the end of the process, Rex said.
“So, the taxpayers are made whole for what they are out to maintain the lots and those builders can foreclose on a property to clear up those title issues and then essentially take ownership of the property,” Rex said.
Under the terms of the program, a developer must start foreclosure within one year, and have pulled building permits within two years.
Rex said the majority of the liens are less than the value of the property. However, he said some liens of $10,000 or more do exist and are primarily tied to larger properties or demolitions.
“I think in those cases we are hoping to get as much as we can, so we are likely to take the highest bid in those cases,” Rex said.
Liens of $10,000 or more will be settled through public bid, while all others wil be resolved on a first come, first serve basis.
Michael Hutchins is the local government reporter for the Herald Democrat. He can be reached at firstname.lastname@example.org.