VACANT 

PROPERTIES 

Growing Number 

Increases 

Communities’ Costs 

and Challenges 

Report to the Ranking Member, 

Subcommittee on Regulatory Affairs, 

Stimulus Oversight, and Government 

Spending, Committee on Oversight and 

Government Reform, House of 

Representatives

November 2011 

GAO-12-34 

United States Government Accountability Office

GAO 
 United States Government Accountability Office 

Highlights of GAO-12-34, a report to the 

Ranking Member, Subcommittee on 

Regulatory Affairs, Stimulus Oversight, and 

Government Spending, Committee on 

Oversight and Government Reform, House of 

Representatives 

November 2011 

VACANT PROPERTIES 

Growing Number Increases Communities’ Costs and 

Challenges 

Why GAO Did This Study 

Vacant and unattended residential 

properties can attract crime, cause 

blight, and pose a threat to public 

safety. While homeowners or mortgage 

owners—including the mortgage 

servicers that administer loans on 

behalf of loan owners—are responsible 

for maintaining vacant properties with 

mortgages undergoing foreclosure, the 

costs local governments incur to 

mitigate any unsafe conditions can be 

significant. GAO was asked to examine 

(1) trends in the number of vacant 

properties and how they relate to the 

recent increase in foreclosures, (2) the 

types of costs that vacant properties 

create and who bears the responsibility 

for these properties and their costs, 

and (3) state and local government 

strategies to address vacant properties 

and the federal role in assisting these 

efforts. GAO analyzed Census Bureau 

vacancy data and data on property 

maintenance costs from the Federal 

Housing Administration (FHA) and two 

housing-related governmentsponsored enterprises (GSE). GAO 

conducted case studies in nine cities 

selected to provide a range of local 

economic and housing conditions, 

rates of foreclosure, and geographic 

locations. GAO also interviewed local 

officials, representatives of community 

development organizations, federal 

agencies, and mortgage servicers, 

among others. 

The Federal Reserve, Census, Office 

of Comptroller of the Currency, FHA, 

Federal Housing Finance Agency, and 

GSEs provided technical comments, 

which GAO incorporated as 

appropriate. Treasury commented that 

the report was informative and noted 

the need for all stakeholders to analyze 

policy responses to this issue. 

What GAO Found 

According to Census Bureau data, nonseasonal vacant properties have 

increased 51 percent nationally from nearly 7 million in 2000 to 10 million in April 

2010, with 10 states seeing increases of 70 percent or more. High foreclosure 

rates have contributed to the additional vacancies. Population declines in certain 

cities and high unemployment also may have contributed to increased vacancies. 

However, these data do not indicate the number of vacant properties that are 

inadequately maintained and imposing costs on local governments. 

Percentage Increase in Number of Vacant Properties (excluding seasonal use/migrant worker 

properties), 2000 to 2010

Sources: 2000 and 2010 Census data; map (MapInfo).

1% - 10%

11% - 20%

21% - 30%

31% - 40%

41% - 50%

More than 50%

If a homeowner abandons a property, servicers may have the right under typical 

mortgage agreements to conduct certain maintenance, although they generally 

are not obligated to do so until they assume ownership on behalf of the loan 

owner after foreclosure. In 2010, the GSEs reimbursed servicers or vendors over 

$953 million for property maintenance costs. However, local governments 

reported spending millions of dollars—including federal funds—on vacant 

properties that are not adequately maintained. For example, Detroit spent about 

$20 million since May 2009 to demolish almost 4,000 vacant properties. 

Unattended vacant properties produce public safety costs and lower 

communities’ tax revenues due to the decline in value of surrounding properties, 

with some studies finding that vacant foreclosed properties may have reduced 

prices of nearby homes by $8,600 to $17,000 per property in specific cities. 

Cities and states are implementing a variety of strategies to minimize the 

negative impacts of vacant properties but face various challenges. For example, 

some local governments are creating special entities called land banks that 

acquire and hold vacant properties for later development, sale, or demolition. 

However, difficulty obtaining adequate and sustained funding and finding buyers 

for the properties can hamper these local efforts. Some cities have passed 

ordinances that require servicers to notify the city when a property they are 

managing becomes vacant and attempt to hold them responsible for 

maintenance. However, localities often lack resources or staff to enforce these 

requirements fully. Some suggest fewer properties would become vacant if 

servicers had to account for communities’ costs—such as for policing and fires—

when considering whether to modify loans or foreclose, but servicers and others 

questioned the feasibility and effectiveness of such an approach. Local officials 

and community groups said they need more funds and increased oversight by 

federal regulators to ensure that servicers comply with local property 

maintenance codes. 

View GAO-12-34 or key components. 

For more information, contact Mathew J. Scirè 

at (202) 512-8678 or sciremj@gao.gov
Page i GAO-12-34 Vacant Properties 

Letter 1 

Background 3

More Properties Have Become Vacant in Recent Years, in Step with 

Increased Foreclosures and Unemployment 8

Improperly Maintained Vacant Properties Create Costs and Other 

Problems for Neighborhoods and Local Governments 27

State and Local Government Strategies to Address Vacant 

Properties Face Resource and Other Challenges 49

Agency Comments and Our Evaluation 78

Appendix I Objectives, Scope, and Methodology 80 

Appendix II U.S. Decennial Census Data on Residential Vacancies, 2000 

and 2010 85 

Appendix III Comments from the Department of the Treasury 95 

Appendix IV GAO Contact and Staff Acknowledgments 96

Tables 

Table 1: Census 2010 Vacancy Status Categories and Definitions 11

Table 2: Population in Selected Cities and Percentage Increase in 

Nonseasonal Vacancies, 2000 and 2010 26

Table 3: GSEs’ Reimbursements to Servicers and Payments to 

Vendors for Maintenance Costs Incurred Prior to and 

Following Foreclosure Sale, 2010 31

Table 4: FHA Reimbursement to Servicers and Contractors for 

Maintenance Costs Incurred Prior to and Following 

Conveyance, 2010 32

Table 5: Census Data on Vacant Residential Units, 2000 and 2010 86

Table 6: Number of Vacant Residential Units, 2010 Census 93

Contents 
Page ii GAO-12-34 Vacant Properties 

Figures 

Figure 1: Percentage Increase in Number of Nonseasonal 

Vacancies by State between 2000 and 2010 14

Figure 2: States with the Greatest Increase in Nonseasonal Vacant 

Units’ Share of Housing Stock, 2000 to 2010 15

Figure 3: Total Nonseasonal Vacant Properties in Selected Cities 

and Vacant Properties in the “Other Vacant” Census 

Category as a Percentage of Housing Stock, 2000 to 2010 17

Figure 4: The Change in Vacant Properties between 2000 and 2010, 

and Percentage of Loans in Foreclosure and 

Unemployment Rates as of December 2010, by State 21

Figure 5: Example Timeline of the Foreclosure Process and 

Potential Periods of Vacancy 23

Figure 6: GSEs’ Property Maintenance Costs Paid on Properties for 

Which They Assumed Ownership through Foreclosure, 

2010 33

Figure 7: Types and Amounts of FHA Property Maintenance Costs 

Paid to Contractors Post Conveyance, 2010 34

Figure 8: Examples of Vacant Properties in Chicago and Detroit 38

Figure 9: Damaged Property in Henderson, Nevada 39

Figure 10: A Row House Next to a Vacant Lot in Baltimore, 

Maryland 40

Figure 11: Demolition of a Single-family Property in Indio, 

California 41

Figure 12: Examples of Interior Conditions of Vacant Properties in 

Indio, California 44

Figure 13: Vacant Properties Near Recently Rehabilitated Homes in 

Chicago, as of 2011 56
Page iii GAO-12-34 Vacant Properties 

Abbreviations 

ACS American Community Survey 

CDBG Community Development Block Grant 

CDC community development corporation 

FDIC Federal Deposit Insurance Corporation 

FHA Federal Housing Administration 

FHFA Federal Housing Finance Agency 

GSE government-sponsored enterprise 

HAMP Home Affordable Modification Program 

HUD Department of Housing and Urban Development 

NEO CANDO Northeast Ohio Community and Neighborhood Data for 

 Organizing 

NPV net present value 

NSP Neighborhood Stabilization Program 

OCC Office of the Comptroller of the Currency 

REO real-estate owned 

USPS U.S. Postal Service 

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Page 1 GAO-12-34 Vacant Properties 

United States Government Accountability Office

Washington, DC 20548 

November 4, 2011 

The Honorable Dennis J. Kucinich 

Ranking Member 

Subcommittee on Regulatory Affairs, 

Stimulus Oversight, and Government Spending 

Committee on Oversight and Government Reform 

House of Representatives 

Dear Mr. Kucinich: 

During the continuing foreclosure crisis and economic downturn, 

increased numbers of vacant residential properties are becoming 

vandalized or dilapidated, attracting crime, and contributing to 

neighborhood decline in many communities across the country. Even 

though homeowners whose properties are being foreclosed upon may 

continue to occupy their properties until after a foreclosure sale occurs, 

many leave their homes during the foreclosure process. In addition, 

properties for which a new entity has assumed ownership through 

foreclosure may be vacant until the property is resold. If neither of these 

owners nor the mortgage servicer—the entity that manages mortgage 

loans and foreclosures on behalf of banks and other holders of mortgage 

loans—acts to maintain these vacant homes, these properties can 

deteriorate, increasing blight in the community. Unattended vacant 

properties can also increase costs for local governments that must 

expend resources to inspect the properties and mitigate any unsafe 

conditions, including demolishing some properties.1

Because of the impact of housing on the national and local economies, 

the federal government has attempted to address issues arising from the 

financial crisis that began in 2007 and its aftermath. As part of the 

Troubled Asset Relief Program created to restore stability and liquidity to 

the financial system, Congress called for the Department of the Treasury 

(Treasury) to preserve homeownership and protect home values.2

 In 

 

1

In this report, we generally refer to vacant properties as properties with unoccupied 

structures on them. 

2

The Troubled Asset Relief Program was authorized by the Emergency Economic 

Stabilization Act of 2008. Pub. L. No. 110-343, 122 Stat. 3765 (2008), codified at 12 

U.S.C. §§ 5201 et seq. 

 
 

Page 2 GAO-12-34 Vacant Properties 

addition, Congress created the Neighborhood Stabilization Program 

(NSP), which provides grants to states and local governments to help 

reduce the number of foreclosed and abandoned properties and restore 

depressed local housing markets.3

Your letter expressed concern over the costs that foreclosed and 

unattended vacant homes are creating for local communities and asked 

us to review the strategies state and local governments are using to 

address unattended vacant property problems and the challenges those 

governments face. Specifically, this report addresses (1) trends in the 

number of vacant properties and how they relate to the recent increase in 

foreclosures, (2) the types of costs that vacant properties create and who 

bears the responsibility for these properties and their costs, and (3) state 

and local government strategies for addressing vacant properties and the 

federal role in assisting these efforts. 

To address these objectives, we analyzed data on vacant residential 

housing units from the Census Bureau (Census) from 2000 to 2010, as 

well as from the U.S. Postal Service (USPS) as of the second quarter of 

2010. We also analyzed data on property maintenance costs from two 

housing-related government-sponsored enterprises (GSE)—Fannie Mae 

and Freddie Mac—and the Department of Housing and Urban 

Development’s Federal Housing Administration (FHA). We assessed the 

reliability of the data we used by reviewing past GAO and other 

assessments of the data and interviewing knowledgeable agency officials. 

We determined that these data were sufficiently reliable for use in the 

report. We also collected information about local strategies by reviewing 

literature and conducting case studies in nine localities that we selected 

based on high vacancy and foreclosure rates, geographic location, 

economic conditions, and foreclosure processes. These localities were 

Baltimore, Maryland; Cape Coral, Florida; Chicago, Illinois; Cleveland, 

Ohio; Detroit, Michigan; Indianapolis, Indiana; Indio, California; Las 

Vegas, Nevada; and Tucson, Arizona. In each location, we interviewed 

local government officials and representatives of nonprofit and community 

 

3

The first phase of this program, NSP 1, was authorized by the Housing and Economic 

Recovery Act of 2008, Pub. L. No. 110-289, 122 Stat. 2654 (2008), which provided $3.92 

billion in grant funds. The American Recovery and Reinvestment Act of 2009, Pub. L. No. 

111-5, 123 Stat. 115 (2009) provided an additional $2 billion in NSP funds (referred to as 

NSP 2) and changed several aspects of the program. Later, the Wall Street Reform and 

Consumer Protection Act, Pub. L. No. 111-203, 124 Stat. 1376 (2010) (Dodd-Frank Act), 

provided an additional $1 billion in funding for the program (referred to as NSP 3). 
 

Page 3 GAO-12-34 Vacant Properties 

development organizations. In addition, we interviewed code enforcement 

officials in two states that recently passed laws pertaining to maintenance 

of vacant properties in foreclosure—New York and New Jersey. We also 

interviewed staff from one of the largest maintenance companies that 

conducts property inspections and maintenance on behalf of services 

nationwide, academic researchers, GSE staff, and five mortgage 

servicers—including some of the largest firms and those that specialized 

in subprime loans. In addition, we interviewed representatives of federal 

agencies, including the Board of Governors of the Federal Reserve 

System (Federal Reserve), Census, Federal Deposit Insurance 

Corporation (FDIC), Office of the Comptroller of the Currency (OCC), 

Department of Housing and Urban Development (HUD), Federal Housing 

Finance Agency (FHFA), and Treasury. Appendix I contains more 

information about our objectives, scope, and methodology. 

We conducted this performance audit from November 2010 to November 

2011 in accordance with generally accepted government auditing 

standards. Those standards require that we plan and perform the audit to 

obtain sufficient, appropriate evidence to provide a reasonable basis for 

our findings and conclusions based on our audit objectives. We believe 

that the evidence obtained provides a reasonable basis for our findings 

and conclusions based on our audit objectives. 

Multiple entities have specific roles regarding mortgage loans and the 

maintenance of properties that experience foreclosure. When individuals 

purchase residential real property with borrowed funds, they usually enter 

into a contractual agreement, typically called a promissory note, in which 

they agree, among other things, to make principal and interest payments 

to the originating lender for a period of time and to maintain the property 

in order to prevent it from deteriorating or decreasing in value due to its 

condition. Borrowers usually also sign a mortgage or deed of trust that 

pledges the underlying property as collateral against the borrower’s 

default. The holders of these documents are allowed to record a lien 

against the property and are granted the right to seize, and usually sell, 

the property should the borrower fail to pay.4

 

4

A “holder” “is a person who has legal possession of a negotiable instrument and is 

entitled to receive payment on it.” Black’s Law Dictionary (9th ed., 2009). 

Background 
 

Page 4 GAO-12-34 Vacant Properties 

Institutions that originate home mortgage loans generally do not hold all 

such loans as assets on their balance sheets but instead sell them to 

other financial institutions or the GSEs, Fannie Mae or Freddie Mac, for 

the purpose of securitizing them.5

 Through securitization, the purchasers 

of these mortgages package them into pools and issue securities known 

as mortgage-backed securities for which the mortgage loans serve as 

collateral. In some cases, loans are purchased by financial institutions 

and issued as mortgage-backed securities to investors without any 

involvement of the GSEs or FHA in securitizations known as “private 

label.” In other cases, mortgage-backed securities are backed by pools of 

GSE loans or mortgage loans insured by federal agencies, such as FHA.6

Mortgage-backed securities pay interest and principal to their investors, 

which include other financial institutions, pension funds, or other 

institutional investors. The GSEs guarantee investors in their securities 

the timely payment of principal and interest. The Government National 

Mortgage Association (Ginnie Mae), a wholly owned government 

corporation, guarantees the timely payment of principal and interest on 

securities backed by federally insured or guaranteed loans. 

After a mortgage originator sells its loans to an investor or to an institution 

that will securitize them, another financial institution or other entity is 

appointed as the servicer to manage payment collections and other 

activities associated with these loans. Mortgage servicers, which can be 

large mortgage finance companies, commercial banks, or small specialty 

companies unaffiliated with a larger financial institution, earn a fee for 

 

5

Fannie Mae and Freddie Mac share a primary mission that has been to stabilize and 

assist the U.S. secondary mortgage market and facilitate the flow of mortgage credit. To 

accomplish this goal, the enterprises issue debt and stock and use the proceeds to 

purchase conventional mortgages that meet their underwriting standards, known as 

conforming mortgages, from primary mortgage lenders such as banks or thrifts. The 

enterprises hold some of the mortgages that they purchase in their portfolios. However, 

most of the mortgages are packaged into mortgage-backed securities, which are sold to 

investors in the secondary mortgage market. In September 2008, FHFA placed Fannie 

Mae and Freddie Mac into conservatorship out of concern that their deteriorating financial 

condition threatened the stability of financial markets. 

6

The FHA single-family mortgage insurance program insures private lenders against 

losses from borrower defaults on mortgages that meet FHA criteria. To support the 

program, FHA imposes up-front and annual mortgage insurance premiums on home 

buyers. Similarly, the Department of Veterans Affairs guaranty program allows mortgage 

lenders to extend loans to eligible veterans on favorable terms and provides lenders with 

substantial financial protections against the losses associated with extending such 

mortgages. 
 

Page 5 GAO-12-34 Vacant Properties 

acting as the servicer on behalf of the purchaser of the loans. Servicing 

duties can involve sending borrowers monthly account statements, 

answering customer-service inquiries, collecting monthly mortgage 

payments, maintaining escrow accounts for property taxes and hazard 

insurance, and forwarding proper payments to the mortgage owners. In 

the event that a borrower becomes delinquent on loan payments, 

servicers also initiate and conduct foreclosures in order to obtain the 

proceeds from the sale of the property on behalf of the owners of the 

loans. Servicers often contract with third-party vendors to conduct some 

of their responsibilities. For example, they may hire property maintenance 

companies to inspect and conduct maintenance on properties. The duties 

of servicers may vary based on the entity on whose behalf they are 

servicing the loans. For the loans they have purchased, Fannie Mae and 

Freddie Mac each have issued servicing guidelines that must be followed 

by entities servicing loans on their behalf. In addition, FHA has specific 

servicer guidelines for entities servicing FHA-insured loans. For loans that 

are in private-label securities, servicers’ duties are specified in a contract 

called a pooling and servicing agreement, which may place similar 

expectations on these servicers as the Fannie Mae or Freddie Mac 

standards. 

If a borrower defaults on a mortgage loan secured by the home, the 

mortgage holder is entitled to pursue foreclosure. Once the borrower is in 

default, the servicer must decide whether to pursue a home retention 

workout or foreclosure alternative, such as a short sale, or initiate 

foreclosure.7

 If the servicer determines that foreclosure is the most 

appropriate option, it follows one of two foreclosure methods, depending 

on state law. In a judicial foreclosure, a judge presides over the process 

in a court proceeding. Servicers initiate a formal foreclosure action by 

filing a lawsuit with a court. A nonjudicial foreclosure process takes place 

outside the courtroom, and is typically conducted by the trustee named in 

the deed of trust document. Trustees, and sometimes servicers, generally 

send a notice of default to the borrower and publish a notice of sale in 

area newspapers or legal publications. 

At a foreclosure sale or auction, if no third party has the winning bid, the 

servicer can obtain title to the property on behalf of the mortgage owner 

 

7

A short sale is a foreclosure alternative where the lender agrees to accept proceeds from 

the sale of the home to a third party even though the sales prices is less than the principal 

and accrued interest and other expenses owed. 
 

Page 6 GAO-12-34 Vacant Properties 

and sell it to repay the loan. Servicers transfer foreclosed properties, 

referred to as real-estate owned (REO) properties, from loans that were 

owned by the GSEs or insured by FHA to those entities within designated 

time periods following the foreclosure sale. The GSEs and FHA have 

contractors and other entities that manage the properties on their behalf 

during the postforeclosure period. Unless servicing agreements for loans 

in securitization trusts require the properties to be transferred to another 

party, servicers generally hold the remaining REO properties in their 

inventory and manage them until they are resold. Several states have 

enacted “redemption” laws that give borrowers the opportunity to match 

the winning bids from the foreclosure sale and reclaim their properties. 

After foreclosure sales and applicable redemption periods, servicers or 

entities working on behalf of the GSEs and FHA typically proceed with 

eviction proceedings if foreclosed properties are not already vacant and 

then market and sell the properties.8

Several federal agencies share responsibility for regulating the banking 

industry in relation to the origination and servicing of mortgage loans.9

Various agencies oversee federally and state-chartered banks and their 

mortgage-related subsidiaries depending on which agency granted the 

institution’s operating charter. At the federal level, OCC has authority to 

oversee nationally chartered banks and federally chartered savings 

associations, or thrifts, (including mortgage operating subsidiaries). The 

Federal Reserve oversees insured state-chartered banks that are 

members of the Federal Reserve, as well as holding companies for thrifts 

and any lenders owned by these companies. The Federal Reserve also 

has general authority over bank holding companies, including having 

responsibility for oversight of any nonbank subsidiaries of these 

companies that conduct mortgage servicing activities. FDIC oversees 

insured state-chartered banks that are not members of the Federal 

Reserve System and state-chartered thrifts. Both the Federal Reserve 

and FDIC share oversight with the state regulatory authority that 

chartered the bank. In addition, the Bureau of Consumer Financial 

 

8

According to a GSE representative, if a property is still occupied after the foreclosure sale 

and any redemption period are complete, servicers or entities working on behalf of the 

GSEs may assess the occupant for a rental program while the property is being marketed 

for sale or offer relocation assistance payments for the occupant’s voluntary cooperation 

in vacating the property. 

9

12 U.S.C. § 1813(q). 

Federal Agencies Involved 

in Overseeing Mortgage 

Servicers and Funding 

Housing Programs 
 

Page 7 GAO-12-34 Vacant Properties 

Protection has the authority to supervise mortgage servicers with respect 

to federal consumer financial law.10

Other agencies also are involved in overseeing certain aspects of U.S. 

mortgage markets but do not have supervisory authority over mortgage 

servicers. For example, FHFA has direct supervisory authority over 

Fannie Mae’s and Freddie Mac’s activities but does not have supervisory 

authority over servicers in general. The FHA oversees institutions 

approved to service loans that FHA insures for the servicers’ compliance 

with servicing regulations on, for example, the timing of foreclosure 

initiation. Similarly, Treasury has a contractual relationship with servicers 

that voluntarily participate in the Home Affordable Modification Program 

(HAMP), which is a program designed to help borrowers avoid 

foreclosure and stay in their homes by providing incentives for servicers 

to perform loan modifications. To oversee compliance with this program’s 

guidelines, Treasury can conduct reviews of participating servicers. 

The federal government also provides funding assistance to state and 

local governments for various housing-related activities, including for 

addressing issues related to vacant properties. NSP provides grants to 

states and local governments both to help reduce the number of 

foreclosed and abandoned properties and to restore depressed local 

housing markets. Since 2008, almost $7 billion has been authorized over 

the course of three phases. In each phase, grantees receiving NSP funds 

may use them directly or reallocate them to other entities within their 

states. Grantees must use funds for specifically defined eligible uses to 

address issues associated with foreclosed and abandoned properties. For 

example, grantees may choose to acquire and rehabilitate properties for 

rental or resale or demolish blighted structures. Participants must also 

follow several key requirements governing the use of NSP funds, such as 

using the funds in “areas of greatest need” within specified time frames 

and using a certain percentage of funds to benefit low-income 

households. Another program administered by HUD, the Community 

Development Block Grant (CDBG) program, provides grants to localities 

for 26 eligible activities, including acquisition, administration and planning, 

economic development, housing, public improvements, and public 

 

10“Federal consumer financial law” is a defined term in the Dodd-Frank Act that includes 

over a dozen existing federal consumer protection laws, including the Truth in Lending 

Act, the Real Estate Settlement Procedures Act, and the Equal Credit Opportunity Act, as 

well as title X of the Dodd-Frank Act itself. 12 U.S.C. § 5481(12), (14). 
 

Page 8 GAO-12-34 Vacant Properties 

services, among others. For example, CDBG funds could be used to 

rehabilitate single-family residential properties. 

Some federal agencies compile data on the number of vacant properties 

in the United States, but using these data to identify unattended vacant 

properties—that is, properties that are not being maintained and therefore 

impose costs on the surrounding community—is difficult. The sources of 

national vacancy data available from federal agencies include two 

different collection efforts by Census and data that the USPS compiles on 

vacant addresses.11 The decennial census is intended to make a 

complete count of the nation’s population and includes questions about 

housing characteristics such as the total number of occupied and vacant 

properties. The 2000 and 2010 Census efforts took place over several 

months beginning in April of each year and recorded the status of vacant 

properties as of April 1, or Census Day. As part of the 2010 Census, 

Census mailed questionnaires to more than 120 million housing units and 

conducted follow-up, door-to-door data collection for almost 47 million 

households that did not mail back the census forms.12 A second Census 

data collection effort that includes information on vacant properties is its 

American Community Survey (ACS), which it compiles through a survey 

of 3 million households throughout the year. The ACS data are reported 

 

11Other federal data collection efforts that include vacant property data are the 

Census/HUD American Housing Survey and the Current Population Survey/Housing 

Vacancy Survey, but these surveys did not collect the data at the geographic level or at 

the sample size needed for our study. 

12See GAO, 2010 Census: Data Collection Operations Were Generally Completed as 

Planned, but Long-standing Challenges Suggest Need for Fundamental Reforms,

GAO-11-193 (Washington, D.C.: Dec. 14, 2010). 

More Properties Have 

Become Vacant in 

Recent Years, in Step 

with Increased 

Foreclosures and 

Unemployment 

Various Entities Attempt to 

Count Vacant Properties 

but Determining 

Occupancy Status is 

Difficult 
 

Page 9 GAO-12-34 Vacant Properties 

on an annual basis and are also aggregated into 3-year and 5-year 

datasets. To collect the ACS data, Census mails a questionnaire to a 

sample of 3 million households and if surveys are not returned, it follows 

up by telephone if a valid telephone phone number exists. ACS field 

representatives also conduct door-to-door surveys of a subsample of the 

households that do not respond to either the mailing or telephone call. 

Another source of data on the number of vacant properties is compiled by 

USPS, which maintains a listing of properties that appear to be vacant 

based on observations by individual postal carriers. The USPS data may 

not immediately capture a vacant property as USPS does not record a 

property as vacant until at least 90 days have passed from when vacancy 

was first suspected. 

According to Census and USPS officials, and representatives of one local 

government, nongovernmental organization, and mortgage servicer, the 

primary difficulty in accurately determining the total number of vacant 

properties is identifying whether a property is truly vacant.13 Methods 

these entities use generally rely on physical inspection of property 

exteriors to identify indicators of vacancy, such as broken windows or 

broken/missing doors, high grass, or uncollected mail. In some cases, 

Census enumerators or other inspectors may obtain information about the 

occupancy status of a property from neighbors. Some methods that local 

government or nongovernmental staff also use include reviewing public 

utility (e.g., water, electricity) usage records as utility shutoffs or very low 

usage levels can indicate that a property may be vacant. Distinguishing 

the type of vacant property—for example, whether the property is a 

vacation home—can also be difficult using exterior inspection methods. 

Another limitation is that definitions or criteria used to determine vacancy 

can vary among data collection sources, making comparability of vacancy 

levels across different sources difficult. In addition, no comprehensive 

data are available about the duration that properties are vacant. Some 

properties may be permanently vacant, while others may be reoccupied 

after a period of time. Given these limitations, measurements of vacant 

 

13Various entities define the term “vacant” differently. For example, the decennial census 

defines a vacant housing unit as one in which no one is living on Census Day. The USPS 

defines a vacant address as an unoccupied address where mail has not been deliverable 

for 90 days or longer. One nongovernmental organization defined a vacant property as a 

site that poses a threat to public safety or one that owners neglect. Baltimore city’s 

building code defines “vacant” as “an unoccupied structure that is unsafe or unfit for 

human habitation or other authorized use.” (Building, Fire, and Related Codes of 

Baltimore City, Part II, §116.4.1, 2011, as last amended by Ord. 11-419). 
 

Page 10 GAO-12-34 Vacant Properties 

properties may be more useful as general indicators of the scale of the 

problem, as of the point in time a survey was taken, than as counts of the 

exact number of vacant properties. 

In addition, neither one of the available national data sources indicates 

who owns the vacant properties or whether or not they are being 

maintained, which would help identify unattended vacant properties that 

are likely to cause the most problems for local communities.14 Not all 

vacant properties place the same burden on local communities. The 

decennial census and the ACS data categorize vacant properties in a way 

that makes it possible to exclude from estimates some properties that are 

likely to be regularly maintained, such as vacation homes; properties for 

rent or for sale, or those that have recently been rented or sold, but not 

yet occupied; or those intended for migrant workers. A final category, 

“other vacant,” includes vacant properties about which the Census doorto-door surveyors did not find enough information to place in other 

categories (see table 1). According to Census officials, the “other vacant” 

category could include foreclosed properties that were being held off the 

market by the owner or were not visibly for sale or rent and may include 

unattended properties. This category could also include properties that 

fall into the other categories—for example properties that may have been 

sold or rented but are not occupied—however, Census surveyors did not 

have enough information to place them in those categories.15 Because 

Census staff have used these vacant property categories in several 

decennial censuses and as part of compiling the ACS survey, changes in 

various types of vacant properties can be tracked over time. 

 

14Census 2010 and USPS data also do not distinguish between single-family and 

multifamily residential units. 

15Census officials also stated that some properties, which the enumerators determined 

were “uninhabitable,” were deleted from the Census data on the national housing stock 

and were not counted as housing units. As a result, they were not categorized as either 

occupied or vacant. These properties generally were those that were severely deteriorated 

and were unlikely ever to be reoccupied, according to Census officials. 
 

Page 11 GAO-12-34 Vacant Properties 

Table 1: Census 2010 Vacancy Status Categories and Definitions 

According to 2010 Census technical documentation and interviews with Census officials, vacancy status and other characteristics of 

vacant units were determined by census enumerators obtaining information from landlords, owners, neighbors, rental agents, and 

others. Vacant units are subdivided according to their housing market classification as follows: 

For Rent or Sale—These are vacant units offered for rent and vacant units offered either for rent or for sale. 

Rented, Not Occupied—These are vacant units rented but not yet occupied, including units where money has been paid or agreed 

upon but the renter has not yet moved in. 

For Sale Only—These are vacant units being offered for sale only, including units in cooperatives and condominium projects if the 

individual units are offered for sale only. If units are offered either for rent or for sale, they are included in the “For Rent” 

classification. 

Sold, Not Occupied—These are vacant units sold but not yet occupied, including units that have been sold recently but into which 

the new owner has not yet moved. 

For Seasonal, Recreational, or Occasional Use—These are vacant units used or intended for use only in certain seasons or for 

weekends or other occasional use throughout the year. Seasonal units include those used for summer or winter sports or recreation, 

such as beach cottages and hunting cabins. Seasonal units also may include quarters for such workers as herders and loggers. 

Interval ownership units, sometimes called shared-ownership or time-sharing condominiums, also are included. 

For Migrant Workers—These include vacant units intended for occupancy by migrant workers employed in farm work during the 

crop season. (Work in a cannery, freezer plant, or food-processing plant is not farm work, according to Census). 

Other Vacant—If a vacant unit does not fall into any of the categories specified above, it is classified as “Other Vacant.” For 

example, this category includes units held for occupancy by a caretaker or janitor and units held for personal reasons of the owner. 

According to Census officials, the “other vacant” category could include foreclosed properties that were being held off the market by 

the owner or were not visibly for sale or rent and may include unattended properties. 

Source: Definitions of Subject Characteristics, U.S. Census Bureau, 2010 Census Summary File 1; interview of Census officials. 

USPS also maintains categories for residential and commercial 

addresses, but using these data to identify unattended vacant properties 

and track them over time is difficult. First, the Census data attempts to 

classify vacant residential properties into seven categories, whereas the 

USPS uses only two categories, one for vacant addresses and one 

category that includes vacant addresses and other types of occupied 

addresses, which it calls “no stat.” This “no stat” category contains 

properties that are under construction, demolished, blighted, or otherwise 

identified by a USPS delivery carrier as not likely to become an occupied 

address for some time. The category may also include occupied 

addresses, such as those behind gated communities. A HUD official and 

other governmental and nongovernmental housing experts told us they 

have used the USPS data on vacant addresses for analyses of vacant 

properties in localities around the country. In addition, the USPS data can 

provide useful updates in between the Census data collection periods. 
 

Page 12 GAO-12-34 Vacant Properties 

However, because USPS officials told us that they had changed their 

vacant address data collection processes after 2006 and made other 

changes to their address management database in September 2010, we 

were unable to use their data to assess trends in the number of vacant 

properties over time. Because Census data enables comparisons of 

vacant property data over time for similar categories of properties, we 

primarily used Census data for the purposes of this report. 

Our review of Census data indicates that the total estimated number of 

residential vacancies increased between 2000 and 2010. By analyzing 

the Census data sources, we estimated that the total number of vacant, 

residential housing units in the United States—excluding vacant units 

identified in the Census data as for seasonal use or use by migrant 

workers—increased 51 percent between 2000 and 2010, from nearly 7 

million to 10 million (See app. II).16 The decennial census also counted 

the total number of housing units, and our analysis found that the total 

number of residential units—the housing stock—in the United States 

increased by almost 14 percent during this period, from 116 million to 132 

million units. Based on these data, the number of nonseasonal vacant 

units as a share of the nation’s total housing stock increased from 6 

percent to 8 percent—a substantial increase, according to Census 

housing statistics officials we interviewed about the data. At the same 

time, the number of households increased about 11 percent, from 

approximately 105.5 million to just under 117 million. 

At the state level, the increase in the number of nonseasonal vacancies 

varied among states over the past decade, with some experiencing a 

larger increase in the number of vacant units than others (see fig. 1). Ten 

states experienced increases of 70 percent or more. The states with the 

largest percentage increases in nonseasonal vacant units over the last 

decade were Nevada (126 percent), Minnesota (100 percent), New 

Hampshire (99 percent), Arizona (92 percent), and Florida (90 percent). 

Census data show that these states also experienced increases in their 

 

16Our estimates of nonseasonal vacant units exclude vacant properties for seasonal use 

or for use by migrant workers because these are occupied for temporary periods of time, 

and we concluded that such properties are likely to be maintained. The total number of 

vacant properties in the United States, including all vacant properties identified in the 

Census data, increased 44 percent between 2000 and 2010, from 10 million to almost 15 

million. See appendix II for more details about the Census data. 

Available Census Data 

Show that Nonseasonal 

Vacant Properties 

Increased Significantly 

Between 2000 and 2010 
 

Page 13 GAO-12-34 Vacant Properties 

total housing stock over the decade. For example, in Nevada, the housing 

stock increased 42 percent between 2000 and 2010 and, in Florida, the 

housing stock increased 23 percent.17

 

17We compared the estimates from the 2010 Census data with USPS data on counts of 

vacant addresses by state for the second quarter of 2010. We found that 9 of the 10 

states with the largest number of vacant addresses according to the USPS data were also 

among the 10 states with the largest number of nonseasonal vacant housing units in the 

2010 Census data. Various reasons may explain why the USPS and Census data differ 

somewhat, including that the Census data includes short-term vacant properties that are 

for rent or for sale, while the USPS data includes only addresses where mail has not been 

deliverable for 90 days or longer. 
 

Page 14 GAO-12-34 Vacant Properties 

Figure 1: Percentage Increase in Number of Nonseasonal Vacancies by State between 2000 and 2010 

Note: These data exclude vacant units that the Census identified as for seasonal use or for use by 

migrant workers. 

Sources: 2000 and 2010 Census data; map (MapInfo).

1% - 10%

11% - 20%

21% - 30%

31% - 40%

41% - 50%

More than 50%

U.S. states with largest Increases in number 

of nonseasonal vacancies, 2000-2010

United States

1. Nevada

2. Minnesota

3. New Hampshire

4. Arizona

5. Florida

6. Georgia

7. Michigan

8. Colorado

9. Rhode Island

10. Massachusetts

6,820,324

59,485

64,656

15,976

145,261

480,193

224,335

213,247

77,087

18,411

84,444

10,314,979

134,619

129,169

31,844

278,671

910,167

420,852

394,881

137,541

32,699

145,388

51.2

126.3

99.8

99.3

91.8

89.5

87.6

85.2

78.4

77.6

72.2

%

Number of nonseasonal

vacant units

2000 2010

Percentage

change 

2000-2010
 

Page 15 GAO-12-34 Vacant Properties 

The Census data show that the nonseasonal vacant units’ percentage of 

the housing stock—the vacancy rate—also increased in many of these 

states between 2000 and 2010, as shown in figure 2. 

Figure 2: States with the Greatest Increase in Nonseasonal Vacant Units’ Share of 

Housing Stock, 2000 to 2010 

Note: Vacant units that Census identified as for seasonal use or for use by migrant workers are 

excluded. 

We also analyzed Census data at the city level and found that some cities 

in states with relatively large increases in the number of nonseasonal 

vacancies, such as Michigan and Ohio, generally also experienced 

increases in the number of nonseasonal vacant properties. The number 

of nonseasonal vacant units more than doubled in Detroit, Michigan, and 

increased 62 percent in Cleveland, Ohio. In both of these cities, 

nonseasonal vacant properties were already a larger share of the housing 

Sources: Census 2000 and 2010.

United States

New Hampshire

Minnesota

Michigan

Rhode Island

Massachusetts

Nevada

Florida

California

Georgia

Ohio

Arizona

Colorado

Illinois

Wisconsin

New Jersey

Indiana

Vermont

Connecticut

Tennessee

Virginia

1.

2.

3.

4.

5.

6.

7.

8.

9.

10.

11.

12.

13.

14.

15.

16.

17.

18.

19.

20.

5.9

2.9

3.1

5.0

4.2

3.2

7.2

6.6

3.9

6.8

6.1

6.6

4.3

5.4

4.1

4.1

6.4

3.6

4.4

6.9

5.2

7.8

5.2

5.5

8.7

7.1

5.2

11.5

10.1

5.8

10.3

9.1

9.8

6.2

7.8

5.8

5.7

8.9

4.9

5.9

9.2

6.8

33.1

77.4

75.8

73.0

68.6

60.8

59.5

54.0

50.7

50.6

49.8

47.6

45.8

44.2

42.2

39.5

38.4

36.0

33.5

31.8

31.4

Nonseasonal vacant properties as a percentage of 

total housing stock (vacancy rate)

Percentage increase 

in vacancy rate

2000

2010
 

Page 16 GAO-12-34 Vacant Properties 

stock in 2000 than most of the other cities we examined—vacant 

properties made up 10 percent of the total housing stock in Detroit and 11 

percent of the total housing stock in Cleveland in the 2000 Census. By 

the 2010 Census, those percentages had increased to 23 percent in 

Detroit and 19 percent in Cleveland. Similarly, the number of nonseasonal 

vacancies, as a share of the total housing stock, nearly doubled from 6 

percent to just under 12 percent in Las Vegas. 

Local government officials and community group representatives told us 

that distinguishing among different types of vacant properties is important 

to be able to identify the number of properties that are likely to impose 

costs on the community. As we noted above, the Census vacancy status 

categories can be useful in identifying some vacant properties, such as 

those in the “other vacant” category, that may be more likely to be 

unattended and so might burden local governments as opposed to those 

that are likely to be maintained, such as those that are for seasonal use. 

For example, prior to the surge in foreclosures of the second half of the 

decade, Baltimore, Cleveland, and Detroit all had large numbers of 

properties in the category “other vacant” in 2000 relative to the other cities 

we examined. However, these cities also still saw increases in both the 

overall nonseasonal number of vacant properties and the share of 

properties in the “other vacant” category as a percentage of their total 

housing stock by 2010. In addition, Cape Coral, Florida, experienced a 

large increase in nonseasonal vacant properties between 2000 and 

2010—from about 2,100 to more than 11,000. Moreover, the increase in 

the category “other vacant” from about 1 percent of the housing stock in 

2000 (433 properties) to 6.5 percent of the housing stock in 2010 (5,100 

properties) indicates that some of the increase in the overall number of 

vacant properties in that community may have been the result of 

overbuilding in that city. These data are corroborated by local Cape Coral 

officials, who told us that many vacant properties were unfinished or 

newly constructed properties. Census officials also told us that such 

newly completed or unfinished properties would be categorized as “other 

vacant” by Census door-to-door surveyors. Similarly, the number of “other 

vacant” properties increased 271 percent in Las Vegas, Nevada, from just 

under 1,900 in the 2000 Census to 7,000 in the 2010 Census. Figure 3 

shows the percentage of the total housing stock that was vacant (and not 

for seasonal use) in each time period in each city we studied, and the 

percentage of housing stock accounted for by properties categorized as 

“other vacant” in the Census data. The “other vacant” category does not 

necessarily capture all properties that may be unattended and imposing 

costs on communities. Vacant, foreclosed properties that are on the 

market for sale could also be vandalized or not well-maintained. 
 

Page 17 GAO-12-34 Vacant Properties 

Figure 3: Total Nonseasonal Vacant Properties in Selected Cities and Vacant Properties in the “Other Vacant” Census 

Category as a Percentage of Housing Stock, 2000 to 2010 

Note: Vacant units that Census identified as for seasonal use or for use by migrant workers are 

excluded from the data on total vacant units in these cities. 

Within cities, the extent to which properties are vacant can vary 

substantially across individual neighborhoods. Local officials and 

community representatives in Baltimore, Chicago, Cleveland, and 

Indianapolis stated that unattended vacant properties in those cities 

appear to be concentrated in economically distressed areas.18 Census 

data at the individual tract level—geographic divisions of 2,500 to 8,000 

people—appear to corroborate these statements. We reviewed Census 

2000 and 2010 tract-level statistics on vacant housing units in these cities 

as well as ACS data for the 2005 to 2009 period on the percentage of 

 

18Census vacancy data are also available at the level of individual street blocks. 

0

5

10

15

20

25

Tucson, AZ Indio, CA Cape Coral, FL Chicago, IL Indianapolis, IN Baltimore, MD Detroit, MI Las Vegas, NV Cleveland, OH

Vacancies as a percentage of total housing stock

City and state

Sources: GAO analysis of Census 2000 and 2010 data.

2000 2010 2000 2010 2000 2010 2000 2010 2000 2010 2000 2010 2000 2010 2000 2010 2000 2010

Nonseasonal vacant housing units as a share of total housing stock in that city

Vacant housing units in the “other vacant” Census category as a share of total housing stock in that city

6.3

1.3

9.1

1.9

7.5

2.8

11.6

3.9

8.8

2.5

12.1

4.6

13.7

7.0

15.4

7.7

10.1

4.5

22.6

11.6

6.4

1.0

11.9

2.9

11.3

3.8

19.1

8.8

5.1

1.7

9.0

1.6

4.5

1.0

14.5

6.5
 

Page 18 GAO-12-34 Vacant Properties 

households below the poverty threshold.19 This review found that the 

tracts with increases in the number of properties in the “other vacant” 

category between 2000 and 2010 were associated with higher levels of 

poverty, on average, in the ACS data. This pattern is consistent with our 

findings in our 2010 report on abandoned foreclosures, that found that 

abandoned foreclosures (when mortgage servicers start but do not 

complete the foreclosure process on a property), which tend to be vacant 

and unattended, are located in economically distressed areas.20 The 

Census statistics also show that the number of vacant properties in such 

cities as Cape Coral, which is in a state that experienced large increases 

in new residential construction during the housing boom, increased 

throughout the city, but the increases were larger in the Northeast area 

and other areas that were developed during the recent housing boom. 

Because developing precise counts of the number of vacant properties 

that are creating problems for communities using national data sources is 

difficult, various local governments and nongovernmental organizations 

have undertaken their own tabulations of the number of unattended or 

abandoned vacant properties in their areas. However, differences in data 

collection methodologies mean that they cannot be directly compared to 

national data. Baltimore’s code enforcement department tracks vacant 

properties through its code violation system, and officials stated that city 

housing inspectors have identified 16,000 long-term vacant properties—

many or most of which were vacant prior to the foreclosure crisis that 

began between 2005 and 2006—that the city considers unattended and 

blighted. Chicago’s Department of Buildings has a vacant buildings listing 

of 18,000 properties.21 The Department of Metropolitan Development in 

Indianapolis used a combination of data sources to estimate that the city 

and the county in which it resides had between 9,000 and 10,000 vacant, 

 

19As an additional way to assess the level of economic distress in localities, we analyzed 

ACS data for the 9 cities we studied for the period 2005 through 2009 (2010 poverty data 

were not yet available at the time we undertook this analysis) to identify the percentage of 

households in a given census tract with annual incomes below the appropriate poverty 

threshold for that household size and composition as defined by the Census Bureau. 

20GAO, Mortgage Foreclosures: Additional Mortgage Servicer Actions Could Help Reduce 

the Frequency and Impact of Abandoned Foreclosures, GAO-11-93 (Washington, D.C.: 

Nov. 15, 2010). 

21This estimate was developed by a local housing research organization using data from 

the city’s database. 
 

Page 19 GAO-12-34 Vacant Properties 

abandoned properties as of 2010.22 In Cleveland, the city’s code 

enforcement department conducts an annual door-to-door survey to count 

vacant properties, with its 2010 survey finding at least 7,000 vacant, 

distressed structures. In Detroit, a nongovernmental organization 

conducted a citywide survey of vacant properties and land, in which 

surveyors found that the city had approximately 67,000 vacant parcels as 

of 2009 and nearly 30,000 vacant single family homes. 

Local officials and representatives of community groups pointed to the 

recent large number of foreclosures, high unemployment levels and, in 

some cities, population declines as factors contributing to the recent 

increase in vacant properties that may cause problems in their areas. 

Local officials and community representatives in Detroit and Cleveland, 

for example, stated that the foreclosures that began to increase in their 

cities in 2005 and 2006, and that are continuing, have substantially 

increased the already large number of vacant properties in their cities. 

Officials in Tucson and those in the Las Vegas area stated that they did 

not have difficulty managing the vacant properties in their cities prior to 

the surge in foreclosures that began in 2006. Representatives of several 

community groups in Baltimore stated that foreclosures had contributed to 

the city’s overall vacancy problem, although city government officials 

stated that the city’s inventory of long-term, problem vacant properties 

was due more to population decline than a surge in foreclosures. 

Available data also indicate that high foreclosure rates are correlated to 

increased numbers of vacant properties. For example, states with high 

foreclosure rates in 2010, according to Mortgage Bankers Association 

data, also had relatively large increases in the numbers of vacancies as 

of April 2010, according to Census data (see fig. 4). Comprehensive data 

are not available on the number of properties in foreclosure that are 

vacant. However, representatives of some servicers and the GSEs told us 

that between 10 percent and 20 percent of the properties with loans in 

their portfolios are vacant at the time they initiate foreclosure; by the date 

of the completion of the foreclosure sale, they said, about 40 percent to 

50 percent of properties are vacant. As we previously reported, local and 

 

22To calculate its estimate of vacant, abandoned properties, the department used 

information including code enforcement orders for boarding up of vacant properties, 

relevant police and arson reports, undelivered mail, and property and tax information from 

the county land records. 

A Variety of Factors is 

Associated With the 

Increase in Vacant 

Properties 
 

Page 20 GAO-12-34 Vacant Properties 

state officials, community groups, and academics told us that borrowers 

may be confused about their rights to remain in their homes during 

foreclosure and vacate the home before the process is completed. 23 In 

addition, properties that have completed foreclosure generally become 

vacant prior to resale. According to representatives at HUD, for example, 

which had an inventory of 51,000 residential, single-family properties that 

it acquired as a result of foreclosures on FHA-insured loans at the end of 

fiscal year 2010, FHA-insured lenders are required to convey foreclosed 

properties to HUD unoccupied to facilitate resale. A nongovernmental 

organization in Chicago conducted additional surveys and research on 

the 18,000 properties in the Chicago Department of Buildings’ list of 

vacant buildings and found that about 13,000 were associated with a 

foreclosure between 2006 and the first half of 2010.24 Figure 4 indicates 

that many of the states with large increases in vacant properties between 

2000 and 2010 also had high unemployment rates as of December 2010, 

as well as a relatively large percentage of loans in foreclosure. Nine 

states ranked in the top 20 for all three indicators. 

 

23GAO-11-93. 

24Woodstock Institute, Left Behind: Troubled Foreclosed Properties and Servicer 

Accountability in Chicago (Chicago, IL, January 2011). 
 

Page 21 GAO-12-34 Vacant Properties 

Figure 4: The Change in Vacant Properties between 2000 and 2010, and Percentage of Loans in Foreclosure and 

Unemployment Rates as of December 2010, by State 

Note: This table shows the percentage change between 2000 and 2010 in the number of vacant 

properties, the unemployment rate (seasonally adjusted) as of December 2010, and the percentage 

of loans in foreclosure as of the end of the fourth quarter of 2010. The national percentage of loans in 

foreclosure includes Puerto Rico; the rankings do not. 

The length of the foreclosure process, from initiation of foreclosure to 

eventual resale and reoccupation, may also contribute to increased 

vacancy rates because borrowers may leave their properties during the 

process. In some cases, the longer a foreclosure takes, the more likely a 

property is to become vacant or remain so, according to community and 

servicer representatives (see fig. 5). Foreclosure timelines are affected by 

the type of procedures states use to conduct foreclosures. States 

Sources: Mortgage Bankers Association, Bureau of Labor Statistics, 2000 and 2010 Census.

Percentage of loans in foreclosure 

as of end of December 2010

Unemployment rate 

as of December 2010

Percentage change in 

Rank Rank Rank nonseasonal vacancies 2000-2010

51.2

126.3

99.8

99.3

91.8

89.5

87.6

85.2

78.4

77.6

72.2

68.8

60.8

60.6

56.3

53.8

52.8

52.5

52.2

52.0

50.8

% 4.64

10.12

3.09

2.73

5.68

14.21

3.56

4.27

2.52

4.19

3.28

4.48

3.64

4.95

6.53

3.59

4.78

2.56

2.03

2.53

4.18

%9.4 %

14.9

6.9

5.6

9.6

12.0

10.4

11.1

8.9

11.5

8.3

12.5

7.5

9.5

9.2

9.7

9.5

9.8

6.6

9.4

8.5

United States

Nevada

Minnesota

New Hampshire

Arizona

Florida

Georgia

Michigan

Colorado

Rhode Island

Massachusetts

California

Wisconsin

Ohio

Illinois

Idaho

Indiana

North Carolina

Virginia

Tennessee

Delaware

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

1

40

48

14

3

8

5

25

4

29

2

37

18

21

12

17

11

43

19

27

2

32

35

5

1

21

12

38

13

26

11

18

8

4

19

9

36

44

37

14

State ranked in the top 20 for all three indicators

State in the top 20 for this indicator

State is not in the top 20 for this indicator
 

Page 22 GAO-12-34 Vacant Properties 

generally follow one of two methods for their foreclosure process: judicial, 

with a judge presiding over the process in a court proceeding, or statutory 

(nonjudicial), with the process proceeding outside the courtroom in 

accordance with state law.25 A research study by Federal Reserve Board 

staff found that borrowers in nonjudicial states left their homes sooner 

after the start of the foreclosure process than borrowers in judicial 

states.26 States with judicial foreclosure processes, such as New York, 

New Jersey, and Florida, generally have longer foreclosure timelines; 

these longer timelines can contribute to foreclosure-related vacancy 

levels in those states because the longer the process takes, the more 

likely borrowers are to leave their homes. Redemption periods that allow 

borrowers time after foreclosure to pay to reclaim their homes can also 

prolong the time that a foreclosed property is vacant. According to 

information from an association of mortgage banking law firms, 

redemption periods range from 10 days in New Jersey to over 6 months 

in South Dakota. 

 

25According to HUD, as of July 2008, 25 states used a nonjudicial process as their normal 

method of foreclosure, 19 states use judicial, and 6 states use both. See GAO-11-93 for 

more information about these different processes. 

26The Post-Foreclosure Experience of U.S. Households. Raven Molloy and Hui Shan. 

Federal Reserve Board, Washington, D.C. May 2011. 
 

Page 23 GAO-12-34 Vacant Properties 

Figure 5: Example Timeline of the Foreclosure Process and Potential Periods of Vacancy 

No comprehensive data are available on the duration of the foreclosure 

process or the length of time a property that has completed foreclosure 

remains vacant before being reoccupied; however, available information 

from various sources indicates that the amount of time can be significant. 

For example, according to GSE data, the time between the date the 

servicer received the last mortgage payment, and the date of the 

foreclosure sale, ranged from 423 days on average from 2010 through 

the second quarter of 2011 to 453 days on average for the first 3 quarters 

of October 2011. These averages varied by state, ranging from just under 

a year in Michigan to around 2 years in New Jersey and Vermont). 

Recent events and legislative changes may have contributed to the length 

of these foreclosure timelines. According to one report, some states have 

extended the length of the foreclosure process in order to provide more 

opportunities for homeowners to avoid foreclosure in response to the 

2007 crisis. 27 In addition, we have previously reported that moratoriums 

on foreclosures due to improper foreclosure documentation problems at 

 

27James H. Carr and Michelle Mulcahey, Rebuilding Communities in Economic Distress: 

Local strategies to Sustain Homeownership, Reclaim Vacant Properties, and Promote 

Community-Based Employment. National Community Reinvestment Coalition 

(Washington, D.C.: October 2010).

Potential vacancy period

10%-20% are vacant

Sources: GAO (analysis); Art Explosion (images); U.S. Foreclosure Network and HUD (timelines); HUD, government-sponsored 

enterprises, and mortgage servicers (percentage of properties vacant at each stage of the foreclosure process).

Home occupied,

and original

owner makes

payments

Job loss

hardship

Nonjudicial process takes half this time

period on average (3 months/95 days)

Delinquency begins/

loss mitigation

Foreclosure

initiated

Foreclosure

judgment

Foreclosure

sale

Property

sold

Redemption period

BANK COURT

40%-50% are vacant Most are vacant

$ 2 months

(63 days)

4 months

(128 days)

6 months

(181 days)

3 months

(90 days)

3 months

(88 days)
 

Page 24 GAO-12-34 Vacant Properties 

several servicers in 2010, and resulting delays due to increased judicial 

demands, have stalled foreclosures in some states.28 Following the 

foreclosure sale, according to HUD data, HUD-owned properties spent an 

average of 181 days in HUD’s inventory in fiscal year 2010 before they 

were sold. In addition, a recent research paper by an economist at the 

Federal Reserve Bank of Cleveland found that in Cuyahoga County, 

Ohio, which encompasses Cleveland, homes sold through a foreclosure 

sale had high vacancy rates immediately thereafter and were more likely 

than homes sold through ordinary transactions to be vacant up to 60 

months after the foreclosure was completed.29

In the current environment, the length of time that a foreclosed home may 

be vacant has likely increased because overall housing demand is 

significantly lower than earlier in the decade as reflected in a variety of 

housing market indicators, according to government and academic 

analyses. For example, home sales have declined significantly in recent 

years, according to an analysis of two industry estimates, which 

estimated that home sales at the end of 2010 were significantly below 

2005 levels.30 Another indicator of low demand for housing is the decline 

in home prices, as reflected in two widely used indexes of house prices.31

These price indexes show that national house prices declined between 

2006-2007 and 2010.32 For example, according to a 2011 analysis of one 

index, house prices declined an estimated 29 percent nationwide 

 

28GAO-11-433. 

29Stephan Whitaker, Economic Commentary: Foreclosure-Related Vacancy Rates. 

Federal Reserve Bank of Cleveland, July 26, 2011. 

30CoreLogic, U.S. Housing and Mortgage Trends (February 2011). 

31As we have previously reported, house price appreciation or depreciation in a 

geographic area is commonly measured by changes in a house price index. See GAO, 

Loan Performance and Negative Home Equity in the Nonprime Mortgage Market,

GAO-10-146R (Washington, D.C.: Dec. 16, 2009). 

32The two indexes are the FHFA and S&P/Case-Shiller indexes. The FHFA index, which 

consists of separate indexes for 384 metropolitan areas, is based on sales and appraisal 

data for properties with mortgages purchased or securitized by Fannie Mae or Freddie 

Mac (conforming mortgages). To be eligible for purchase by these entities, loans (and 

borrowers receiving the loans) must meet specified requirements. The S&P/Case-Shiller 

national index, which is a composite of separate indexes for the nine regional Census 

divisions, is based on sales data for homes purchased with both conforming and 

nonconforming mortgages. 
 

Page 25 GAO-12-34 Vacant Properties 

between 2006 and October 2010.33 In addition, an academic research 

institute noted in a recent analysis that vacancy levels may be relatively 

high in part because the number of new households formed in the country 

appears to have been significantly lower over the 2005 to 2010 period 

than it was in the 2001 to 2005 period.34 Further, community 

representatives we interviewed in two cities noted that some residents 

cannot afford homeownership, or are not being approved for mortgage 

loans, no matter what the selling price. 

Recent economic conditions, including the high rate of unemployment, 

have contributed to an increase in foreclosures and a decrease in 

housing demand and, as a result, may be contributing to the increase in 

vacant properties and the length of time properties on the market remain 

vacant in some localities. Local officials and community groups in Cape 

Coral, Las Vegas, and Tucson, for example, stated that many property 

owners who have gone through foreclosure in the last 2 years cited 

unemployment as the reason that they were having trouble meeting their 

mortgage payments. As shown in figure 4 above, 9 of the 20 states with 

the greatest increases in vacant properties between 2000 and 2010 also 

were among the 20 states with the largest percentage of loans in 

foreclosure, and had unemployment rates that exceeded the national 

rate, as of the end of December 2010. Unemployed residents may be 

unable to afford mortgage payments, property maintenance and repair 

costs, and local property taxes, and may abandon a property as a result. 

Residents without mortgages may also be unable to pay maintenance 

costs. For example, one local official in Indianapolis stated that some 

vacant properties in that city were vacated by owners who, although they 

may not have had mortgages, were unable to pay local property taxes or 

afford the maintenance on their homes. 

Another factor that can increase the prevalence of vacant properties is 

the extent to which they are owned by investors rather than homeowners. 

Investors are frequent purchasers of foreclosed homes in certain cities, 

including Cape Coral, Cleveland, Las Vegas, and Tucson, according to 

local officials and community group representatives. Investors tend to try 

 

33Maureen F. Maitland and David M. Blitzer. S&P/Case-Shiller Home Price Indices 2010, 

A Year In Review. January 2011. 

34Joint Center for Housing Studies, State of the Nation’s Housing, 2011. Harvard 

University. 
 

Page 26 GAO-12-34 Vacant Properties 

to resell properties quickly or rent them out, according to some of these 

representatives. Some investors may not invest in the properties or 

respond to code violations if they will not be able to recoup their 

investments by renting or selling the properties. High foreclosures or poor 

economic conditions may affect the ability of investors to resell properties 

or to find qualified tenants who can pay rent. Investors may decide to 

leave properties vacant if they are unable to sell them or to rent them to a 

qualified tenant or may abandon them completely. Although 

comprehensive data are not available, HUD data indicate that about 

30,000 of the approximately 88,000 foreclosed HUD-owned properties 

sold in fiscal year 2010 were sold to investors, as opposed to owneroccupants. 

In certain cities, local officials also pointed to population declines as a 

contributing factor to increased vacancies. In Cleveland and Detroit, for 

example, the population has declined substantially over the past decade, 

according to Census data (see table 2). 

Table 2: Population in Selected Cities and Percentage Increase in Nonseasonal Vacancies, 2000 and 2010 

City 

Percentage increase in 

number of nonseasonal 

vacant properties, 2000-2010

Population 

2000

Population 

2010 

Population 

change Change (%)

Tucson, AZ 57.8 486,699 520,116 33,417 6.9

Indio, CA 200.6 49,116 76,036 26,920 54.8

Cape Coral, FL 455.4 102,286 154,305 52,019 50.9

Chicago, IL 60.2 2,896,016 2,695,598 -200,418 -6.9

Indianapolis, IN 48.8 781,870 820,445 38,575 4.9

Baltimore, MD 11.4 651,154 620,961 -30,193 -4.6

Detroit, MI 107.9 951,270 713,777 -237,493 -25.0

Las Vegas, NV 137.4 478,434 583,756 105,322 22.0

Cleveland, OH 62 478,403 396,815 -81,588 -17.1

Sources: Census 2000, 2010. 

The population in Cleveland declined by 17 percent between 2000 and 

2010, and the population of Detroit declined 25 percent. Community 

group representatives in Baltimore, another city with a decline in 

population, told us that these reductions in population have left fewer 

residents to maintain the existing supply of properties. Some of these 

properties are as much as 100 years old or require more maintenance. A 

community representative stated that these older houses are expensive 

to maintain and lack amenities such as garages. Some officials we spoke 
 

Page 27 GAO-12-34 Vacant Properties 

with in these cities stated that, for economic reasons, the populations of 

these cities were unlikely to increase in the future. As a result, the cities 

were likely to have many long-term vacant properties that would have to 

be demolished. 

Local governments and communities have various standards in place for 

property maintenance, but homes that become vacant can create 

problems for their communities if not properly maintained. Local 

governments have a wide array of building, housing, and property 

maintenance codes that establish standards for the appearance and 

safety of properties. For example, uniform building, fire, and property 

maintenance codes that have been implemented across the country 

contain special provisions for the maintenance of dangerous buildings—

those that pose threats to the public health, safety, and welfare, such as 

structural insecurity.35 Within local communities, code enforcement 

departments are largely responsible for helping ensure that homeowners 

maintain their properties in accordance with these codes. Code 

enforcement departments can typically issue fines for code violations or 

take actions themselves, such as making repairs, removing debris, 

covering windows and doors to secure properties, or even demolishing 

 

35The International Code Council is an association to help the building safety community 

and construction industry provide safe, sustainable and affordable construction through 

the development of codes and standards used in the design, build and compliance 

process. According to the International Code Council, 50 states and the District of 

Columbia have adopted these codes at the state or jurisdictional level. 

Improperly 

Maintained Vacant 

Properties Create 

Costs and Other 

Problems for 

Neighborhoods and 

Local Governments 

Local Standards Mandate 

Maintenance of Properties, 

but Concerns about Legal 

Barriers Can Limit 

Mortgage Servicers’ 

Maintenance Activities 
 

Page 28 GAO-12-34 Vacant Properties 

them, if needed, and bill the responsible party for the costs incurred.36

Although homeowners are expected to maintain their properties to 

prevent them from becoming hazardous or negatively impacting 

surrounding property values, they may vacate their homes during the 

foreclosure process and, if the properties are not properly maintained, 

they can create problems for their communities. In these cases, code 

enforcement departments may turn to other parties with an interest in the 

property, such as the mortgage holder or the mortgage servicer, to 

resolve the code violation. 

Servicer representatives and other industry participants said that although 

homeowners are responsible for maintaining their properties, the 

mortgage servicers that administer home loans, including initiating 

foreclosures if loans become delinquent, have the right, but not the 

obligation, to take on this responsibility for properties that are vacant 

during the foreclosure process. For example, they said that mortgage 

security agreements—which document that the home is the collateral for 

the home loan obligation and can be foreclosed upon and sold by the 

mortgage owner if the loan is not repaid—typically provide that the 

mortgage owner or the servicer contractually acting on the mortgage 

owner’s behalf has the right to take various actions intended to preserve 

the value of the collateral. In particular, many home loans are sold to the 

GSEs, Fannie Mae and Freddie Mac, and the uniform mortgage 

documents associated with these loans provide that whether or not a 

borrower is living in a property, the borrower is expected to maintain the 

property in order to prevent it from deteriorating or decreasing in value 

due to its condition. The GSE documents also state that if a borrower fails 

to maintain the property or abandons it, the servicer—acting on behalf of 

the mortgage owner—may do reasonable and appropriate maintenance 

to protect the lender’s interest in the property, such as securing it. GSE 

representatives said that this right to maintain a property is intended to 

allow the servicer to preserve the value of the property serving as the 

collateral for the loan as a way of maximizing the proceeds recovered 

through an eventual sale of the property to another party. According to 

the uniform GSE mortgage document, the types of maintenance that fall 

under this clause could include entering the property to make repairs, 

 

36Local homeowners’ associations also may have their own maintenance standards that 

property owners must follow and the associations or surrounding residents within a 

neighborhood sometimes expend resources on maintenance activities such as mowing 

lawns or removing trash when properties are left unattended. 
 

Page 29 GAO-12-34 Vacant Properties 

changing locks, replacing or boarding up doors and windows, draining 

water from pipes, eliminating building or other code violations or 

dangerous conditions, and having utilities turned on or off. Although 

servicers may take these actions under the mortgage document, they are 

not obligated to do so under GSE uniform mortgage documents. In 

addition, GSE officials indicated that some state trespass laws may 

contradict servicers’ rights to access a property for the purposes of 

preservation and protection under the mortgage documents and that this 

right has been challenged in court. 

For loans in foreclosure being serviced on behalf of the GSEs and FHA, 

servicer representatives said that they conduct maintenance on vacant 

and abandoned properties in accordance with those entities’ property 

preservation and protection guidelines. For example, the GSEs’ 

requirements for their servicers provide generally that servicers must be 

in compliance with local laws, such as local ordinances related to the 

maintenance of vacant and abandoned properties. Their guidance also 

provides that servicers should inspect properties as soon as they become 

aware they might be vacant and then every 30 days, or more frequently if 

the property is located in an area with a high rate of vandalism. In 

addition, they are expected to secure vacant properties to protect them 

from waste, damage, and vandalism and to protect their value. For 

example, the Fannie Mae servicing guidelines state that the servicer is 

responsible for performing all property maintenance functions, including 

mowing the grass, removing trash and other debris that violate applicable 

law or pose a health or safety hazard, and preparing the property for 

winter, among other things. Similarly, FHA guidelines require servicers to 

inspect vacant properties at least every 25 to 35 days, secure and protect 

the properties to prevent unauthorized entry, and protect against weatherrelated damage. FHA staff said that once properties are conveyed to the 

agency, they are inspected every 2 weeks. FHA also has specific 

guidelines on maintenance, such as how to secure properties by covering 

doors and windows with boards if needed, how often the grass should be 

cut, and what steps to take to prevent water pipes from freezing during 

winter months. 

Servicer representatives said that for loans they own or are servicing on 

behalf of a private securitization trust—which are organized by financial 

institutions rather than the GSEs and do not have a government 

guarantee—and sold to investors, they follow the pooling and servicing 
 

Page 30 GAO-12-34 Vacant Properties 

agreements of these trusts and their own policies.37 These agreements 

and policies largely call for them to take steps similar to those required by 

the GSEs and FHA to maintain properties. In addition, the servicers may 

have other policies they follow for these properties. For example, 

representatives of one servicer stated that the company recently 

implemented a policy to maintain properties “at or above community 

standards.” Staff of another servicer told us that their focus during the 

foreclosure period was on mitigating any public safety issues with the 

property, such as a gas leak, and on remaining in compliance with local 

codes on lawn maintenance. Servicer representatives generally said that 

their goal during the preforeclosure period was to keep properties secure 

and prevent further damage and code violations. 

Servicers that manage loans going through foreclosure on behalf of 

different loanholders incur various costs to maintain properties not 

otherwise being maintained by the homeowners. The owner or insurer of 

the loans typically reimburses servicers for most of these costs after the 

foreclosure process is completed. For example, table 3 shows the 

property maintenance costs incurred during the foreclosure process for 

which the GSEs reimbursed servicers in 2010.38 Our analysis shows that 

the vast majority of the costs were incurred following the foreclosure sale. 

Prior to the foreclosure, the GSEs reimbursed servicers $235 per 

property, on average, for maintenance-related expenses prior to the 

foreclosure sale. According to data from one of the GSEs, almost half of 

the expenses during the preforeclosure period were for yard maintenance 

and securing properties. 

 

37Securitization trusts have another entity that acts as trustee. Trustees keep records and 

receive mortgage payments from servicers and disperse them among investors according 

to the terms of the pooling and servicing agreement. In addition, trustees are the legal 

owners of record of the mortgage loans on behalf of the trust. Mortgage servicers 

administer the loans underlying mortgage-backed securities under contractual agreements 

with the securitization trustee, which acts on behalf of the owners of the securitization 

trust’s securities. Any legal action a servicer takes on behalf of the trust, such as 

foreclosure, generally may be brought in the name of the trustee. 

38Certain loans may be required to have private mortgage insurance, which covers a 

lender for certain losses related to the potential default of the loan. Insurance claims from 

private mortgage insurers may also include reimbursement to servicers for property 

maintenance expenses. 
 

Page 31 GAO-12-34 Vacant Properties 

Table 3: GSEs’ Reimbursements to Servicers and Payments to Vendors for 

Maintenance Costs Incurred Prior to and Following Foreclosure Sale, 2010 

Total 

properties

Total 

spent 

Average per 

property

2010 

Preforeclosure 482,901 $113,568,550 $235 

Postforeclosure 481,756 $839,973,900 $1,744 

Total 2010 NA $953,542,450 NA

Source: GAO analysis of GSE data. 

Note: The totals for the number of properties in each category represent the unique number of 

properties that moved into each category during the year. The numbers cannot be totaled because 

properties moved into and out of the categories during the year, may have been in both during the 

year, and may have spent different lengths of time in each category. 

Compared to the GSEs, FHA requires servicers to conduct additional 

maintenance, including removal of interior debris, to bring a property into 

“broom-swept” condition before transferring, or conveying, the property to 

the agency.39 This type of maintenance is typically done in the 

postforeclosure sale period on other properties. Therefore, FHA’s 

preconveyance reimbursements to servicers are higher than GSE 

preforeclosure reimbursements. As shown in table 4, FHA reimbursed 

servicers about $1,982 per property for maintenance-related expenses 

prior to conveyance to FHA in 2010.40 As discussed above, liability 

concerns associated with conducting maintenance during the 

preforeclosure period are a significant reason for this difference, 

according to GSE representatives. 

 

39According to HUD preservation and protection guidelines, at the time of conveyance to 

HUD, a property must be undamaged by fire, flood, earthquake, hurricane, tornado, or 

mortgagee neglect, as set forth in and required by 24 C.F.R. §203.378. For condominiums 

that were secured by mortgages insured under §234 of the National Housing Act, the 

property must also be undamaged by boiler explosion, as required by 24 C.F.R. § 

234.270. In addition, the property must be secured, the lawn maintained, winterized (as 

applicable), and interior and exterior debris must be removed with the property’s interior 

maintained in broom-swept condition. This includes the removal of any vehicles and 

removal of any personal property in accordance with local and state requirements. 

40The data from FHA did not specify categories of expenses during the foreclosure period. 
 

Page 32 GAO-12-34 Vacant Properties 

Table 4: FHA Reimbursement to Servicers and Contractors for Maintenance Costs 

Incurred Prior to and Following Conveyance, 2010 

Total 

properties

Total 

spent 

Average per 

property

2010 

Preconveyance 89,214 $176,828,704 $1,982

Postconveyance 165,105 $38,568,420 $234 

Total 2010 NA $215,397,124 NA

Source: GAO analysis of FHA data. 

Note: The totals for the number of properties in each category represent the unique number of 

properties that moved into each category during the year, but cannot be totaled because properties 

moved into and out of the categories and some properties may have been in both during the year and 

may have spent different lengths of time in each category. In addition, the preconveyance total spent 

does not include subsequent adjustments of 1 to 5 percent due to file reviews. 

The states with the highest per property maintenance costs were 

generally those that follow a judicial foreclosure process, where a judge 

presides over the process in a court proceeding. Because of the 

additional legal work, foreclosure generally takes longer to complete in 

these states; therefore, maintenance may be more costly because it is 

required for longer periods of time. 

Following the foreclosure sale, ownership of a property transfers to the 

purchaser and, in some cases, servicers may no longer have 

responsibility for maintaining properties. Properties that servicers were 

managing on behalf of the GSEs are transferred to the GSEs if no third 

party steps in to purchase the home at the foreclosure sale. If a GSE 

purchases a property at foreclosure, commonly referred to as REO, the 

GSEs manage the maintenance, marketing, and subsequent sale of 

these properties. As shown in table 3, in 2010, the GSEs spent on 

average $1,744 per property and a total of $953 million for maintenance 

on REO properties.41 Most of the postforeclosure costs were for trash 

removal and yard maintenance (see fig. 6). 

 

41These figures may include costs for both vacant and occupied properties. GSE 

representatives told us that between 50 percent and 60 percent of properties are vacant at 

the start of the postforeclosure sale period, but by the end of the period all properties are 

vacant or an REO purchaser has agree to purchase the property while it is occupied. 
 

Page 33 GAO-12-34 Vacant Properties 

Figure 6: GSEs’ Property Maintenance Costs Paid on Properties for Which They 

Assumed Ownership through Foreclosure, 2010 

Note: Trash removal and cleaning costs may include initial property cleaning and automobile removal. 

Yard maintenance costs may include tree removal, snow removal, temporary sprinkler system. 

Servicers no longer have responsibility for maintaining properties that 

served as collateral for FHA-insured mortgages once they convey them to 

FHA following a foreclosure sale at which no third party purchases the 

home, and any state redemption period expires. Once servicers convey 

properties to FHA, the agency has management and marketing 

contractors that conduct property maintenance. In 2010, FHA reimbursed 

these contractors, on average, $234 per property and a total of about $38 

million for maintenance on REO properties (see table 4). Most of these 

expenses were for repairs, such as roofing, mold abatement, lead-based 

paint removal, and utilities (see fig. 7). 

30%

Boarding/securing ($50,077,806)

Repair, hazard, emergency repairs,

demolition ($52,016,070)

Utilities ($108,211,558)

Yard maintenance ($249,296,452)

Trash removal and cleaning ($296,357,249)

Inspection, vacant property registration,

35% and other costs ($84,014,674)

6%

6%

10%

13%

Source: GAO analysis of GSE data.
 

Page 34 GAO-12-34 Vacant Properties 

Figure 7: Types and Amounts of FHA Property Maintenance Costs Paid to 

Contractors Post Conveyance, 2010 

Note: Repair/Hazard/Emergency costs include lead paint removal and related costs, abatement of 

mold and damage resulting from a home being used to produce methamphetamine, roofing repairs, 

system checks and repairs, and other general or miscellaneous repairs. Other costs include costs for 

appliances, termite treatment, window or door bar removal, winterizing, and other miscellaneous 

costs. 

In cases in which servicers are administering a foreclosure of a loan that 

they own or are servicing on behalf of a private-label securitization trust, 

the servicers are obligated to maintain the property if it is not sold to a 

third party following a foreclosure sale because they become (or, in the 

case of a securitization trust are acting on behalf of) the new legal 

18%

30%

1% Demolition ($434,275)

1% Yard maintenance ($300,162)

1% Trash removal ($261,299)

0% Boarding/securing ($36,687)

Utilities ($6,891,193)

Repair/hazard/emergency 

costs ($19,101,650)

Other ($11,543,154)

49%

Source: GAO analysis of FHA data.
 

Page 35 GAO-12-34 Vacant Properties 

owner.42 When they take possession of a property after a foreclosure 

sale, servicer representatives reported that they may conduct work on the 

property beyond preservation and protection to increase its market value 

and therefore recover more proceeds from its subsequent sale. For 

example, in addition to the exterior maintenance activities, they may 

conduct more serious repairs, such as to the roof or foundation, as well 

as interior maintenance or other cosmetic changes, such as painting or 

replacing carpet and appliances. 

Though most of the servicers we interviewed told us they do their best to 

meet local requirements and acknowledged that their organizations had 

the right to act to preserve the collateral value of vacant properties on 

which they are initiating foreclosure proceedings, local government 

officials said that servicers may not be providing the levels of 

maintenance that communities expect in some cases. For example, 

servicers typically conduct periodic inspections of properties throughout 

the delinquency, foreclosure, and REO periods and may arrange for 

maintenance work, if necessary, as a result of inspectors’ observations. 

However, staff from one servicer noted that vandalism or other damage to 

a property could occur between these inspections. In addition, some 

servicer and GSE representatives told us that, prior to a foreclosure sale, 

servicers are reluctant to enter properties or conduct interior maintenance 

unless the problem would cause further deterioration of the property, such 

as a leaking water pipe, because they are not the owners and could be 

accused of trespassing or held liable for anything that was removed from 

the property.43 Further, because servicers are required under the GSE or 

HUD guidelines to seek approval for certain unusually expensive or 

complicated repairs that would cost more than specific dollar thresholds, 

they may not always act immediately to resolve such problems. Obtaining 

the necessary approvals to conduct work that exceeds the allowed 

amounts under the servicing guidelines can take time and, in some 

 

42According to one industry participant’s study, pooling and servicing agreements typically 

direct servicers to manage and dispose of REO properties according to any specific 

contractual requirements in the agreement, generally accepted servicing practices, and 

the requirements of local laws and regulations. Stergios Theologides, Servicing REO 

Properties: The Servicer’s Role and Incentives, REO & Vacant Properties, Strategies for 

Neighborhood Stabilization, a joint publication of the Federal Reserve Banks of Boston 

and Cleveland and the Federal Reserve Board (Sept. 1, 2010). 

43For example, according to staff from a property maintenance company, certain states 

may require servicers to obtain a court order before accessing a property in foreclosure or 

during the redemption period or they would be subject to trespassing. 
 

Page 36 GAO-12-34 Vacant Properties 

cases, such requests are denied. For example, according to HUD officials 

the agency considers federal laws and regulations to supercede local 

laws and ordinances. Therefore, while they said that foreclosed properties 

in the agency’s inventory are generally in compliance with local laws and 

ordinances, the agency may exercise its discretion to use less costly 

methods than the locality requires. Another reason servicers might not be 

maintaining properties in foreclosure up to the expectations of localities is 

that they have decided to abandon the foreclosure process on the 

property because the expected proceeds from the sale of the property 

would not cover the costs of foreclosure. Because a foreclosure sale 

never occurred on these properties, the borrowers remain the legal 

owners even though they may no longer live in the properties. In these 

abandoned foreclosure cases, representatives of four out of the five 

servicers we interviewed said they would not continue to incur costs for 

maintaining the properties.44 In a recent report, we found that abandoned 

foreclosures were particularly prevalent on low-value properties and in 

distressed urban areas such as Detroit, Chicago, Cleveland, and 

Indianapolis.45

Following a foreclosure sale, servicers also may be limited in their actions 

on a property despite local expectations because of any state redemption 

periods. In some states, the purchaser of a property does not have full 

rights to it immediately after the foreclosure sale. Some states allow 

borrowers additional time—called redemption periods— following the 

foreclosure sale to live in the home and pay off the remaining amount of 

the mortgage and foreclosure expenses. These redemption periods can 

last from 10 days to 6 months, depending on state laws, according to 

information from an association of mortgage servicing law firms. Because 

the previous homeowner could continue to occupy the home and may 

regain rights to the property by repaying the outstanding debt during 

these periods, servicers typically wait for the redemption period to expire 

before conducting any repairs or marketing a property for sale. However, 

 

44Representatives of one large servicer told us that as of July 2011, the company changed 

its policy to continue maintaining such properties in the interest of neighborhood 

stabilization. 

45See GAO-11-93. We noted in this report that the vast majority of abandoned 

foreclosures were loans that involved third-party investors and private label mortgagebacked securities. GSE-purchased loans account for a very small portion of our estimated 

number of abandoned foreclosures. Similarly, we found only about 0.3 percent of 

abandoned foreclosures were associated with FHA, VA, or Ginnie Mae insured loans. 
 

Page 37 GAO-12-34 Vacant Properties 

according to representatives of two servicers, they typically would 

conduct maintenance, such as cutting the grass, on a vacant property 

during the redemption period. 

When homeowners, entities that have assumed ownership of properties 

through foreclosure, or mortgage servicers do not maintain vacant 

properties, or when vacant properties are not maintained sufficiently to 

comply with local building or public safety standards, local governments 

expend millions of dollars in direct costs to mitigate the problems such 

properties may cause. As discussed earlier, many properties in 

foreclosure are vacant. For example, a recent study of vacant properties 

in Chicago found that 69 percent of the over 18,000 vacant properties 

registered with the city were associated with a foreclosure filed between 

2006 and the first half of 2010.46 In such cases, code enforcement 

departments may issue fines to homeowners or lien holders for code 

violations or bill them for work the city did to mitigate the violation. In other 

cases, an unattended vacant property may not have a mortgage or 

ownership may be unclear; therefore, the city likely would have to incur 

the cost of any work done on the property. For example, according to an 

official in the city of Newark, banks were responsible for only 15 to 20 

percent of the 400 buildings identified as vacant in 2007. 

According to local officials in the nine localities we analyzed, the local 

governments have incurred significant costs to address vacant properties 

within their communities. These costs were spent on tasks including 

boarding up and securing properties, mowing lawns, draining pools, and 

removing debris. Specific costs and amounts local government officials 

reported spending in 2010 include the following: 

 Exterior maintenance: Minimizing the negative or hazardous impact of 

vacant properties by boarding up and securing such properties can 

cost between $233 and $1,400 per property in some cities. Chicago 

officials estimated that they spent about $875,000 to board up 627 

properties in 2010. Detroit building officials estimated the cost of 

boarding up 6,000 structures since June 2010 at $1.4 million. Officials 

in several communities we studied also said they expended resources 

to mow uncut lawns, including about $300 per property in 

 

46Woodstock Institute, Left Behind. 

Unattended Vacant 

Properties Impose Costs 

on Local Governments and 

Communities and Reduce 

Revenues 
 

Page 38 GAO-12-34 Vacant Properties 

Indianapolis, although code enforcement department officials in Cape 

Coral noted they had eliminated some costs by enlisting community 

volunteers to mow the lawns of vacant properties. A Detroit official 

estimated that the city spends $25 per property for each lawn mowing 

on its 40,000 city-owned vacant lots and roughly 5,000 city-owned 

properties. Figure 8 shows examples of a boarded-up property in 

Chicago and an unsecured, vacant property in Detroit. 

Figure 8: Examples of Vacant Properties in Chicago and Detroit 

Figure 9 shows a fire-damaged property in Henderson, Nevada, in the 

Las Vegas area, on which foreclosure was pending as of August 2011. 

Source: GAO.

Vacant row houses in Chicago. A vacant, unattended property in Detroit, Michigan.
 

Page 39 GAO-12-34 Vacant Properties 

Figure 9: Damaged Property in Henderson, Nevada 

 Demolition: Demolishing structures was another significant expense 

that communities incurred to eliminate the impact of vacant properties. 

The amounts spent on demolition varied by region and type of 

property. Typical demolition costs of detached, single-family 

properties in some cities ranged from $4,800 to $7,000 per property, 

according to our interviews with local officials. Las Vegas officials said 

the range of demolition costs was large—from $2,000 to $20,000–

depending on the size of the property and the extent of lead-based 

paint or asbestos testing and removal needed on the property. 

Depending on the number of properties demolished, the total amounts 

spent in some cities were considerable. For example, Detroit has 

spent about $20 million demolishing almost 4,000 properties since 

May 2009—$5,000 per property. In Baltimore, local officials stated 

that their housing stock consists largely of single-family row houses, 

which are expensive to demolish individually. Row houses share walls 

in common, and demolishing one row house may require rebuilding 

the wall dividing the demolished property from one that remains 

Source: City of Henderson, Nevada.

A vacant property damaged by fire in Henderson, Nevada, near Las Vegas.
 

Page 40 GAO-12-34 Vacant Properties 

standing. In addition, several demolitions on a block can lead to what 

one housing expert called a “sawtooth” effect, with vacant lots 

alternating with occupied structures (see fig. 10). Baltimore officials 

estimated that an individual rowhouse could cost between $13,000 

and $40,000 to demolish, depending on the size and number of walls, 

and stated that demolishing a row of several houses at once was 

often more strategic, although doing so raised the overall cost of the 

demolition. 

Figure 10: A Row House Next to a Vacant Lot in Baltimore, Maryland 

In contrast, demolition of a single, freestanding structure may cost far 

less. Figure 11 shows the demolition of a single family, detached property 

in Indio, California, where the average cost to demolish a property was 

$7,000-$9,000. 

Source: GAO.

A row house next to a vacant lot in Baltimore, Maryland. Row houses share walls in common and 

demolishing a single row house may require rebuilding the shared wall, as shown here, which 

increases demolition costs. 
 

Page 41 GAO-12-34 Vacant Properties 

Figure 11: Demolition of a Single-family Property in Indio, California 

 Administrative and judicial costs: In addition to the costs of 

maintaining and demolishing vacant properties, local governments 

bear administrative costs of identifying parties responsible for vacant 

properties in order to assess code violation fines or liens. Code 

enforcement and other officials told us that it is often difficult to locate 

the owners of vacant properties because owners have left their 

homes; they also told us that it is difficult to locate current mortgage 

lien holders or servicers who may have an interest in maintaining the 

properties. Officials said that identifying lien holders is difficult 

because such parties often fail to record changes in ownership with 

local jurisdictions. As we previously reported, one code enforcement 

department official we interviewed allocates a full-time staff person to 

identifying parties responsible for vacant properties.47 Cities that have 

dedicated housing courts, such as Chicago and Cleveland, spend 

additional resources on enforcing laws governing vacant properties 

through the judicial system. According to a housing court judge in 

Cleveland, the budget for the city’s housing court is approximately $3 

million. 

Although some cities receive revenue from payment of code violations or 

liens, as well as from other sources including federal funds, that offset the 

costs of maintaining vacant properties, officials in most of the cities we 

studied said that they struggled to pay for these activities. As we 

previously reported, when local governments maintain or demolish 

 

47GAO-11-93. 

Source: City of Indio, California.

Before (left), during (middle), and after (right) photos of detached single-family property

demolition in Indio, California. 
 

Page 42 GAO-12-34 Vacant Properties 

properties, they may place liens against the properties for the associated 

costs.48 For example, Baltimore code enforcement officials stated that the 

city’s boarding and cleaning costs total about $2 million per year, though 

the city recoups most of this cost through liens placed on properties for 

these costs. Not all of the cities we interviewed, however, were successful 

in collecting on fines and liens. In Detroit, for example, an official stated 

that the city has submitted $16 million in bills for boarding and has 

received only $100,000 in payments. In addition to the difficulty recouping 

costs through the collection of fines, in some jurisdictions, liens may have 

low priority in the foreclosure process, so that other debts are paid from 

the sale of the house before the liens are paid. In one jurisdiction, code 

enforcement liens were wiped out when the foreclosure was completed. 

Further, revenue from code enforcement fines and liens may not be 

directly returned to code enforcement departments but deposited into the 

locality’s general fund. 

Further, revenue from code enforcement liens and federal and other 

sources together may be insufficient to pay for all of the necessary 

activities, particularly large-scale demolition. Officials in Baltimore, Detroit, 

and Chicago, in particular, stated that the resources required to demolish 

the large number of long-term vacant properties in those cities exceeds 

local budgets. Code enforcement officials in Detroit and Chicago stated 

that they would use federal funds for demolition. For example, Detroit 

received $21.3 million for demolition-related activities as part of that city’s 

NSP grants. As noted earlier, Detroit spent $20 million to demolish almost 

4,000 properties since May 2009, and the city had a backlog of 8,000 

dangerous buildings that were approved for demolition as of May 2011. A 

Detroit official said that the city generally demolished properties only as 

funding became available. Chicago planned to use $1.9 million from the 

city’s NSP funds for demolition. Chicago officials stated that all funding 

sources combined fall short of what is needed to fully address the vacant 

property problem. Baltimore officials estimated that the city would need 

approximately $180 million to demolish the inventory of unsafe, 

unattended properties in the city. One Detroit official stated that the city’s 

budget lacks sufficient resources to maintain the vacant properties for 

which the city itself has assumed ownership up to its own building 

standards. Reductions in local governments’ budgets may also be 

hindering efforts to carry out vacant-property-related enforcement 

 

48GAO-11-93. 
 

Page 43 GAO-12-34 Vacant Properties 

activities. In Cleveland, for example, the housing court’s budget is 

scheduled to be cut by more than 10 percent due to overall budget 

constraints. 

Vacant properties also produce other costs that can be difficult to quantify 

but also impose burdens on local governments and communities. For 

example, vacant properties can produce increased public safety costs 

related to code-enforcement, police, and fire services. Our past work and 

interviews with representatives in the localities we studied showed that 

vacant properties can be broken into and vandalized, illegally occupied, 

or used by people engaging in criminal activities, increasing the risk of 

fires or other public safety hazards. One code enforcement official in the 

Las Vegas area stated that between four and five calls per month are 

related to vacant property issues. Some academic studies also have 

found relationships between vacant or foreclosed properties and crime.49

In some cities, local representatives stated that vandalism can occur 

within 24 hours of a house becoming vacant. Officials from several cities 

stated that they had encountered houses that had been stripped of 

copper pipes or wiring or electrical systems or meters, air conditioning 

units or furnaces, and appliances, among other things (see fig. 12). A 

local government official in the Las Vegas area stated that illegal 

occupants in properties with utilities shut off could cause fires by using 

alternative energy sources, such as propane tanks or candles. To the 

extent that problems requiring the involvement of police, fire, or code 

enforcement officials occur on properties in between servicers’ routine 

monthly inspections, properties that are otherwise maintained can also 

impose increased costs on local governments. For example, one 

community representative in Detroit stated that vandalism can occur in 

both maintained and unattended properties. In addition, staff from a 

property maintenance company told us as part of work we conducted for 

our 2010 report, that in certain areas they had to resecure property at 

every monthly inspection because the properties were constantly broken 

 

49See, for example, William C. Apgar, Mark Duda, and Rochelle Nawrocki Gorey, The 

Municipal Cost of Foreclosures: A Chicago Case Study, Housing Finance Policy Research 

Paper 2005-1, Homeownership Preservation Foundation (Minneapolis, Minn.: 2005); 

Christiana McFarland, Casey Dawkins, and C. Theodore (Ted) Koebel, “Local Housing 

Conditions and Contexts: A Framework for Policy Making” (Washington: National League 

of Cities, 2007); and Dan Immergluck and Geoff Smith, “The Impact of Single-family 

Mortgage Foreclosures on Neighborhood Crime,” Housing Studies 21, no. 6 (2006): 851-

866. 
 

Page 44 GAO-12-34 Vacant Properties 

into and vandalized.50 Measuring the effect of increases in public safety 

costs as a result of unattended vacant properties is difficult, however, 

because different city departments are often involved, and many localities 

do not routinely track which costs are related to vacant properties. 

Figure 12: Examples of Interior Conditions of Vacant Properties in Indio, California 

In addition to public safety costs, vacant properties reduce the values of 

surrounding properties. A number of research studies have attempted to 

quantify the effects of foreclosed and vacant properties on surrounding 

areas and found that foreclosed and vacant properties reduce values of 

neighboring occupied properties.51 A review by a federal research 

organization that examined several research papers on foreclosure 

 

50GAO-11-93. 

51See, for example, Brian A. Mikelbank, “Spatial Analysis of the Impact of Vacant, 

Abandoned and Foreclosed Properties,” study conducted for the Office of Community 

Affairs, Federal Reserve Bank of Cleveland, 2008; and Kai-yan Lee, “Foreclosure’s PriceDepressing Spillover Effects on Local Properties: A Literature Review,” Community Affairs 

Discussion Paper, Federal Reserve Bank of Boston (Boston: 2008). Each of the studies 

we reviewed focused on specific geographic locations, so their results cannot be 

generalized to the state level or the country as a whole. The studies also each also use 

data from different time periods and use different approaches. 

Source: City of Indio, California.

A stripped electrical box and graffiti inside a vacant property in Indio, California, in Riverside County. 
 

Page 45 GAO-12-34 Vacant Properties 

impacts estimated a foreclosed home within a neighborhood can depress 

the prices of nearby properties from 0.9 percent to up to 8.7 percent.52

Another study estimated that, on a single block in a Chicago 

neighborhood, one foreclosed, demolished property may have reduced 

the values of 13 surrounding properties by $17,000 per property 

compared with the median house price in Chicago.53 A recent study of the 

impact on sales prices of vacant, tax-delinquent, and foreclosed 

properties in Cuyahoga County, Ohio, between April 2010 and March 

2011 found that a vacant property within 500 feet of another property 

reduces that property’s price by approximately 0.7 percent.54 The study 

also found that a foreclosed, vacant, and tax-delinquent property reduces 

neighboring property prices by almost 10 percent. In addition, the study 

estimated the loss to home sellers attributable to nearby foreclosed, 

vacant, or tax delinquent properties and found that the total value lost is 

approximately $76 million, with $23 million of the loss attributable to 

properties that are both vacant and tax delinquent. Another study that 

examined the impact on sales prices of nearby foreclosed and vacant 

properties in Columbus, Ohio, found that each vacant property within 250 

feet of a nearby home could decrease its sales price by about 3.5 

percent.55 In addition, the study, which accounted for differences in 

neighborhood characteristics, found that the average sales price of 

properties located nearest to homes that had experienced both 

foreclosure and vacancy declined more than $8,600. Another analysis of 

the effects on property values in Flint, Michigan, found that a vacant 

 

52Kai-yan Lee. 

53William C. Apgar, Mark Duda, and Rochelle Nawrocki Gorey. 

54Stephan Whitaker and Thomas J. Fitzpatrick IV. The Impact of Vacant, Tax-Delinquent, 

and Foreclosed Property on Sales Prices of Neighboring Homes. Federal Reserve Bank 

of Cleveland, September 2011. 

55Brian A. Mikelbank. This study looked at the impact on sales price separating the effect 

of foreclosed properties and vacant/abandoned properties, and also accounting for 

neighborhood characteristics that could otherwise have distorted the results. The study 

also noted that the vacant properties were located close to the center of Columbus, Ohio, 

whereas the foreclosed properties were distributed more widely across the city. 
 

Page 46 GAO-12-34 Vacant Properties 

property could reduce the value of surrounding homes by approximately 

2.27 percent.56

Declines in property values associated with vacant properties and unpaid 

taxes on vacant properties can lead to reduced property tax revenue for 

local governments. According to the National League of Cities, local 

property tax revenues are determined by the value of residential and 

commercial property, based on property tax assessments that the 

localities conduct.57 As discussed earlier, property values have been 

declining nationwide in recent years, in part because of the large numbers 

of foreclosures and the decline in housing demand, which have 

depressed national house prices. As a result, local property tax revenues 

declined 2 percent in 2010 compared with 2009 levels and likely will 

decline further in the next few years as property tax assessments are 

adjusted to reflect falling property values, according to a 2011 National 

League of Cities survey of city finance officers from across the country.58

Lower property values might also affect the amount of unpaid taxes cities 

recoup from the sale of the property through the tax foreclosure process 

because the property value might be lower than the taxes owed.59 Local 

jurisdictions also sometimes directly lose tax revenue from unattended 

vacant properties when property taxes owed by the property owner go 

unpaid.60 Mortgage servicers typically assume property tax payments on 

properties during the mortgage foreclosure process, but if a vacant and 

 

56Nigel G. Griswold and Patricia E. Norris, Economic Impacts of Residential Property 

Abandonment and the Genesee County Land Bank in Flint, Michigan. Report #2007-05, 

MSU Land Policy Institute, (Lansing, MI: April 2007). 

57Christopher W. Hoene and Michael A. Pagano, Research Brief on America’s Cities, 

September 2011. National League of Cities. The National League of Cities works in a 

partnership with 49 state municipal leagues and serves as a resource to and an advocate 

for the more than 19,000 cities, villages, and towns it represents. 

58The report notes that a downturn in real estate prices may not be noticed for one to 

several years after an economic downturn began because property tax assessment cycles 

vary across jurisdictions: some reassess property annually, while others reassess every 

few years. 

59See Frank Alexander, “Tax Liens, Tax Sales, and Due Process,” 75 Ind. L. J. 747 

(2000). Vacant, abandoned properties with unpaid taxes may go through the jurisdiction’s 

tax foreclosure processes. These processes generally take the form of either property 

auctions or sales of the outstanding tax liens to private entities. The purchasers of tax 

liens may not pay property taxes in subsequent years or adequately maintain the property. 

60GAO-11-93. 
 

Page 47 GAO-12-34 Vacant Properties 

abandoned property does not have a mortgage, the city may lose tax 

revenue from that property if it cannot be recouped through the tax 

foreclosure process. Further, the city may end up assuming ownership of 

tax-foreclosed properties, many of which can be vacant, if no other party 

acquires the rights to them through the tax foreclosure process. In 2009, 

according to the Wayne County, Michigan, treasurer’s office, about 8,600 

properties went through the tax foreclosure process. Of those, 7,000 were 

not acquired by other parties and, thus, reverted back to the city of 

Detroit. The city will not receive tax revenue on these properties unless it 

can sell them to new owners. In addition, local jurisdictions lose the tax 

value of a property when a structure is demolished.61

Local officials we interviewed in several cities stated that property taxes 

are an important source of revenue and that recent declines in property 

tax revenues have led to reductions in government services.62 For 

example, local officials in several of the nine jurisdictions we studied 

stated that property tax revenue declines had led to budget cuts and staff 

reductions within their code enforcement departments. One jurisdiction 

provided information that showed that, in spite of increases in the housing 

stock in the area, housing price declines have resulted in its 2010 tax 

collections being equal to its 2006 levels, and an official from this 

jurisdiction stated that a recent effort to coordinate a response to vacant 

foreclosed properties was terminated because of budget constraints. An 

official in another jurisdiction stated that property tax revenue had 

declined between 6 percent and 8 percent in recent years. Community 

group representatives in a few cities stated that beyond code 

enforcement services, foreclosures and declining property tax revenues 

contributed to cuts of other local services, such as schools and 

recreational facilities. The National League of Cities report also noted that 

cities had cut personnel and city services such as public works, libraries, 

and parks and recreation programs as a result of property tax and other 

revenue declines. Further, a report on the costs of vacant properties in 

Ohio found that, because of lost tax revenues from vacant properties, the 

 

61GAO-11-93. 

62Officials in the city of Tucson stated that their revenues depend largely on sales taxes, 

though sales tax revenue has also declined as a result of the recent poor economic 

conditions. 
 

Page 48 GAO-12-34 Vacant Properties 

resources available to provide city services, in particular resources to 

school districts, were limited.63

The demand for and decline in availability of city services to deal with 

vacant properties can combine with rising numbers of vacancies to 

contribute to destabilizing communities, according to local community 

representatives. Community group representatives in Chicago, Detroit, 

Indianapolis, and Tucson stated that increases in vacant properties 

contributed to neighborhood decline because a vicious cycle is created in 

neighborhoods with rising numbers of foreclosed or vacant properties. 

Our previous work and interviews with community representatives 

indicated that because of the declines in values of homes surrounding 

vacant properties, neighbors living nearby may have difficulty refinancing 

their own homes and may go into foreclosure themselves, leaving 

additional properties vacant.64 Increases in crime related to vacant 

properties could also lead to greater population loss and difficulties in 

neighborhood revitalization strategies. Once a block or neighborhood 

contains a critical number of vacant properties, the loss of population is 

likely to continue, further undermining the investment in a community and 

reducing the revenue base to support local services in those 

neighborhoods. One local community representative stated that vacant 

property problems can tip a neighborhood into decline and contribute to a 

loss of neighborhood worth or spirit. 

 

63Community Research Partners, $60 Million and Counting: The cost of vacant and 

abandoned properties to eight Ohio cities (Columbus, OH: Feb. 2008). The study 

reviewed the magnitude and cost of vacant and abandoned properties in eight Ohio 

cities—Cleveland, Columbus, Dayton, Ironton, Lima, Springfield, Toledo, and Zanesville—

and found $49 million in cumulative lost property tax revenues to these local governments 

and school districts. 

64GAO-10-146R. 
 

Page 49 GAO-12-34 Vacant Properties 

The localities we studied are all engaged in multiple strategies to try to 

minimize the costs and other negative impacts that vacant properties 

create for their communities.65 The strategies they choose to implement 

are based on the conditions of the local real estate market and economy, 

as well as available resources, but their effectiveness is also affected by 

these factors. Efforts range from data-gathering efforts to more accurately 

identify vacant properties to acquisition and rehabilitation or, in some 

cases, demolition of abandoned properties. In addition, some localities 

have created additional responsibilities for servicers and others to 

maintain properties and have adjusted code enforcement regulations to 

create greater incentives for property maintenance, as well as 

establishing specialized housing courts to address vacant property and 

other housing issues. These local government strategies face various 

challenges, particularly the lack of sufficient financial and other resources 

to effectively address the large scale of the problem, which is 

exacerbated by the widespread declines in property tax revenues and 

housing market values, as discussed earlier. As result, governments in 

many of the communities we examined are reaching out to members of 

the community—including neighborhood groups and private developers—

in an attempt to leverage all available resources and increase their 

effectiveness. In addition, local governments have called for increased 

federal funding and greater attention by federal regulators to servicers’ 

role in managing vacant properties. 

Local officials are attempting to address problems associated with vacant 

properties by engaging in a wide variety of data-gathering efforts in order 

to understand the scope of vacant properties in their jurisdictions, as the 

following examples show: 

 Compiling and analyzing data from existing sources: Officials in three 

of the cities we reviewed told us they collect and analyze data from a 

variety of city departments—code enforcement, police, and fire—as 

well as statistics from the courts, such as foreclosure and related title 

information, in order to determine where vacant or potentially vacant 

properties are located. 

 

65While not a focus of this report, most of these localities are also engaged in foreclosure 

mitigation and prevention strategies. 

State and Local 

Government 

Strategies to Address 

Vacant Properties 

Face Resource and 

Other Challenges 

In-Depth Data-Gathering 

Helps Local Governments 

Effectively Target 

Resources 
 

Page 50 GAO-12-34 Vacant Properties 

 Independently collecting new data: In some cities, city leaders have 

involved staff or community members in data-collection efforts at the 

neighborhood level. As discussed earlier, in Cleveland, annually for 

the last 3 years, a team of city employees has walked street by street 

to count vacant and distressed properties, using standardized 

definitions and indicators of distress such as houses that are boarded 

up, open, or vandalized. Officials in Baltimore and Detroit hired a firm 

to create “market typologies” of various neighborhoods, pulling data 

from multiple sources—city departments, USPS, county assessor—in 

order to understand market strength in individual neighborhoods. 

Representatives from community organizations in Detroit and 

Indianapolis told us that volunteers collect real-time information on 

property conditions in their neighborhoods, compiling prioritized lists 

of houses that need either board-ups or rehabilitation investment. 

According to the community group in Detroit, those lists were then 

provided to the city to use in devising its board-up strategy. 

 Leveraging resources from local universities and research 

organizations: Some of the cities we studied have partnered or 

contracted with a local university or research organization to collect 

both existing data and new statistics. In Tucson, researchers from a 

local university conducted a survey of properties and structures (water 

systems, bus shelters) in five neighborhoods targeted to receive NSP 

funds in order to understand, among other things, the number and 

condition of vacant properties. At Case Western University in 

Cleveland, researchers developed and maintain a public website—the 

Northeast Ohio Community and Neighborhood Data for Organizing 

(NEO CANDO)—that houses social, demographic, and property data. 

The property data (going back to approximately 2000) were added 

beginning in 2005 specifically to help community development 

organizations and city leaders be more data driven. The data include 

property and lot characteristics, code enforcement actions, 

foreclosure filings, tax delinquencies, and sales transactions. NEO 

CANDO also has water department data on shutoffs, postal service 

data on vacancies, and information purchased from a proprietary real 

estate database, including the dates that adjustable rate mortgage 

loan interest rates will reset. According to a 2010 report on NEO 

CANDO and neighborhood stabilization efforts in Cleveland, officials 

from the city and local community organizations use and rely on the 
 

Page 51 GAO-12-34 Vacant Properties 

NEO CANDO data.66

These data—which can include more detailed information such as 

property condition and identity of the owner or responsible party, as well 

as aggregated neighborhood-level data, such as the number of homes 

with loans in default—enable more effective tracking of properties likely to 

cause problems, and can serve as an early warning system, so that 

issues can be addressed while they are still manageable, according to an 

organization involved in building local government capacity. However, in 

the nine localities we reviewed, most officials we spoke with had 

estimates but not precise data on the number and condition of vacant 

properties in their communities. 

Many city officials are using these data to target their resources to 

narrowly defined areas in order to maximize their investments rather than 

putting small amounts of funds toward a wide range of communities. For 

example, city officials in Baltimore, as part of its “Vacants to Value” 

campaign, used the data from the market typology research and proximity 

to other nearby redevelopment projects to identify housing markets in 

distressed areas and to target appropriate interventions. These markets 

are characterized by high concentrations of abandoned properties, many 

of which are owned by the city or are in tax arrears, but due to the 

adjacent development efforts, private developers are interested in 

rehabilitating some of these blocks. According to Baltimore officials, the 

city’s targeting of code enforcement efforts in these neighborhoods has 

assisted private developers and a local community development 

organization in acquiring properties for redevelopment and attracting 

investors in their projects. Similarly, Indianapolis and Cleveland officials 

told us they have targeted specific community areas that have strong 

ongoing community development and neighborhood organizations, with 

the capacity to support and bolster city investments. 

Although these data-collection and targeting efforts can help municipal 

leaders make decisions, they can be limited in certain ways. These efforts 

can help leaders make informed and strategic decisions about where to 

make investments and to prioritize projects and needs using objective 

criteria (such as number of vacancies per square mile) as opposed to 

 

66Enterprise Community Partners, Inc., Market Data-Driven Stabilization: A Case Study of 

Cleveland’s NEO CANDO Data System (Washington, D.C.: 2010).
 

Page 52 GAO-12-34 Vacant Properties 

relying solely on political factors. Specifically, city and community 

representatives told us that objective, reliable data on the numbers and 

locations of vacant properties are important to their efforts to design and 

target strategies to address the problems that vacant properties produce. 

For example, community organization members we spoke to in Baltimore 

supported the city’s new “market-based approach” and noted that it does 

not make economic sense to acquire or rehabilitate property when there 

is no private funding for development. However, data collection requires 

resources and continued updating since vacancies can occur rapidly due 

to continued foreclosures. Furthermore, information about vacant and 

abandoned properties typically must be assembled from various county 

and city offices, each of which may operate a unique data system. Datagathering efforts, such as door-to-door surveys, can be resource intensive 

and expensive. Also, some city officials we spoke with noted that 

politically, targeting resources to limited areas can be difficult. Local 

government officials in Detroit told us they plan on using their upcoming 

market research to bolster their arguments for targeting funds to fewer, 

smaller areas of the city instead of giving small amounts of funds to all 

neighborhoods. However, if resources go to one area, by default they are 

not going to others, and those communities may still be in need. 

To mitigate the damage caused by vacant properties, city officials and 

partner community organizations in eight of the nine cities we studied are 

engaged in efforts to acquire and rehabilitate such properties, often using 

federal funds. However, such efforts face declining home values, ongoing 

foreclosures, and sluggish economic conditions. In a typical acquisition 

and rehabilitation effort, a city acquires properties either through strategic 

purchase of foreclosed properties or by default as a result of no-sale at 

tax foreclosure. When feasible, these properties are then rehabilitated for 

a new owner or renter, usually by a community development corporation 

or similar organization. For example, in Cape Coral, Florida, the city 

purchased 82 foreclosed homes for rehabilitation and then used other 

funds for homebuyer assistance. In Indio, California, officials used $11.1 

million in NSP funds to purchase 58 foreclosed homes for rehabilitation 

and resale to first-time homebuyers. 

These types of city-led acquisition and rehabilitation efforts can help 

stabilize neighborhoods, because city leaders purchase properties with 

the goal of preserving communities. In contrast, some out-of-state 

investors, in an attempt to make a purchase and then quickly resell or 

“flip” properties, may undertake only minimal renovations so properties 

can be rented or resold to generate cash flow, according to some 

Property Acquisition and 

Rehabilitation Strategies 

Are Also Being Used to 

Address Vacant Properties 
 

Page 53 GAO-12-34 Vacant Properties 

community organization representatives we spoke with and a study from 

federal researchers. One way cities can acquire properties ahead of 

investors and help ensure they go to owners with potentially greater 

incentive to maintain them is through “first look” programs, which provide 

cities with the opportunity to purchase properties from foreclosing owners 

before they are publicly offered for sale. The National Community 

Stabilization Trust (the Trust), which was formed by various nationwide 

community groups, is a national organization that offers “first look” 

programs within targeted neighborhoods.67 As part of this program, the 

Trust maintains a database of foreclosed properties in targeted 

neighborhoods from lists provided by financial institutions. Cities and 

nonprofit organizations are given access to the listings before they 

become available for sale in the private market. The government and 

nonprofit officials are given 5 days to indicate whether they are interested 

in acquiring any of the homes. This “first look” window of review is offered 

only to cities and community development organizations, not the public or 

other investors. Both Tucson and Cape Coral officials purchased NSP 

properties through a “first look” program, and officials in Cape Coral said 

that obtaining the properties without the first look advantage would have 

been difficult, given the high level of investor interest in their community. 

Another advantage of city-led acquisition and rehabilitation efforts is that 

the city can target its resources to areas of greatest need or where they 

will have the most impact. Several of those we spoke with noted that 

acquisition and rehabilitation efforts are most successful when they 

concentrate their efforts in pockets of strength where there are other 

investments nearby. There are rarely sufficient funds and resources, they 

said, to rehabilitate a whole neighborhood, but a small area near other 

existing assets (retail district, school) can work. For example, in the latest 

round of NSP projects, Tucson officials focused their efforts in older, more 

established neighborhoods that were mixed use—having commercial and 

retail sites—and therefore might attract private market buyers and 

developers who are willing and interested in returning the properties to 

productive use. Finally, rehabilitating real estate that is newer is usually 

 

67The Trust is a national nonprofit organization formed in 2008 by four national 

organizations in the housing and community development field—Enterprise Community 

Partners, Housing Partnership Network, Local Initiatives Support Corporation, and 

NeighborWorks America. These four founding organizations were soon joined by the 

National Urban League and the National Council of La Raza as prominent sponsors of the 

Trust. 
 

Page 54 GAO-12-34 Vacant Properties 

more cost efficient because the costs and time needed for the work to 

update the property can be recouped sufficiently when it is resold. 

While many view acquisition and rehabilitation as a strong strategy to 

combat the problems of vacant properties, lack of capacity, poor property 

conditions, and the large volume of foreclosures complicate efforts at the 

local level as follows: 

 Lack of capacity: Officials and industry participants we spoke with 

noted that even with first look programs, government bodies do not 

always have the ability—including sufficient funds or expertise—to 

quickly complete real estate deals. Several city officials told us that, 

despite the importance of targeting a well-defined block or tract for 

redevelopment, they do not always have the ability to acquire 

sufficient numbers of properties within that area to make the 

investment worthwhile, and sometimes securing funding is difficult. 

For example, an official in Chicago told us that initially they had 

identified a block with 10 homes to rehabilitate for NSP. However, 

when they researched the properties’ ownership, they found that the 

city would be able to acquire at most half of those 10 properties 

because of the difficulty in obtaining clear title to some of them. For 

example, one property was still undergoing the foreclosure process; 

another was a “walkaway,” in which the lender had initiated but chose 

not to complete the foreclosure; and another had a “remote owner” 

who was difficult to reach. In addition, a study by Federal Reserve 

researchers noted that funding capacity constraints were preventing 

most community development organizations from redeveloping 

enough vacant homes to reverse the decline of neighborhood home 

values.68

 Poor property conditions: In addition, poor property conditions can 

make acquisition and rehabilitation efforts costly and challenging. 

Acquired properties may have been vacant for long periods of time 

and therefore may require substantial rehabilitation. This problem has 

worsened as housing market values have continued to decline. With 

costly rehabilitation and low housing values, governments, community 

development organizations, or investors may not be able to recoup 

 

68Daniel Fleischman, Nonprofit Strategies for Returning REO Properties to Effective Use, 

REO & Vacant Properties, Strategies for Neighborhood Stabilization, a joint publication of 

the Federal Reserve Banks of Boston and Cleveland and the Federal Reserve Board 

(Sept. 1, 2010). 
 

Page 55 GAO-12-34 Vacant Properties 

their costs for rehabilitating properties in poor condition by reselling 

them. For example, a community group representative from Baltimore 

said that 4 or 5 years ago, home values were high enough to support 

rehabilitation of properties in poor condition in some areas that 

bordered those in decline. Current values, however, do not support 

rehabilitation of such properties. 

 Volume of foreclosures: While many of the city officials we spoke with 

indicated that the NSP program and funds had been very beneficial, 

the scale of the foreclosure problem in some areas is such that they 

are not able to get ahead of the growing numbers of foreclosures and 

vacancies solely through acquisition programs. Two representatives 

from community development organizations noted instances where 

they were able purchase and renovate vacant properties on a block, 

but by the time those properties were ready to be put on the market 

for sale, additional properties on those blocks had become vacant, 

thus reducing the value and demand for the renovated properties. 

Furthermore, ongoing vacancies threaten the stability of 

neighborhoods since the declining values and board-ups make the 

area less attractive for current residents, potentially leading to further 

abandonment and decline. For example, on a tour of a Chicago 

neighborhood, we saw recently rehabilitated homes that were next 

door to or across the street from recent foreclosures, devaluing the 

worth the redeveloped properties, according to representatives of a 

community organization working in the neighborhood (see fig. 13). 
 

Page 56 GAO-12-34 Vacant Properties 

Figure 13: Vacant Properties Near Recently Rehabilitated Homes in Chicago, as of 2011 

Another challenge to acquisition and rehabilitation efforts is a lack of 

ready and willing buyers, so some communities have established special 

entities—known as land banks—to acquire and hold properties for later 

development. Finding sufficient buyers for rehabilitated homes can be 

very difficult, especially in markets with older housing stock and declining 

populations, such as Baltimore, Detroit, and Cleveland. In current 

economic conditions, fewer buyers qualify for financing, and even those 

that do may not be willing to make purchases now as the housing market 

has remained weak. Therefore, several jurisdictions work with or have 

established a land bank—typically a separate governmental or quasipublic entity—to acquire vacant, abandoned, and tax-delinquent 

properties for longer periods and then convert them to productive uses, 

including those other than housing, such as parks or other green spaces. 

Land banks acquire foreclosed properties held by banks, by the GSEs, or 

by federal and state agencies. For example, the Cuyahoga County Land 

Reutilization Corporation (commonly known as the Cuyahoga Land Bank) 

has an agreement with Fannie Mae in which the land bank receives all of 

Fannie Mae’s low-value properties—those appraised under $25,000—for 

$1, and Fannie Mae contributes approximately $3,500 per property 

toward demolition costs. A similar deal was struck with HUD, in which 

Boarded-up windows

Newly rehabilitated multifamily property (left) across the street from vacant and boarded-up homes 

(right). According to representatives from a Chicago community development organization, the vacant 

homes were constructed in the mid-2000s but were never sold due to the housing crisis. They have 

been vacant for approximately 5 years, and contribute to decreased value in the neighboring 

properties, including the recently rehabilitated property across the street.

Source: GAO.
 

Page 57 GAO-12-34 Vacant Properties 

HUD agreed to give the land bank a right of first refusal on the lowestvalue properties it disposes of. Currently the Cuyahoga Land Bank 

representatives said that the land bank receives 300 to 400 properties per 

year from both Fannie Mae and HUD. Land banks also can acquire real 

estate lost to tax foreclosure and may accept donated properties. For 

example, two large servicers recently established agreements with the 

Cuyahoga Land Bank to donate low-value properties and contribute funds 

toward demolition. 

In communities where properties are too damaged or too low-value to be 

sold or rented, land banks can provide a system that enables a strategic 

assessment of what to do with vacant and abandoned properties and how 

to deal with the carrying costs of these activities. Properties that end up in 

a land bank may be ones that have deteriorated and may have title issues 

and delinquent taxes, so the interested buyers may be speculative 

investors interested in quickly reselling the property at a profit.69 Land 

banks can break the cycle of properties moving from one investor to 

another who are not maintaining or improving the properties. According to 

a former city official in Indianapolis, land banks also facilitate partnerships 

between a city and nonprofit organizations. Once a community 

development corporation (CDC) decides to work in a neighborhood, it 

might not have enough funds to acquire a large number of properties, and 

it may be working in competition with speculative investors for properties. 

The land bank can hold properties, assuming the risks associated with 

land ownership, until CDCs have secured funding and are ready to 

proceed with redevelopment efforts. Likewise, industry experts, as well as 

officials and community group representatives we spoke with noted that a 

primary benefit of a land bank is that it can hold properties until the local 

market recovers. Lastly, land banks can help stabilize a neighborhood 

from further decline by either maintaining homes adequately for future 

development or demolishing properties as quickly as possible and tapping 

into other potential uses, such as urban gardens, parks, and other green 

spaces. For example, in Cleveland, a local faith-based organization paid 

for the demolition of an abandoned, foreclosed home on a lot next to its 

 

69In a recent speech, Elizabeth Duke, Member of the Board of Governors of the Federal 

Reserve System noted that, in some cases, properties are too damaged, or otherwise too 

low-value, to be sold as owner-occupied units or profitably converted to rental properties. 

She said that the Federal Reserve estimates about 5 percent of properties in the REO 

inventory of FHA and the GSEs are valued at less than $20,000. See Federal Reserve 

Board Policy Forum: The Housing Market Going Forward, Lessons Learned from the 

Recent Crisis (Washington, D.C.: Sept. 1, 2011). 
 

Page 58 GAO-12-34 Vacant Properties 

playground. The lot, owned by the Cuyahoga County Land Bank, was 

then donated to the organization, which planned to invest $25,000 to 

develop it as a green space and fill it with an amphitheater and native 

plants. A recent study about the land bank in Genesee County, Michigan, 

(discussed earlier in this report) showed that homes near vacant lots that 

had been created by the demolition of vacant properties increased in 

value.70 Similarly, another study of distressed housing in Cuyahoga 

County estimated that, given an average demolition cost of $7,500, 

demolishing 2,000 homes that are foreclosed and vacant, tax delinquent, 

or all three, would net $12 million in value, benefiting sellers of nearby 

homes and the county’s real property tax base.71

Land banks are not without their challenges, however. First, it could take 

time to successfully establish a land bank. According to a former land 

bank official in Indianapolis, land banks do not generate much revenue or 

make significant impacts overnight, and it takes a few years to establish a 

successful program. In some cases, localities may need to be granted the 

authority to begin a land bank by their state’s legislature, and passage of 

such legislation takes time, especially in states with part-time legislators. 

Second, land bank officials and experts agree that securing long-term 

stable funding for a land bank is critical. The Cuyahoga Land Bank’s 

primary funding comes from the county’s revenues from penalties and 

interest on property taxes and assessments that are not paid when due. 

In contrast, the land bank in Indianapolis lacks an established and 

ongoing mechanism for receiving funds from tax revenues and instead 

has been funded by proceeds from liens and fines, CDBG, and NSP. 

Finally, some city officials expressed concerns about another entity—be it 

the county or a separate quasi-governmental agency—having control 

over land within its boundaries. 

 

70Specifically, the study estimated that property values increased between $117 and 

$50,000 per property. Nigel G. Griswold and Patricia E. Norris.

71Stephan Whitaker and Thomas J. Fitzpatrick IV. 
 

Page 59 GAO-12-34 Vacant Properties 

City governments use housing and building codes, and related 

enforcement to oversee the safety of properties within their jurisdictions. 

With the increase of vacant properties in many communities, local 

governments are passing stronger property maintenance requirements 

and property registration ordinances aimed at increasing the responsibility 

of servicers to maintain properties during the foreclosure process. 

Similarly, two states, New Jersey and New York, recently passed laws 

requiring servicers to maintain properties in the foreclosure process. In 

addition, some jurisdictions have also established special housing courts 

to increase compliance with local building codes and property 

maintenance laws. Finally, some advocates and others have suggested 

that the costs of maintaining properties should be formally imposed on 

servicers, although the feasibility of such an approach is unknown, and it 

may have unintended consequences if implemented. 

Municipal housing and buildings department inspectors examine 

properties for compliance with local code requirements either during 

routine inspections or when they receive a complaint about a derelict or 

vacant property. If the property is in violation of the required standards, 

the enforcement agency issues a notice to the property owner and other 

responsible parties that lists the specific code violations or the nuisance 

conditions. According to a national community-building organization, code 

enforcement departments work on a complaint-driven basis, although 

some have designed more systematic inspection programs that target 

certain neighborhoods or violations with fines. For example, officials in 

Cleveland have established a code-enforcement partnership with local 

CDCs in which the CDCs help survey properties in each of the city’s 19 

wards and prioritize enforcement needs. Through this cooperative effort, 

the inspection program will cover the entire city for the first time, over a 3-

year period. Although the program is in early stages, its goal is to 

leverage the resources and neighborhood-level knowledge offered by the 

community organizations in order to prioritize properties in need of 

maintenance, condemnation, or demolition. Other city officials told us they 

file priority liens—which are claims on the property that must be paid 

before any monies owed to other lienholders are paid in the event of 

foreclosure—or other monetary penalties, which can be substantial and 

escalate over time.72 For example, Las Vegas code enforcement officials 

 

72The specific order in which liens must be paid in the event of foreclosure or sale varies 

depending on the jurisdiction. 

Laws, Local Ordinances 

and Dedicated Housing 

Courts Intended to 

Increase Accountability for 

Vacant Properties 

Code Enforcement and Liens 
 

Page 60 GAO-12-34 Vacant Properties 

told us that if they are unable to locate the servicer and they determine 

the property is vacant, they hire a contractor to perform the necessary 

maintenance and secure the property as needed at the city’s expense. 

The code enforcement officials then appear before the Las Vegas city 

council and obtain a lien for the amount of the abatement. The council 

can charge the servicer up to $500 per day in civil penalties, although 

past responsiveness of a servicer is taken into account when the council 

determines the total amount of fines due. Officials in some cities we 

spoke with said higher fines have resulted in more responsiveness from 

servicers. However, another city has moved in the opposite direction, 

away from liens and fines. For example, the city of Cape Coral enacted a 

lien-forgiveness policy, which forgives outstanding liens as long as the 

property comes into compliance with city building codes. Officials stated 

that if the city keeps the liens in place, the properties would be 

unmarketable given market-wide declines in property values. We heard 

similar views from a local official and an industry representative, who said 

that accumulated fines and related liens can complicate the eventual 

resale of property by encumbering the title. Similarly, in our past work, we 

found that heavy fines on already low-value properties may encourage 

servicers to abandon foreclosure, leaving the property vacant with no 

party responsible.73

Some we spoke with expressed a concern that cities’ enforcement efforts 

often have a “one size fits all” approach that does not reward those 

servicers who are cooperative and responsive to city demands. Currently, 

the greatest challenge to effective code enforcement in most communities 

is a lack of resources, according to local officials. As discussed earlier, 

officials we spoke with in several cities noted that they have recently 

experienced staff cuts in their code enforcement departments, and a 

shortage of inspectors can make code enforcement difficult. As discussed 

earlier in this report, officials in Cape Coral have recruited local volunteers 

to help with property maintenance, such as mowing overgrown lawns, 

while Cleveland officials are working with local community development 

corporations in an effort to expand available “eyes on the ground.” 

Furthermore, code enforcement officials told us locating the owners or 

current mortgage lien holders of abandoned foreclosures takes time and 

money. 

 

73GAO-11-93. 
 

Page 61 GAO-12-34 Vacant Properties 

Another action that some local governments are taking is to require 

servicers to register vacant properties. As previously discussed, one of 

the major challenges confronting code enforcement officials is identifying 

who is responsible for maintaining vacant properties. Vacant property 

registration requirements attempt to address this problem by requiring 

servicers to provide the city with specific contact information for each 

vacant property they service. According to a national firm that contracts 

with servicers to maintain properties, 439 jurisdictions have enacted 

vacant property registration ordinances as of September 2011. Although 

the requirements of these ordinances vary, researchers generally classify 

them into two types. The first type tracks all vacant and abandoned 

properties and their owners (regardless of whether or not there is a 

foreclosure action) by requiring the owner to provide the municipality with 

specific contact information. Among the cities we studied, Baltimore has 

implemented this type of registration requirement. In addition to requiring 

registration, some local governments have ordinances that also attempt 

to hold the lender or servicer responsible for maintenance of vacant 

properties during the foreclosure process. The cities of Cape Coral, Indio, 

and Chicago, for example, have implemented this second type of 

ordinance. Cities often impose a registration fee along with the 

requirement. In July 2011, Chicago’s City Council passed an amendment 

to its vacant property registration and maintenance ordinance, expanding 

the definition of “owner” to include any entity holding a mortgage on the 

property.74 The amended ordinance required servicers to pay for 

maintenance and upkeep on vacant properties before officially taking title 

through a foreclosure sale. Representatives from servicers and the GSEs, 

have expressed concern that the Chicago ordinance went too far in 

assigning responsibilities to servicers prior to the completion of the 

foreclosure because, as previously discussed, servicers are concerned 

about legal liability when conducting work on properties during this period. 

Specifically, representatives from one servicer said the law held the 

mortgagee responsible for a vacant property before foreclosure is 

initiated, or even if the customer is current on the loan. In October 2011, a 

committee of the Chicago City Council recommended removing the 

language more broadly defining “owner” from the ordinance. 

The states of New Jersey and New York have enacted statewide 

requirements that give cities the authority to hold servicers responsible for 

 

74Chicago, Ill, Municipal Code § 13-12-125, 135. 

Vacant Property Registration 

Requirements and Maintenance 

Laws 
 

Page 62 GAO-12-34 Vacant Properties 

maintenance of vacant properties during the foreclosure process.75 New 

Jersey’s law requires, among other things, that all servicers notify the 

clerk of the municipality in which the property is located each time they 

initiate a foreclosure proceeding on a residential property. That way, each 

municipality can create a database of all residential properties in 

foreclosure in the community. In the absence of these new notification 

requirements, servicers were only required to initiate a foreclosure action 

by filing at a central location in the state capitol, according to a senior 

state official responsible for compiling these notices. This official also said 

it would have been difficult for municipalities to track foreclosure filings on 

properties in their localities using the information filed with the state. The 

notices must contain contact information for an entity responsible for 

receiving complaints about property maintenance and code violations. If 

at any point after the foreclosure proceeding has begun the local 

government finds that the property has been abandoned by its owner, 

maintenance of the property would then become the responsibility of the 

servicer or other creditors. Similarly, the New York law requires, among 

other things, that servicers maintain abandoned properties until 

ownership is transferred after foreclosure. However, that responsibility 

begins at the point of foreclosure judgment when a judge grants a 

servicer the right to hold a foreclosure sale, which occurs anywhere from 

8 to 14 months after initiation of foreclosure in New York, according to a 

nonprofit association of mortgage banking law firms. Although the New 

York law (like New Jersey’s) authorizes municipalities to enforce the law 

against servicers that fail to maintain an abandoned property prior to a 

foreclosure sale, it does not require servicers to provide notification to 

local governments. Local housing and code compliance officials in 

Rochester, Buffalo, and New York City told us that absent such a 

notification requirement, they are not able to systematically monitor the 

issuance of foreclosure judgments. 

The contact information in vacant property registration systems can make 

it easier for local code enforcement officials to identify the parties 

responsible for abandoned foreclosures and to hold mortgage owners 

accountable for vacant properties, reducing the negative impact of these 

 

75See N.J. Stat. Ann. § 46:10B-51 (2010). The New Jersey requirements were included in 

the Mortgage Stabilization and Relief Act, 2008 N.J. Sess. Law Serv. Ch. 127 (West) and 

amended by the New Jersey Foreclosure Fairness Act, 2009 N.J. Sess. Law Serv. Ch. 

296 (West). See N.Y. Real Prop. Law § 1307 (2010). The New York requirements were 

effective April 14, 2010. 
 

Page 63 GAO-12-34 Vacant Properties 

properties on the community. For example, local officials we interviewed 

in one city with a vacant property registry said that more owners are 

complying with their city’s registry requirements due to increased fines 

and noted that the registry had been effective at providing contacts for 

officials to call to resolve code violations on vacant properties. Officials 

we spoke with in another city noted that because their ordinance requires 

certain levels of maintenance on properties, servicers have the needed 

incentive to keep up vacant properties to avoid incurring additional costs. 

They also said that servicers have been more cooperative and responsive 

since the registration and maintenance ordinances were passed. In 

addition, the fees generated by the registration requirements can help 

fund cities’ code enforcement programs. 

While vacant property registration systems can help local governments 

identify some owners, they might not capture all owners. Furthermore, 

local officials and industry representatives told us that cities lack 

adequate code enforcement and inspection staff to enforce fully the 

registration and maintenance requirements. For example, buildings 

department staff in Chicago noted that they do not check to see if a 

vacant property has been registered unless they are inspecting it already 

due to complaints. Several representatives from those cities in our study 

that do not have a registration system said there has been some local 

interest in starting one but cited lack of resources and staff as key 

impediments. Officials from the Las Vegas area said a strong local culture 

of property rights makes establishing a registration system politically 

infeasible. Representatives of mortgage servicers told us that it can be 

burdensome and costly to track and comply with the various standards 

and systems at the local level. Further, as previously discussed, servicers 

and other industry representatives we spoke to believe servicers’ 

authority to perform work on properties they did not yet own was limited 

during the foreclosure process. At the same time, most of the servicers 

we interviewed told us they do their best to meet local requirements and 

register vacant properties as required. 

A few jurisdictions across the country have established special housing 

courts devoted to building safety and code enforcement cases. Housing 

courts can devote their exclusive attention to complex cases involving 

substandard housing and abandoned buildings brought by the city 

prosecutor. For example, in Cleveland, the housing court includes 10 

housing specialists who work, at the judge’s direction, with property 

owners to correct the violations on their properties. According to the 

housing judge in Cleveland, the benefit of a specialized court is that he 

and his staff develop expertise in necessary areas, such as requirements 

Housing Courts 
 

Page 64 GAO-12-34 Vacant Properties 

related to ownership and transfer of title. Before Cleveland had a housing 

court, these cases rotated among 12 other judges in the municipal court; 

each judge may have used a different approach, and cases sometimes 

languished on their dockets. In contrast, the judge for the housing court 

has been able to develop specific approaches to common problems 

regarding property maintenance and disposition. Similarly, a Chicago 

judge we spoke with told us his focused work in the housing court has 

given him expertise on all available options in the local market, and this 

knowledge of the history of the entities and properties involved helps him 

make decisions about what is the best action based on the unique 

circumstances of each property. For example, he might assign a receiver 

for a relatively well-maintained multifamily property in a stable 

neighborhood because that property is worth preserving, but he would 

likely order a deteriorated wood frame house in a neighborhood that has 

a lot of other vacancies to be demolished. 

Another potential benefit of a housing court could be to expedite 

foreclosures on vacant properties. For example, the Chicago housing 

court is implementing a new plan for properties that are vacant, and for 

which the homeowner cannot be located. The judge would review the 

case and if provided with sufficient evidence that the owner cannot be 

located and has vacated the property, a judgment for foreclosure will be 

granted. These foreclosure cases would then proceed through the 

housing court rather than the general chancery court, where foreclosures 

are currently taking 18 to 24 months to complete, according to the 

Chicago housing judge we spoke with for this report. The goal of the 

program is to complete the foreclosure for these vacant properties in as 

little as 9 months, which would allow the servicer to transfer the property 

to an owner or entity more likely to preserve it, avoiding further vacancy 

and deterioration of the property. GSE representatives support the idea of 

expedited foreclosure, although they caution that the process for 

certifying that a property is vacant should not be onerous. In Colorado, a 

state law enacted in 2010 allows for an accelerated foreclosure process if 

a court is presented with evidence that a property is vacant. However, 

according to an attorney with a large Colorado law firm that represents 

most of the servicers in the state, Colorado’s law has only been used in a 

small number of foreclosures because servicer representatives feel that 

the vacancy certification process enumerated in the law, which requires at 
 

Page 65 GAO-12-34 Vacant Properties 

least two different types of proof of vacancy such as multiple broken 

windows and boarded-up doors, is cumbersome.76

However, while a housing court can provide resources and expertise to 

resolve vacant property cases, in some cases, establishing such a court 

may require legislation, as well as substantial resource investment.77

Even with a well-staffed and dedicated housing court, judicial proceedings 

still can be lengthy and costly, and depending on the responsiveness of 

the responsible party, vacancies and neglect may still persist. Due to 

lengthy court timelines, officials in Baltimore have begun a new approach 

to code enforcement that is intended to avoid litigation in most cases. In 

the past, litigation was required in every instance where a vacant building 

owner was noncompliant. Now Baltimore code enforcement officers can 

issue $900 citations (similar to parking tickets) so that the city goes to 

court only in cases of repeated offenses. 

Academics and advocates have suggested that another strategy for 

increasing servicer accountability and preventing negative impacts from 

vacancies is to have servicers acknowledge and account for the costs 

that vacant foreclosed properties bring to communities in the tools they 

use to help them make decisions about modifying a loan or foreclosing on 

it. These tools are financial models and calculations that generally use 

 

76Colo. Rev. Stat. § 38-38-901, et seq., which was effective as of August 1, 2010, 

authorizes an expedited foreclosure sale procedure if the mortgagee can document that 

the property is abandoned (vacant). A signed affidavit that is based upon the personal 

knowledge of the noteholder, their agent, the sheriff of the county in which the property is 

located, or a building inspector, or other municipal or county official having jurisdiction 

over the property is prima facie evidence of abandonment. The affidavit should state that 

the property is not actually occupied and that the signer has inspected the property more 

than once and each time determined that the property is abandoned and that at least two 

of the following facts exist: (1) windows or entrances to the property are boarded up or 

closed off, or multiple window panes are broken and unrepaired; (2) doors to the property 

are smashed through, broken off, unhinged or continuously unlocked; (3) gas, electric, 

and water service to the property have been terminated for a period of at least 30 days; 

(4) the police or sheriff’s office has received at least two reports of trespassers on the 

property, or of vandalism or other illegal acts being committed on the property; or (5) the 

property is deteriorating and is either below or is in imminent danger of falling below 

minimum local government standards for public safety and sanitation. The affidavit must 

also be accompanied by photographic or other documentary evidence such as police 

reports demonstrating of the cited conditions. The procedure is not applicable to judicial 

foreclosures. 

77The judge we spoke with in Chicago told us that the city established the housing court 

under its home rule authority granted to it by the state of Illinois. 

Servicer Accountability for 

Vacant Property Costs 
 

Page 66 GAO-12-34 Vacant Properties 

information about the borrower and the property to compare the expected 

financial benefit of taking one action over another. For example, the 

models servicers use to help them determine whether to offer a borrower 

a loan modification include factors such as the borrower’s income and 

monthly expenses, such as mortgage and insurance payments, as well as 

the location and value of the property to assess whether the expected 

cash flow for a modified loan is higher than the expected cash flow for no 

loan modification. If the result of this calculation is negative, then it 

generally is not financially beneficial for the servicer to modify the loan.78

Similarly, foreclosure decision-making models include factors such as 

projected property maintenance costs, the duration of the foreclosure 

process, expected time to resell the property, and the value of the 

property. If this calculation indicates that the projected proceeds from the 

eventual sale of the property exceed the projected costs by a certain 

amount, the servicer will proceed with foreclosure. According to some 

servicer representatives we interviewed, they do not explicitly take into 

account the costs that vacant foreclosed properties bring to communities 

in the models they use to help them decide whether to offer a loan 

modification to a borrower or to analyze whether foreclosure would be 

financially beneficial. One way this could be done is by requiring servicers 

to include vacant property costs to local governments—such as for police 

and fire services—in their models. 

A few industry participants and observers said that adding costs related to 

vacant properties into the decision-making models may encourage 

servicers to decide to conduct more loan modifications. Because 

maintaining a vacant property throughout foreclosure could be more 

costly under this proposal, loan modifications might seem more costeffective. Local officials told us that the high volume of continuing 

foreclosures makes it difficult to manage the resulting vacant properties. If 

more borrowers were approved for loan modifications, they would remain 

in their homes and prevent them from deteriorating; thus, localities would 

not have to expend as many resources on maintenance of vacant 

foreclosed properties. According to one study, any cost savings the city 

experiences could be used toward other local efforts to prevent 

foreclosures, among other things. Academics who support having 

servicers account for vacant property costs often being borne by 

 

78The results of the model are not the only factor determining whether a borrower will 

receive a loan modification. For example, borrowers might not be interested in a loan 

modification, even if approved. 
 

Page 67 GAO-12-34 Vacant Properties 

communities indicated that doing so would help all parties in the 

mortgage transaction understand the cost of these properties to local 

governments and ensure that each either pays a share or takes actions to 

reduce these costs. 

However, servicers, academics, and other industry stakeholders said that 

administering this proposal would be difficult. Determining the appropriate 

amount to add to the decision-making models to account for the 

community costs could be challenging, in part because of a lack of 

consistent data and the variation in local circumstances and property 

conditions. Some cities may have data that could be used to calculate the 

costs of vacant properties to the city. For example, a 2009 study used 

data from four city departments in Baltimore to calculate the cost of police 

and fire services associated with vacant properties.79 In addition, local 

officials in Chicago told us that they have a database that tracks property 

information such as building violations and court proceedings and flags 

properties that have been identified as vacant. They said that the police 

and fire departments also track their costs related to vacant properties. 

However, many localities do not routinely track which costs are related to 

vacant properties. In addition, data about these costs could be difficult to 

obtain because it comes from a variety of sources within a city, including 

legal offices, public works, housing, police, fire, building inspection, and 

code enforcement. Determining the appropriate amount to add to 

decision-making models to account for these costs is further complicated 

by the variation in what these costs may be across jurisdictions. Although 

a few studies have calculated the cost of vacant properties to particular 

cities, these estimates cannot be applied to all jurisdictions because local 

housing market and property conditions vary. For example, according to 

one study, the effects of vacant properties on neighborhoods vary widely 

among regions and within specific areas of a region.80

In addition, stakeholders were uncertain if this proposal would be effective 

and said it could have unintended consequences. According to some 

servicer representatives, explicitly adding additional costs to decision-

 

79Bob Winthrop and Rebecca Herr, Determining the Cost of Vacancies in Baltimore, 

Government Finance Review (June 2009). 

80Alan Mallach, REO Properties, Housing Markets, and the Shadow Inventory, REO and 

Vacant Properties, Strategies for Neighborhood Stabilization, a joint publication of the 

Federal Reserve Banks of Boston and Cleveland and the Federal Reserve Board (Sept. 1, 

2010). 
 

Page 68 GAO-12-34 Vacant Properties 

making models might not be effective at increasing loan modifications 

because borrowers can be denied for modifications for a number of 

reasons other than the decision-making model indicating that it is not 

financially beneficial to modify the loan. Our analysis of Treasury data 

from December 2010 shows that only 6 percent of denials for loan 

modifications through HAMP as of that date were due to the results of the 

decision-making model.81 More common causes of denials for HAMP loan 

modifications were because borrowers’ documentation was incomplete, 

the property was not owner-occupied, or the mortgage itself was 

ineligible.82 According to representatives from a few servicers, including 

additional costs might increase the number of modifications, but the 

borrowers might default again because they still do not have the ability to 

pay. Therefore, the proposal might not have the intended effect of 

preventing foreclosures and keeping homes occupied. Another reason 

servicers said the proposal might not effectively increase modifications is 

that their models already address some of the costs of vacant properties. 

Foreclosed properties generally sell for a lower price than other 

properties, so servicers reduce the amount they expect to earn from 

selling the property in their calculations. Thus, they said that the amount 

that property values have declined as a result of foreclosure is already a 

factor that they consider and that altering the decision-making model may 

not result in many additional loan modifications. Several servicers also 

said that they account for any factors the model might miss by approving 

borrowers who are within a certain threshold even if the model indicates 

that it would not be financially beneficial to modify the loan. Similarly, 

 

81The HAMP decision-making model—called the net present value (NPV) model—was 

developed by an interagency working group made up of officials from FDIC, Fannie Mae, 

Freddie Mac, FHFA, and Treasury. Servicers participating in HAMP use this model to 

decide whether to modify a loan. Servicers with at least a $40 billion servicing book may 

customize the NPV model for use in HAMP, but they must use standard model inputs for 

certain variables. Some servicers have also developed their own models to analyze 

borrowers’ eligibility for their own proprietary modification programs if they are not eligible 

for HAMP. They told us that their proprietary models generally used similar inputs as the 

HAMP NPV model. 

82As outlined in the March 4, 2009, program guidelines, HAMP’s eligibility requirements 

stipulate that (1) the property must be owner-occupied and the borrower’s primary 

residence (the program excludes vacant and investor-owned properties); (2) the property 

must be a single-family (1-4 unit) property with a maximum unpaid principal balance on 

the unmodified first-lien mortgage that is equal to or less than $729,750 for a 1-unit 

property; (3) the loans must have been originated on or before January 1, 2009; and (4) 

the first-lien mortgage payment must be more than 31 percent of the homeowner’s gross 

monthly income. 
 

Page 69 GAO-12-34 Vacant Properties 

Treasury officials noted that the incentives investors receive for 

participating in HAMP may tip the calculation toward modification, which 

somewhat addresses the costs to communities. Finally, servicer 

representatives and other industry observers said that adding to the costs 

of foreclosure could have the unintended consequence of causing 

servicers to abandon more foreclosures—that is, deciding not to foreclose 

on a loan and walking away from the properties. It could also increase the 

cost of servicing, which might impact costs to consumers or banks’ 

lending decisions in areas where the foreclosure costs were high. 

As discussed earlier, local governments currently are experiencing fiscal 

strain, and local officials told us federal funds help them address the costs 

of vacant properties, but they are concerned that continuing their efforts 

will be difficult as some programs expire, and cuts are made in others. In 

particular, local officials said they needed funds they could use for 

demolition and increasing the capacity of their code enforcement 

departments. Although the federal funds they receive assist in these 

efforts, as discussed earlier, officials in Baltimore, Detroit, and Chicago 

stated that the resources required to demolish the large number of unsafe 

and unattended vacant properties in those cities exceeds local and state 

budgets and federal funds. Local officials we interviewed recognized the 

importance of NSP funding in combating the problems of vacant 

properties. They said that this program provided much needed funds for 

demolition, and one official noted that it allowed the city to undertake 

neighborhood revitalization projects that it would not have otherwise been 

able to do, and provided leverage for attracting other sources of funding 

and development in targeted areas. Officials in two localities also reported 

that the technical assistance they received from HUD helped fill gaps in 

their capacity to develop systems to implement NSP projects.83 However, 

this funding is coming to an end—funds from the latest round of NSP 

grants were required to be obligated for specific projects by March 

2010—and local officials noted that it was not enough to address the 

scale of the vacant property problems in their areas. For example, 

 

83A HUD official explained how the agency’s technical assistance has helped local officials 

analyze their local markets and adjust their strategies for spending NSP funds on 

programs that would be most effective. HUD has recently revised its NSP technical 

assistance efforts to better target spending to communities that need it the most and has 

developed Web-based resources for all NSP grantees. HUD also plans to launch a similar 

strategy for its other grant programs that is aimed at improving the capacity of local 

governments, especially in economically distressed cities. 

Local Officials Have 

Concerns about Decreased 

Federal Funding and Want 

Increased Attention to 

Servicers’ Role in Vacant 

Property Problem 
 

Page 70 GAO-12-34 Vacant Properties 

officials in Las Vegas and the surrounding area told us they were able to 

acquire a few hundred properties with NSP funds, as of June 2011, but 

this number was not enough to stabilize the neighborhoods. According to 

2010 Census data, Las Vegas has almost 29,000 nonseasonal vacant 

properties. 

In addition, local officials noted that the ability to make funding decisions 

locally and the flexible nature of CDBG funds from HUD were essential to 

their housing programs, and that reductions in this funding would be 

difficult to manage. Communities can use CDBG funds for a variety of 

uses, including acquisition, administration and planning, economic 

development, and housing activities. For example, local officials in the 

communities we studied said that they use CDBG funding for, among 

other things, providing grants to homeowners to help them repair 

properties (Tuscon and Indianapolis), demolition (Detroit and Cleveland), 

enhancing code enforcement (Cleveland), and community outreach 

(Chicago). After budget increases in the last few years, and supplemental 

CDBG funding through the American Recovery and Reinvestment Act of 

2009, total CDBG funding was reduced by 21 percent in 2011 compared 

with 2010 funding levels.84 The proposed 2012 budget made further 

reductions of 7.5 percent, or $300 million, relative to current funding 

levels in order to meet the President’s goal of reducing spending across 

agencies. Local officials and community group representatives from 

several cities said that this reduction in CDBG funding would make 

continuing their CDBG-funded programs difficult. With sustained high 

foreclosure and unemployment rates and further declining home values, 

local officials said that continued, flexible CDBG funding would help them 

maintain efforts to address vacant properties in their areas. 

Local officials and representatives of community organizations also 

emphasized that more pressure from regulators on servicers to modify 

loans was needed. In particular, some local officials said that regulators 

could do more to encourage servicers to modify loans by reducing the 

principal that the borrower owes. Further, officials in the Las Vegas area 

noted that HAMP does not address the challenges facing many borrowers 

in the area who owe more on their homes than they are worth. When a 

borrower owes more on the mortgage than the house is currently worth, 

the affordability of monthly payments may not be the only consideration in 

 

84Pub. L. No. 111- 5, 123 Stat. 115 (2009). 
 

Page 71 GAO-12-34 Vacant Properties 

the borrower’s decision to stay in the house. We have previously reported 

that HAMP, which makes borrowers’ monthly payments affordable by 

reducing them to the target of 31 percent of their gross household 

incomes, does not focus directly on the issue of negative equity that is 

experienced by a large and growing segment of borrowers (so called 

“underwater” borrowers).85 Local officials noted that effectively stabilizing 

neighborhoods while further foreclosures are occurring and more 

properties are becoming vacant is difficult. They maintain that more 

pressure on servicers to modify loans could prevent additional 

foreclosures and vacancies. This, in turn, could allow local efforts to 

stabilize neighborhoods to make more of an impact. In response, banking 

regulators said that they encourage institutions under their jurisdiction to 

work with borrowers to modify loans when feasible. In addition, Treasury 

officials said that they adjusted servicers’ HAMP incentive payments to 

encourage them to begin working with borrowers on modifications early in 

delinquency. 

Local officials also said that federal regulators could do more to enforce 

servicers’ responsibilities for maintaining vacant foreclosed properties, 

such as by holding them accountable for complying with local property 

maintenance codes and responding to code violations. Local officials we 

spoke with in most of the cities we studied also expressed frustration with 

obtaining servicers’ cooperation in addressing code violations on vacant 

properties for which they are responsible. For example, one official said 

that local efforts to enforce servicers’ responsibilities to maintain certain 

properties were not always effective. Part of these difficulties could be 

due to challenges in locating property owners and mortgage lien holders 

 

85GAO, Troubled Asset Relief Program: Treasury Actions Needed to Make the Home 

Affordable Modification Program More Transparent and Accountable, GAO-09-837

(Washington, D.C.: July 23, 2009). Treasury has begun implementing several other 

programs for struggling homeowners, including the Second-Lien Modification Program, 

the Principal Reduction Alternative program for borrowers who owe more on their 

mortgages than the value of their homes, and the Home Affordable Foreclosure 

Alternatives program for those who are not successful in HAMP modifications. However, 

we reported that Treasury’s progress in implementing these programs has been slow. See 

Troubled Asset Relief Program: Treasury Continues to Face Implementation Challenges 

and Data Weaknesses in Its Making Home Affordable Program, GAO-11-288

(Washington, D.C.: Mar. 17, 2011). As of July 2011, Treasury reported that there were 

9,221 active Principal Reduction Alternative permanent modifications. See Making Home 

Affordable, Program Performance Report Through July 2011 found at 

http://www.treasury.gov/initiatives/financial-stability/results/MHAReports/Pages/default.aspx. 
 

Page 72 GAO-12-34 Vacant Properties 

responsible for vacant properties. They noted that identifying the 

responsible party even after foreclosure is completed can be difficult 

because of delays or failures in recording changes in ownership with local 

jurisdictions. The servicers and property maintenance company we spoke 

with maintain that they have made improvements in communicating with 

local officials by setting up specialized hot lines, dedicating staff to 

responding to local issues, or placing notifications on properties with 

correct contact information in the event of problems. However, a couple of 

representatives also acknowledged that is an ongoing process. In 

response to local officials’ calls for regulators to enforce servicers’ 

compliance with local laws, regulatory staff said that compliance with local 

laws is expected and examiners would review whether the institution has 

systems or controls in place to manage compliance with local laws when 

circumstances warranted but typically do not enforce compliance in 

individual cases. For example, OCC representatives said that they do not 

have the resources or expertise on all the variations of local laws to 

review and enforce such compliance in every case. 

Oversight of mortgage servicers’ activities regarding loans in foreclosure 

has not always been a major focus among federal banking regulators, 

although they have recently increased their attention to this area. As part 

of overseeing the safety and soundness of banks, the banking regulators 

have developed a variety of guidance that outlines expectations for banks 

to follow in their lending practices, loan management, and other activities, 

and examiners primarily structure their reviews to address the areas 

considered to pose a high risk of financial loss for the institutions. Federal 

regulatory guidance and examinations address institutions’ overall 

policies for managing loans, not necessarily actions to take on individual 

properties. For example, the federal banking regulators have developed 

uniform standards that require depository institutions to establish and 

maintain comprehensive, written real estate lending policies that are 

Federal Agencies Have 

Recently Increased 

Attention to Mortgage 

Servicing Activities in 

Their Oversight 
 

Page 73 GAO-12-34 Vacant Properties 

consistent with safe and sound banking practices.86 These policies must 

address certain lending considerations and loan administration 

procedures, such as inspections to monitor the condition of properties 

that serve as collateral for delinquent loans going into foreclosure and 

compliance with relevant local laws and servicing agreements, among 

other requirements. However, these standards do not require specific 

property maintenance activities. In addition, interagency guidelines for 

safety and soundness state that institutions should establish and maintain 

a system to identify problem assets, prevent their deterioration, and better 

ensure sufficient resources to absorb estimated losses, but the guidelines 

do not provide specific requirements for property maintenance.87

Similarly, the extent to which bank regulators have examined servicing 

activities such as the foreclosure process has been limited because these 

practices generally were not considered to pose a high risk to the safety 

and soundness of the institutions and were not raised as an area of 

potential concern in consumer complaints.88 For example, regarding loans 

in the foreclosure process, regulatory officials said they expect servicers 

to work with borrowers to modify loans where feasible and comply with 

local laws, such as those related to registration of vacant properties. They 

also generally noted that examiners might review institutions’ policies for 

following local laws and managing and valuing losses for the loans but 

 

86Section 304 of the Federal Deposit Insurance Corporation Improvement Act of 1991 

requires the federal banking agencies to prescribe uniform real estate lending standards. 

12 U.S.C. § 1828(o). The standards established by the federal banking regulators require 

every depository institution to establish and maintain comprehensive, written real estate 

lending policies that are consistent with safe and sound banking practices and appropriate 

to the size of the institution and nature and scope of its operations. The lending policies 

must establish loan portfolio diversification standards; prudent underwriting standards; 

loan administration procedures for the bank’s real estate portfolio; and documentation, 

approval, and reporting requirements to monitor compliance with the bank’s real estate 

lending policies. OCC (12 C.F.R. Part 34, subpart D), Federal Reserve (12 C.F.R. Part 

208, subpart E), FDIC (12 C.F.R. Part 365). 

87Section 39 of the Federal Deposit Insurance Act (12 U.S.C. 1831p—1) requires that 

each bank regulator establish certain safety and soundness standards by regulation or 

guideline. For the OCC, these regulations appear at 12 C.F.R. Part 30; for the Federal 

Reserve, these regulations appear at 12 C.F.R. 208.3(d)(1); for FDIC, these regulations 

appear at 12 C.F.R. Part 364, Appendix A. 

88Because mortgage servicers generally manage loans that are actually owned or held by 

other entities, they are not exposed to significant losses if the loans become delinquent. In 

addition, we have previously reported that the percentage of loans in foreclosure was 

historically very low (less than 1 percent) from 1979 to 2006. 
 

Page 74 GAO-12-34 Vacant Properties 

would not typically review which actions servicers had taken on individual 

properties. 

Once foreclosure is completed on a loan, federal regulatory guidance and 

examinations generally focus on servicers’ appropriate valuation of any 

properties acquired through foreclosure and their activities to market and 

sell them within specified time frames. Generally, federal regulations 

allow national banks to hold these REO properties in their inventory for 5 

years, but they may be able to get extensions for up to an additional 5 

years.89 According to regulatory guidance and agency staff, examiners 

review whether institutions are actively marketing foreclosed properties 

during this time period and appropriately accounting for the value of these 

properties. However, federal regulatory staff indicated that not much 

oversight is done specifically related to maintenance of vacant foreclosed 

properties. 

Recently, banking regulators have considered the potential risks that 

mortgage servicing activities can pose to institutions and taken more 

actions regarding oversight of servicing, some of which may relate to 

maintenance of vacant properties, such as the following: 

 OCC staff indicated that they have developed new guidance for banks 

and examiners that includes potential requirements and actions 

related to foreclosed properties. Once issued, OCC staff said that the 

guidance will reinforce expectations for banks to consider the legal, 

safety and soundness, and community impacts of foreclosed 

properties in their policies and procedures. As of October 2011, the 

guidance was not yet finalized, but was expected to be issued soon. 

 Federal banking regulators conducted specific reviews of certain 

servicers’ foreclosure activities in response to the foreclosure process 

deficiencies that various mortgage servicers publicly announced 

beginning in September 2010. These reviews revealed severe 

deficiencies with the servicers’ document preparation and oversight of 

 

8912 U.S.C. § 29; 12 C.F.R. § 34.82(a). According to regulatory officials, various state 

laws that apply to certain institutions may have longer or shorter limits on holding REO 

properties. 
 

Page 75 GAO-12-34 Vacant Properties 

their internal foreclosure processes.90 Regulators issued formal 

enforcement orders to these servicers, requiring them to take 

corrective actions and assess the compliance, legal, and reputational 

risks in their servicing operations, which include the risks of 

deficiencies in foreclosure activity and assisting delinquent borrowers 

to remain in their homes. OCC and Federal Reserve staff said that 

they are reviewing these assessments and expect servicers to 

consider legal or liability risks of vacant and abandoned REO 

properties in these assessments. In addition, we previously reported 

that regulatory staff will substantially revise their supervisory strategy 

to assess servicer compliance with the enforcement orders and 

implementation of corrective actions.91

 In September 2010, the Federal Reserve developed draft exam 

guidelines that examiners may follow that include a question on 

whether servicers have policies and procedures in place to address 

abandoned or otherwise neglected collateral properties. Federal 

Reserve staff said that consumer compliance examiners are testing 

and revising these guidelines during exams of loan modifications that 

were scheduled this year and have found that institutions examined 

so far generally have specific policies for such properties that they 

follow, although in a few instances examiners instructed institutions to 

revise their policies to make them more specific. 

 FDIC issued guidance in 2008 reminding the institutions it oversees of 

the importance of properly maintaining foreclosed properties in 

anticipation of an increase in foreclosures due to the 2007 economic 

crisis. The guidance notes that institutions’ policies and procedures 

related to acquiring, holding, and disposing of properties acquired 

through foreclosure should ensure that their interests are protected 

while mitigating the impact on the value of surrounding properties. 

Specifically, this guidance states that properties should be maintained 

in a manner that complies with local property and fire codes and that 

efforts to maintain properties in marketable condition not only improve 

 

90Beginning in September 2010, several servicers announced that they were halting or 

reviewing their foreclosure proceedings throughout the country after allegations that the 

documents accompanying judicial foreclosures may have been inappropriately signed or 

notarized. For more information about this issue, see GAO, Mortgage Foreclosures: 

Documentation Problems Reveal Need for Ongoing Regulatory Oversight, GAO-11-433

(Washington, D.C.: May 2, 2011). 

91GAO-11-433. 
 

Page 76 GAO-12-34 Vacant Properties 

an institution’s ability to obtain the best price for the property but also 

minimize liability and reputation risk. 

 Federal bank regulators, Treasury, HUD, and the Bureau of 

Consumer Financial Protection also are developing national servicing 

standards. Regulatory staff could not say whether issues related to 

the maintenance of vacant properties would be included in any final 

standards. However, they said that discussions so far have focused 

on consumers’ interactions with servicers on their delinquent loans 

and avoiding foreclosure, not processes following foreclosure. 

In addition to federal banking regulators, FHA and the GSEs oversee 

various aspects of mortgage servicing and may penalize servicers if they 

do not comply with servicing guidelines. FHA, which oversees mortgage 

servicers that manage the home mortgage loans insured by that agency, 

uses a risk-based approach to monitor those institutions’ compliance with 

program servicing guidelines, such as guidelines for maintaining 

properties. According to FHA staff, past servicer reviews have focused on 

monitoring compliance with requirements for assisting delinquent 

borrowers to remain in their homes by considering loan modifications, 

payment plans, or other options to avoid foreclosure. To provide 

incentives for servicers to maintain properties according to the agency’s 

guidelines prior to transferring them to HUD following the foreclosure 

sale, the agency may deny or curtail insurance claims or reconvey a 

property if it does not meet certain conveyance requirements. As 

previously discussed, these properties are generally in compliance with 

local laws and ordinances, but HUD officials told us that the agency may 

exercise its discretion to use different methods than the locality requires. 

Representatives from the GSEs also reported that they conduct targeted 

reviews of servicers that focus on evaluating their processes and 

procedures. They said that they require servicers to follow servicing 

guidelines and proper legal procedures with respect to all aspects of their 

business operations as part of their contractual obligations with the GSEs. 

They also may pursue a variety of remedies, such as assessing fees or 

penalties on servicers, for failure to comply with the servicing guidelines, 

but said that they did not assess fees for maintenance-related issues. 

Instead, Fannie Mae officials said that, in cases of properties damaged 

because of the servicer’s neglect, they may require the servicer to 

repurchase the property or reimburse Fannie Mae for any loss in the 

property’s value. GSE representatives also noted that they train and 

routinely monitor the vendors that manage their REO properties to ensure 
 

Page 77 GAO-12-34 Vacant Properties 

that they comply with local laws and have third-party companies review 

their performance. 

FHFA and the GSEs also are evaluating future measures to improve 

mortgage servicing. At the direction of their regulator, FHFA, the GSEs 

are working together to align their guidelines to servicers to establish, 

among other things, consistent timelines and other requirements.92 In 

addition, FHFA, in consultation with Treasury and HUD, is seeking input 

for planning and market research purposes on new options for selling 

REO properties held by Fannie Mae, Freddie Mac, and FHA to reduce 

GSE and FHA losses on foreclosed properties and help stabilize 

neighborhoods. Options the agencies requested comments on include 

renting REO properties to previous homeowners or other parties or 

facilitating current tenants becoming owners. The notice stated that areas 

with a substantial number of REO properties and a strong rental market 

may begin to stabilize by turning a large number of REO properties into 

rental housing.93 FHFA is in the process of reviewing comments on such 

alternatives, including their risks and any trade-offs involved. 

As part of the HAMP program, Treasury oversees participating servicers’ 

compliance with their contractual obligations under the program. Treasury 

conducts compliance audits on all servicers that participate in the 

program according to a risk-based schedule. In addition, as a 

consequence of reported irregularities in the foreclosure process in 

September 2010, Treasury organized a review of the internal policies and 

procedures governing preforeclosure activities at the certain servicers 

and reiterated servicers’ obligations to follow applicable state laws. Our 

previous work on HAMP has shown that Treasury had not finalized 

 

92According to a GSE representative, the GSEs are required to establish appropriate 

incentives to encourage and support servicer contact with borrowers in the early stages of 

delinquency, consistent timelines and requirements for communications with borrowers, 

incentive structures for early engagement, and updated foreclosure process timelines. The 

representative also noted that the work will include consideration of appropriate penalties 

to encourage efficient resolution and liquidation of properties in cases where foreclosure is 

necessary. 

93For example, analysts at Credit Suisse estimate that reducing Fannie Mae’s and Freddie 

Mac’s foreclosed-property sales to around 30,000 each month, from the current rate of 

50,000, would cut total distressed sales and avoid a further 3 percent to 5 percent decline 

in home prices. In addition, according to an analyst with Zelman & Associates, an industry 

research and analysis firm, the number of single-family rental households has increased 

nationwide in the last several years, especially in markets hard-hit by foreclosures. 
 

Page 78 GAO-12-34 Vacant Properties 

policies to hold servicers accountable for their performance, although 

Treasury has recently begun publishing assessments of the performance 

of the 10 largest servicers and, as of July 2011, is withholding incentive 

payments that servicers receive for making loan modifications from two 

servicers until they make substantial improvements in their programs.94

Further, we have found that servicers were not always consistent in their 

treatment of borrowers applying for loan modifications.95 We have made a 

number of recommendations to Treasury to help ensure that borrowers 

are treated consistently and servicers are held accountable for their 

performance, which we will continue to monitor. 

We requested comments on a draft of this report from the Federal 

Reserve, Census, HUD, Treasury, Fannie Mae, FDIC, FHFA, Freddie 

Mac, OCC, and USPS. We received technical comments from Census, 

Federal Reserve, FHFA, Fannie Mae, Freddie Mac, OCC, and FHA, 

which we incorporated where appropriate. 

We received written comments from Treasury that are presented in 

appendix III. The Assistant Secretary for Financial Stability at the 

Department of the Treasury noted that the report is informative and 

helpful in describing the extent of vacant properties and their impacts. 

One of the strategies discussed in our report is requiring servicers to 

include vacant property costs to local governments—such as for police 

and fire services—into the models used to make loan modification or 

foreclosure decisions. The Assistant Secretary’s letter acknowledges, as 

we noted in the report, that there are certain challenges associated with 

holding servicers accountable for such costs. The Assistant Secretary’s 

letter also states that federal, state, and local agencies as well as 

community groups, investors, and servicers need to analyze appropriate 

responses to this issue. 

 

94GAO, Troubled Asset Relief Program: Home Affordable Modification Program Continues 

to Face Implementation Challenges, GAO-10-556T (Washington, D.C.: Mar. 25, 2010). 

We also have ongoing work reviewing Treasury’s recent steps regarding assessing 

servicers’ program performance. 

95GAO-10-556T. 

Agency Comments 

and Our Evaluation 
 

Page 79 GAO-12-34 Vacant Properties 

As agreed with your office, unless you publicly announce the contents of 

this report earlier, we plan no further distribution until 30 days from the 

report date. At that time, we will send copies to the appropriate 

congressional committees, Census, Fannie Mae, FDIC, FHFA, Federal 

Reserve, Freddie Mac, HUD, OCC, Treasury, USPS, and other interested 

parties. In addition, the report will be available at no charge on the GAO 

website at http://www.gao.gov. 

If you or your staff members have any questions about this report, please 

contact me at (202) 512-8678 or sciremj@gao.gov. Contact points for our 

Offices of Congressional Relations and Public Affairs may be found on 

the last page of this report. Key contributors to this report are listed in 

appendix IV. 

Sincerely yours, 

Mathew J. Scirè 

Director 

Financial Markets and Community Investment 
Appendix I: Objectives, Scope, and 

Methodology 

Page 80 GAO-12-34 Vacant Properties 

This report reviews the costs that foreclosed and unattended vacant 

homes create for local communities and the strategies state and local 

governments are using to address problems associated with unattended 

vacant properties. Specifically, this report addresses (1) trends in the 

number of vacant properties and how they relate to the recent increase in 

foreclosures; (2) the types of costs that vacant properties create and who 

bears the responsibility for these properties and their costs; and (3) state 

and local government strategies for addressing vacant properties and the 

federal role in assisting these efforts. 

To identify trends in the number of vacant properties and how they relate 

to the recent increase in foreclosures, we analyzed data on vacant 

residential housing units collected in the 2000 and 2010 decennial 

censuses. In order to describe the extent of and change in housing 

vacancies across states and selected cities from 2000 through 2010, we 

estimated the number of vacancies in 2000 and 2010 to show the trend in 

vacancies over the decade. We estimated the change in total vacancies 

and the number of vacancies as a percentage of the total housing stock 

between the two censuses. We excluded vacant units that Census 

categorized as for seasonal use or for use by migrant workers because 

we concluded that these properties, which are generally occupied for 

temporary periods, are likely to be maintained. 

We downloaded census data from Census 2000 and the 2010 Census 

from the Census Bureau’s American FactFinder. These data contain the 

occupancy status of enumerated households and describe the reason for 

the vacancy. The vacancy status is defined as for rent or sale; for sale 

only; rented or sold, not occupied; for seasonal, recreational, or 

occasional use; for migrant workers; and other vacant. 

In addition, we analyzed data compiled from the U.S. Postal Service 

(USPS) on vacant addresses as of the second quarter of 2010 to 

compare it with Census 2010 data on vacant properties, as a check on 

Census data as well as to highlight any interesting characteristics that the 

Census data may not identify. We tabulated the total number of 

residential vacant addresses at national and state levels, subtracting out 

seasonal addresses, and calculated the percentage difference for each 

state and the average difference. We did not report the results of the 

comparison because of the differences in methodology and definitions 

between the two sets of data. We did report our comparison of the 10 

states with the largest number of vacant addresses according to USPS 

second quarter 2010 data and the 10 states with the largest number of 

nonseasonal residential vacant units according to Census 2010 data. 

Appendix I: Objectives, Scope, and 

Methodology 
Appendix I: Objectives, Scope, and 

Methodology 

Page 81 GAO-12-34 Vacant Properties 

Users of the report should note that accurately measuring the number of 

vacant properties is difficult and that available data all have limitations. 

The primary difficulty is identifying whether a property is actually vacant, 

which generally is done through physical inspection of property exteriors, 

information from neighbors, or reviews of public utility usage or billing 

records. No comprehensive data are available about the duration that 

properties are vacant. As a result, measurements of vacant properties 

should be viewed as general indicators of the scale of the problem as of 

the point in time the given survey was taken. In light of these limitations, 

we assessed the reliability of the Census and USPS data by reviewing 

past GAO and other assessments of the data and interviewing 

knowledgeable Census and USPS officials about their data integrity 

measures.1

 We determined that these data were sufficiently reliable for 

use in the report. 

To identify the factors that contributed to the increase in vacant properties 

over the last decade, we evaluated data on foreclosures, unemployment, 

and population. Specifically, we analyzed data on foreclosure inventory 

by state as of the end of 2010 from the Mortgage Bankers Association 

National Delinquency Survey. In a previous report released earlier this 

year, we assessed the reliability of these same data by reviewing existing 

information about the quality of the data, a previous GAO data reliability 

assessment that included performing electronic testing to detect errors in 

completeness and reasonableness, and interviewing Mortgage Bankers 

Association officials knowledgeable about the data to confirm that the 

data collection methodology had not changed since our earlier review.2

We determined that the data were sufficiently reliable for purposes of the 

report. We obtained data on unemployment and population from the 

Bureau of Labor Statistics and Census. The federal statistical agencies of 

the U.S. government follow the standards and guidelines for statistical 

surveys set forth by the Office of Management and Budget. These 

standards and guidelines governing federal statistical agencies are 

intended to help ensure that their surveys and studies are designed to 

produce reliable data as efficiently as possible and that their methods are 

documented and results presented in a manner that makes the data as 

accessible and useful as possible. In addition, we reviewed literature on 

the effects of foreclosures and vacant properties on property values. We 

 

1

GAO-11-93 and GAO-11-193. 

2

GAO-11-433. 
Appendix I: Objectives, Scope, and 

Methodology 

Page 82 GAO-12-34 Vacant Properties 

also interviewed local government and nongovernmental officials about 

the factors contributing to properties becoming vacant in their areas. To 

further corroborate the association between increases in the number of 

vacant housing units categorized as “other vacant” between the 2000 and 

2010 censuses, and areas of economic distress, we analyzed data from 

the Census American Community Survey (ACS) for the period 2005 

through 2009 on the percentage of households in a given census tract 

with annual income below the appropriate poverty threshold for that 

household size and composition as defined by the Census Bureau.3

 We 

used the ACS data because 2010 poverty data was not yet available at 

the time we undertook this analysis. ACS data at the tract level can be 

unreliable for reporting for some tracts but the data were sufficiently 

reliable for the type of aggregate analysis we conducted. 

To understand the costs that mortgage servicers and lien holders bear to 

maintain vacant properties during and after foreclosure, we analyzed data 

on property maintenance costs from two housing-related governmentsponsored enterprises (GSE)—Fannie Mae and Freddie Mac—and 

HUD’s Federal Housing Administration (FHA). Specifically, we obtained 

data on the funds the GSEs and FHA reimbursed to servicers for 

maintenance of single-family properties secured by GSE-guaranteed and 

FHA-insured loans during the foreclosure process from 2005 through 

2010. We also obtained data on the payments GSEs made to third-party 

contractors for properties in their possession following foreclosure, for the 

years 2005 through 2010. We obtained data from HUD on the payments 

made to third-party contractors for fiscal years 2005 and 2010 and the 

first half of fiscal year 2011 for maintenance of HUD-owned, single-family 

properties. To assess the reliability of these data, we reviewed available 

documentation and interviewed knowledgeable GSE and HUD officials. 

We determined that the data were sufficiently reliable for use in the 

report. 

To understand the specific costs incurred by localities and strategies 

some localities have taken to address these costs, we reviewed relevant 

literature and conducted case studies of specific locations. We reviewed 

academic and other reports on the effects of vacant and foreclosed 

 

3

The Census American Community Survey (ACS) is a survey of 3 million households that 

takes place throughout the year that includes information on residential housing vacancies 

and poverty, among other data. The ACS data are reported on an annual basis and are 

also aggregated into 3-year and 5-year datasets. 
Appendix I: Objectives, Scope, and 

Methodology 

Page 83 GAO-12-34 Vacant Properties 

properties on local communities, strategies being used to address these 

issues, and the recent trends in fiscal conditions among states and cities. 

We categorized the information we gathered from these various sources 

to identify the most common types of strategies and their advantages and 

disadvantages. We also selected nine locations from different regions of 

the country, which had a range of (1) experiences with vacant properties, 

including different costs for maintaining vacant properties; (2) experiences 

with foreclosures, including states with judicial and nonjudicial foreclosure 

processes; (3) economic conditions, such as unemployment rates; and 

(4) HUD evaluations of need for funds under the Neighborhood 

Stabilization Program (NSP) and HUD assessments of use of NSP funds. 

In addition, we identified from our literature search locations that were 

taking innovative approaches to the vacant property problem. We 

selected Baltimore, Maryland; Cape Coral, Florida; Chicago, Illinois; 

Cleveland, Ohio; Detroit, Michigan; Indianapolis, Indiana; Indio, California; 

Las Vegas, Nevada; and Tucson, Arizona. We conducted in-person site 

visits to four locations and conducted telephone interviews in other cities 

with local government officials and representatives of nonprofit and 

community development organizations. In addition, we interviewed code 

enforcement officials about the impact of state laws in New York and New 

Jersey, states that recently enacted laws related to the maintenance of 

vacant properties in foreclosure. Although we selected these locations to 

provide broad representation of conditions related to vacant properties, 

these locations may not necessarily be representative of all localities 

nationwide. As a result, we could not generalize the results of our 

analysis to all states and localities. Officials in two of the locations 

provided us with pictures and examples of vacant properties. In site visits 

to Baltimore, Chicago, the Las Vegas area, and Tucson, and during prior 

visits to Cape Coral and Detroit, we visited selected vacant and 

foreclosed properties and took pictures to document examples of property 

conditions. 

To inform our work on each of these objectives, we also conducted other 

interviews. We interviewed staff from one of the largest maintenance 

companies that conducts property inspections and maintenance on behalf 

of services nationwide, academic researchers, GSE staff, and five 

mortgage servicers—including some of the largest firms and those that 

specialized in subprime loans. In addition, we interviewed representatives 

of federal agencies, including the Board of Governors of the Federal 

Reserve System (Federal Reserve), Federal Deposit Insurance 

Corporation (FDIC), Office of the Comptroller of the Currency (OCC), 

Department of Housing and Urban Development (HUD), Federal Housing 

Finance Agency (FHFA), and Treasury. 
Appendix I: Objectives, Scope, and 

Methodology 

Page 84 GAO-12-34 Vacant Properties 

We conducted this performance audit from November 2010 through 

November 2011 in accordance with generally accepted government 

auditing standards. Those standards require that we plan and perform the 

audit to obtain sufficient, appropriate evidence to provide a reasonable 

basis for our findings and conclusions based on our audit objectives. We 

believe that the evidence obtained provides a reasonable basis for our 

findings and conclusions based on our audit objectives. 
Appendix II: U.S. Decennial Census Data on 

Residential Vacancies, 2000 and 2010 

Page 85 GAO-12-34 Vacant Properties 

The data below were compiled from Census 2000 and 2010 on residential 

vacancies and are available through the U.S. Census Bureau’s American 

FactFinder website. Table 5 shows total housing units, total vacancies, 

and vacancies by category. These categories include vacant units for rent 

or sale; for sale only; for seasonal, recreational, or occasional use; for 

migrant workers; or other. The 2000 Census used a category of vacant 

units called “rented or sold, not occupied” while the 2010 Census used 

separate categories for vacant units identified as “rented, not occupied” 

and “sold, not occupied.” We combined those two categories for 2010 for 

comparative purposes. Table 5 also shows the share of the total housing 

stock that was vacant in each time period, for all vacancies, as well as 

nonseasonal vacancies, which excludes those used seasonally or for 

migrant workers. The table shows the percentage change between 2000 

and 2010 for each category of data. Census data do not distinguish 

between single- and multiunit residential properties.

Appendix II: U.S. Decennial Census Data on 

Residential Vacancies, 2000 and 2010 
Appendix II: U.S. Decennial Census Data on Residential Vacancies, 2000 and 2010 

 Page 86 GAO-12-34 Vacant P

Table 5: Census Data on Vacant Residential Units, 2000 and 2010 

State Year 

Housing 

units 

Total 

vacancies

For rent 

or sale

For sale 

only

Rented 

or sold, 

not 

occupied

For 

seasonal, 

recreational, 

or 

occasional 

use 

For 

migrant 

workers

Other 

vacant

nonsea

vacan

United States 2010 131,704,730 14,988,438 4,137,567 1,896,796 627,857 4,649,298 24,161 3,652,759 10,3 2000 115,904,641 10,424,540 2,614,652 1,204,318 702,435 3,578,718 25,498 2,298,919 6,82Percent change 2000-2010 13.6% 43.8 58.2 57.5 -10.6 29.9 -5.2 58.9 Alabama 2010 2,171,853 288,062 79,265 35,903 12,988 63,890 238 95,778 22 2000 1,963,711 226,631 64,091 25,858 15,560 47,205 369 73,548 17Percent change 2000-2010 10.6% 27.1 23.7 38.8 -16.5 35.3 -35.5 30.2 Alaska 2010 306,967 48,909 6,729 2,876 1,673 27,901 362 9,368 2 2000 260,978 39,378 7,036 2,612 2,066 21,474 180 6,010 Percent change 2000-2010 17.6% 24.2 -4.4 10.1 -19.0 29.9 101.1 55.9 Arizona 2010 2,844,526 463,536 120,490 64,407 15,999 184,327 538 77,775 27 2000 2,189,189 287,862 61,781 27,775 12,679 141,965 636 43,026 14Percent change 2000-2010 29.9% 61.0 95.0 131.9 26.2 29.8 -15.4 80.8 Arkansas 2010 1,316,299 169,215 46,443 18,500 7,134 38,153 345 58,640 13 2000 1,173,043 130,347 33,740 18,238 8,974 29,012 377 40,006 10Percent change 2000-2010 12.2% 29.8 37.6 1.4 -20.5 31.5 -8.5 46.6 California 2010 13,680,081 1,102,583 374,610 154,775 54,635 302,815 2,100 213,648 79 2000 12,214,549 711,679 190,321 92,197 50,846 236,857 2,205 139,253 47Percent change 2000-2010 12.0% 54.9 96.8 67.9 7.5 27.8 -4.8 53.4 Colorado 2010 2,212,898 240,030 57,644 32,673 8,476 101,965 524 38,748 13 2000 1,808,037 149,799 31,852 16,142 8,116 72,263 449 20,977 7Percent change 2000-2010 22.4% 60.2 81.0 102.4 4.4 41.1 16.7 84.7 
Appendix II: U.S. Decennial Census Data on Residential Vacancies, 2000 and 2010 

 Page 87 GAO-12-34 Vacant P

State Year 

Housing 

units 

Total 

vacancies

For rent 

or sale

For sale 

only

Rented 

or sold, 

not 

occupied

For 

seasonal, 

recreational, 

or 

occasional 

use 

For 

migrant 

workers

Other 

vacant

nonsea

vacan

Connecticut 2010 1,487,891 116,804 40,004 15,564 5,689 29,618 55 25,874 8 2000 1,385,975 84,305 25,575 9,305 6,320 23,379 138 19,588 6Percent change 2000-2010 7.4% 38.5 56.4 67.3 -10.0 26.7 -60.1 32.1 Delaware 2010 405,885 63,588 11,399 5,985 1,687 35,939 43 8,535 2 2000 343,072 44,336 7,393 3,273 1,693 25,977 53 5,947 Percent change 2000-2010 18.3% 43.4 54.2 82.9 -0.4 38.3 -18.9 43.5 District of Columbia 

2010 296,719 30,012 13,393 3,930 1,933 3,537 8 7,211 2

 2000 274,845 26,507 9,202 3,021 2,667 2,207 47 9,363 2Percent change 2000-2010 8.0% 13.2 45.5 30.1 -27.5 60.3 -83.0 -23.0 Florida 2010 8,989,580 1,568,778 371,626 198,232 47,349 657,070 1,541 292,960 9 2000 7,302,947 965,018 195,336 101,667 53,429 482,944 1,881 129,761 48Percent change 2000-2010 23.1% 62.6 90.2 95.0 -11.4 36.1 -18.1 125.8 Georgia 2010 4,088,801 503,217 174,416 83,852 19,910 81,511 854 142,674 42 2000 3,281,737 275,368 86,905 38,440 20,353 50,064 969 78,637 22Percent change 2000-2010 24.6% 82.7 100.7 118.1 -2.2 62.8 -11.9 81.4 Hawaii 2010 519,508 64,170 16,441 4,277 2,105 30,079 117 11,151 3 2000 460,542 57,302 15,699 3,720 2,683 25,584 57 9,559 3Percent change 2000-2010 12.8% 12.0 4.7 15.0 -21.5 17.6 105.3 16.7 Idaho 2010 667,796 88,388 16,360 12,814 3,174 41,660 632 13,748 4 2000 527,824 58,179 10,656 7,682 2,725 27,478 721 8,917 2Percent change 2000-2010 26.5% 51.9 53.5 66.8 16.5 51.6 -12.3 54.2 Illinois 2010 5,296,715 459,743 158,882 82,739 24,675 47,289 315 145,843 4 2000 4,885,615 293,836 99,019 46,896 31,689 29,712 407 86,113 26
Appendix II: U.S. Decennial Census Data on Residential Vacancies, 2000 and 2010 

 Page 88 GAO-12-34 Vacant P

State Year 

Housing 

units 

Total 

vacancies

For rent 

or sale

For sale 

only

Rented 

or sold, 

not 

occupied

For 

seasonal, 

recreational, 

or 

occasional 

use 

For 

migrant 

workers

Other 

vacant

nonsea

vacan

Percent change 2000-2010 8.4% 56.5 60.5 76.4 -22.1 59.2 -22.6 69.4 Indiana 2010 2,795,541 293,387 93,029 46,410 14,721 45,571 200 93,456 24 2000 2,532,319 196,013 64,363 29,816 17,432 33,803 179 50,420 16Percent change 2000-2010 10.4% 49.7 44.5 55.7 -15.6 34.8 11.7 85.4 Iowa 2010 1,336,417 114,841 31,812 18,405 7,358 21,020 87 36,159 9 2000 1,232,511 83,235 23,272 14,067 7,444 16,472 77 21,903 6Percent change 2000-2010 8.4% 38.0 36.7 30.8 -1.2 27.6 13.0 65.1 Kansas 2010 1,233,215 121,119 40,445 16,286 7,229 12,763 129 44,267 10 2000 1,131,200 93,309 30,940 14,821 7,845 9,639 137 29,927 8Percent change 2000-2010 9.0% 29.8 30.7 9.9 -7.9 32.4 -5.8 47.9 Kentucky 2010 1,927,164 207,199 56,960 27,286 11,746 38,616 627 71,964 16 2000 1,750,927 160,280 44,268 20,748 13,421 30,420 715 50,708 12Percent change 2000-2010 10.1% 29.3 28.7 31.5 -12.5 26.9 -12.3 41.9 Louisiana 2010 1,964,981 236,621 66,857 21,480 10,567 42,253 999 94,465 19 2000 1,847,181 191,128 54,185 18,097 18,144 39,578 525 60,599 15Percent change 2000-2010 6.4% 23.8 23.4 18.7 -41.8 6.8 90.3 55.9 Maine 2010 721,830 164,611 15,738 9,711 3,110 118,310 160 17,582 4 2000 651,901 133,701 11,153 6,249 3,569 101,470 70 11,190 3Percent change 2000-2010 10.7% 23.1 41.1 55.4 -12.9 16.6 128.6 57.1 Maryland 2010 2,378,814 222,403 61,874 32,883 10,328 55,786 177 61,355 16 2000 2,145,283 164,424 41,751 22,375 12,492 38,880 167 48,759 12Percent change 2000-2010 10.9% 35.3 48.2 47.0 -17.3 43.5 6.0 25.8 Massachusetts 2010 2,808,254 261,179 66,673 25,038 10,230 115,630 161 43,447 14
Appendix II: U.S. Decennial Census Data on Residential Vacancies, 2000 and 2010 

 Page 89 GAO-12-34 Vacant P

State Year 

Housing 

units 

Total 

vacancies

For rent 

or sale

For sale 

only

Rented 

or sold, 

not 

occupied

For 

seasonal, 

recreational, 

or 

occasional 

use 

For 

migrant 

workers

Other 

vacant

nonsea

vacan

 2000 2,621,989 178,409 34,174 10,861 9,218 93,771 194 30,191 8Percent change 2000-2010 7.1% 46.4 95.1 130.5 11.0 23.3 -17.0 43.9 Michigan 2010 4,532,233 659,725 141,687 77,080 24,662 263,071 1,773 151,452 39 2000 4,234,279 448,618 72,805 44,250 27,161 233,922 1,449 69,031 2Percent change 2000-2010 7.0% 47.1 94.6 74.2 -9.2 12.5 22.4 119.4 Minnesota 2010 2,347,201 259,974 48,091 30,726 9,430 130,471 334 40,922 12 2000 2,065,946 170,819 20,452 13,392 8,022 105,609 554 22,790 6Percent change 2000-2010 13.6% 52.2 135.1 129.4 17.6 23.5 -39.7 79.6 Mississippi 2010 1,274,719 158,951 44,735 16,886 6,835 28,867 318 61,310 12 2000 1,161,953 115,519 29,486 12,456 10,035 21,845 299 41,398 9Percent change 2000-2010 9.7% 37.6 51.7 35.6 -31.9 32.1 6.4 48.1 Missouri 2010 2,712,729 337,118 92,946 44,200 15,388 80,374 193 104,017 25 2000 2,442,017 247,423 64,167 33,775 18,843 66,053 262 64,323 18Percent change 2000-2010 11.1% 36.3 44.9 30.9 -18.3 21.7 -26.3 61.7 Montana 2010 482,825 73,218 10,082 5,964 2,126 38,510 283 16,253 3 2000 412,633 53,966 9,163 5,581 2,540 24,213 248 12,221 2Percent change 2000-2010 17.0% 35.7 10.0 6.9 -16.3 59.0 14.1 33.0 Nebraska 2010 796,793 75,663 24,404 9,167 4,083 13,881 60 24,068 6 2000 722,668 56,484 17,936 8,284 4,582 11,912 127 13,643 4Percent change 2000-2010 10.3% 34.0 36.1 10.7 -10.9 16.5 -52.8 76.4 Nevada 2010 1,173,814 167,564 61,985 32,949 5,254 32,703 242 34,431 13 2000 827,457 76,292 31,635 12,021 4,209 16,526 281 11,620 5Percent change 2000-2010 41.9% 119.6 95.9 174.1 24.8 97.9 -13.9 196.3 
Appendix II: U.S. Decennial Census Data on Residential Vacancies, 2000 and 2010 

 Page 90 GAO-12-34 Vacant P

State Year 

Housing 

units 

Total 

vacancies

For rent 

or sale

For sale 

only

Rented 

or sold, 

not 

occupied

For 

seasonal, 

recreational, 

or 

occasional 

use 

For 

migrant 

workers

Other 

vacant

nonsea

vacan

New Hampshire 2010 614,754 95,781 13,293 7,521 2,180 63,910 27 8,850 3 2000 547,024 72,418 5,218 3,252 1,898 56,413 29 5,608 Percent change 2000-2010 12.4% 32.3 154.8 131.3 14.9 13.3 -6.9 57.8 New Jersey 2010 3,553,562 339,202 92,118 39,260 12,723 134,903 156 60,042 20 2000 3,310,275 245,630 49,858 24,546 15,206 109,075 246 46,699 13Percent change 2000-2010 7.3% 38.1 84.8 59.9 -16.3 23.7 -36.6 28.6 New Mexico 2010 901,388 109,993 22,150 11,050 3,446 36,612 229 36,506 7 2000 780,579 102,608 26,697 10,693 4,738 31,990 332 28,158 7Percent change 2000-2010 15.5% 7.2 -17.0 3.3 -27.3 14.4 -31.0 29.6 New York 2010 8,108,103 790,348 200,039 77,225 33,813 289,301 892 189,078 50 2000 7,679,307 622,447 158,569 59,405 40,439 235,043 750 128,241 38Percent change 2000-2010 5.6% 27.0 26.2 30.0 -16.4 23.1 18.9 47.4 North Carolina 2010 4,327,528 582,373 156,587 71,693 21,181 191,508 1,620 139,784 38 2000 3,523,944 391,931 92,893 44,007 26,523 134,870 1,890 91,748 25Percent change 2000-2010 22.8% 48.6 68.6 62.9 -20.1 42.0 -14.3 52.4 North Dakota 2010 317,498 36,306 7,422 2,734 1,597 11,483 319 12,751 2 2000 289,677 32,525 7,642 4,713 1,631 8,340 263 9,936 2Percent change 2000-2010 9.6% 11.6 -2.9 -42.0 -2.1 37.7 21.3 28.3 Ohio 2010 5,127,508 524,073 184,143 78,089 27,389 58,591 346 175,515 46 2000 4,783,051 337,278 125,095 48,404 33,182 47,239 355 83,003 28Percent change 2000-2010 7.2% 55.4 47.2 61.3 -17.5 24.0 -2.5 111.5 Oklahoma 2010 1,664,378 203,928 59,264 22,671 11,122 35,187 318 75,366 16 2000 1,514,400 172,107 50,165 23,725 14,228 32,293 232 51,464 13
Appendix II: U.S. Decennial Census Data on Residential Vacancies, 2000 and 2010 

 Page 91 GAO-12-34 Vacant P

State Year 

Housing 

units 

Total 

vacancies

For rent 

or sale

For sale 

only

Rented 

or sold, 

not 

occupied

For 

seasonal, 

recreational, 

or 

occasional 

use 

For 

migrant 

workers

Other 

vacant

nonsea

vacan

Percent change 2000-2010 9.9% 18.5 18.1 -4.4 -21.8 9.0 37.1 46.4 Oregon 2010 1,675,562 156,624 40,193 24,191 7,009 55,473 461 29,297 10 2000 1,452,709 118,986 37,482 20,349 7,158 36,850 333 16,814 8Percent change 2000-2010 15.3% 31.6 7.2 18.9 -2.1 50.5 38.4 74.2 Pennsylvania 2010 5,567,315 548,411 135,262 64,818 29,517 161,582 411 156,821 38 2000 5,249,750 472,747 105,585 55,891 37,494 148,230 386 125,161 32Percent change 2000-2010 6.0% 16.0 28.1 16.0 -21.3 9.0 6.5 25.3 Rhode Island 2010 463,388 49,788 15,763 5,171 1,946 17,077 12 9,819 3 2000 439,837 31,413 8,615 2,400 1,726 12,988 14 5,670 Percent change 2000-2010 5.4% 58.5 83.0 115.5 12.7 31.5 -14.3 73.2 South Carolina 2010 2,137,683 336,502 92,758 36,523 12,476 112,531 370 81,844 22 2000 1,753,670 219,816 58,176 21,955 15,930 70,198 420 53,137 14Percent change 2000-2010 21.9% 53.1 59.4 66.4 -21.7 60.3 -11.9 54.0 South Dakota 2,010 363,438 41,156 10,366 3,696 1,956 13,277 88 11,773 2 2,000 323,208 32,963 8,057 3,718 2,053 9,839 35 9,261 2Percent change 2000-2010 12.4% 24.9 28.7 -0.6 -4.7 34.9 151.4 27.1 Tennessee 2,010 2,812,133 318,581 98,370 47,274 14,498 60,778 392 97,269 25 2000 2,439,443 206,538 64,476 31,876 14,838 36,712 442 58,194 16Percent change 2000-2010 15.3% 54.2 52.6 48.3 -2.3 65.6 -11.3 67.1 Texas 2010 9,977,436 1,054,503 394,310 121,430 46,946 208,733 2,209 280,875 84 2000 8,157,575 764,221 249,240 85,732 49,625 173,149 3,453 203,022 58Percent change 2000-2010 22.3% 38.0 58.2 41.6 -5.4 20.6 -36.0 38.3 Utah 2010 979,709 102,017 20,176 14,580 4,236 47,978 232 14,815 5
Appendix II: U.S. Decennial Census Data on Residential Vacancies, 2000 and 2010 

 Page 92 GAO-12-34 Vacant P

State Year 

Housing 

units 

Total 

vacancies

For rent 

or sale

For sale 

only

Rented 

or sold, 

not 

occupied

For 

seasonal, 

recreational, 

or 

occasional 

use 

For 

migrant 

workers

Other 

vacant

nonsea

vacan

 2000 768,594 67,313 13,780 10,586 3,333 29,685 138 9,791 3Percent change 2000-2010 27.5% 51.6 46.4 37.7 27.1 61.6 68.1 51.3 Vermont 2010 322,539 66,097 5,635 3,598 1,212 50,198 39 5,415  2000 294,382 53,748 3,084 2,393 1,381 43,060 46 3,784 Percent change 2000-2010 9.6% 23.0 82.7 50.4 -12.2 16.6 -15.2 43.1 Virginia 2010 3,364,939 308,881 82,493 44,881 14,978 80,468 608 85,453 22 2000 2,904,192 205,019 47,563 27,407 16,254 54,696 652 58,447 14Percent change 2000-2010 15.9% 50.7 73.4 63.8 -7.9 47.1 -6.7 46.2 Washington 2010 2,885,677 265,601 72,112 41,417 12,500 89,907 1,328 48,337 17 2000 2,451,075 179,677 50,887 27,255 11,256 60,355 1,197 28,727 1Percent change 2000-2010 17.7% 47.8 41.7 52.0 11.1 49.0 10.9 68.3 West Virginia 2010 881,917 118,086 19,521 10,381 5,963 38,283 118 43,820 7 2000 844,623 108,142 18,286 12,243 7,954 32,757 61 36,841 7Percent change 2000-2010 4.4% 9.2 6.8 -15.2 -25.0 16.9 93.4 18.9 Wisconsin 2010 2,624,358 344,590 63,268 34,219 9,436 193,046 249 44,372 15 2000 2,321,144 236,600 38,714 17,172 9,386 142,313 205 28,810 9Percent change 2000-2010 13.1% 45.6 63.4 99.3 0.5 35.6 21.5 54.0 Wyoming 2010 261,868 34,989 7,304 3,376 1,239 14,892 322 7,856  2000 223,854 30,246 6,214 2,977 1,445 12,389 246 6,975 Percent change 2000-2010 17.0% 15.7 17.5 13.4 -14.3 20.2 30.9 12.6 

Source: Census 2000 and 2010 data. 
Appendix II: U.S. Decennial Census Data on 

Residential Vacancies, 2000 and 2010 

Page 93 GAO-12-34 Vacant Properties 

Table 6 shows the total number of vacant residential units in 2000 and 

2010 according to decennial Census data, as well as the percentage 

change between the two censuses. The table also shows the states 

ranked by number of residential vacant units in 2010, with Florida at the 

top because of the large number of vacant units in that state in 2010. 

Table 6: Number of Vacant Residential Units, 2010 Census 

State 

Vacancies 

2010

Vacancies 

2000 

Percent change 

2000-2010

United States 14,988,438 10,424,540 43.8

Florida 1,568,778 965,018 62.6

California 1,102,583 711,679 54.9

Texas 1,054,503 764,221 38.0

New York 790,348 622,447 27.0

Michigan 659,725 448,618 47.1

North Carolina 582,373 391,931 48.6

Pennsylvania 548,411 472,747 16.0

Ohio 524,073 337,278 55.4

Georgia 503,217 275,368 82.7

Arizona 463,536 287,862 61.0

Illinois 459,743 293,836 56.5

Wisconsin 344,590 236,600 45.6

New Jersey 339,202 245,630 38.1

Missouri 337,118 247,423 36.3

South Carolina 336,502 219,816 53.1

Tennessee 318,581 206,538 54.2

Virginia 308,881 205,019 50.7

Indiana 293,387 196,013 49.7

Alabama 288,062 226,631 27.1

Washington 265,601 179,677 47.8

Massachusetts 261,179 178,409 46.4

Minnesota 259,974 170,819 52.2

Colorado 240,030 149,799 60.2

Louisiana 236,621 191,128 23.8

Maryland 222,403 164,424 35.3

Kentucky 207,199 160,280 29.3

Oklahoma 203,928 172,107 18.5

Arkansas 169,215 130,347 29.8
Appendix II: U.S. Decennial Census Data on 

Residential Vacancies, 2000 and 2010 

Page 94 GAO-12-34 Vacant Properties 

State 

Vacancies 

2010

Vacancies 

2000 

Percent change 

2000-2010

Nevada 167,564 76,292 119.6

Maine 164,611 133,701 23.1

Mississippi 158,951 115,519 37.6

Oregon 156,624 118,986 31.6

Kansas 121,119 93,309 29.8

West Virginia 118,086 108,142 9.2

Connecticut 116,804 84,305 38.5

Iowa 114,841 83,235 38.0

New Mexico 109,993 102,608 7.2

Utah 102,017 67,313 51.6

New Hampshire 95,781 72,418 32.3

Idaho 88,388 58,179 51.9

Nebraska 75,663 56,484 34.0

Montana 73,218 53,966 35.7

Vermont 66,097 53,748 23.0

Hawaii 64,170 57,302 12.0

Delaware 63,588 44,336 43.4

Rhode Island 49,788 31,413 58.5

Alaska 48,909 39,378 24.2

South Dakota 41,156 32,963 24.9

North Dakota 36,306 32,525 11.6

Wyoming 34,989 30,246 15.7

District of Columbia 30,012 26,507 13.2

Sources: Census 2000 and 2010 data. 
Appendix III: Comments from the Department 

of the Treasury 

Page 95 GAO-12-34 Vacant Properties 

Appendix III: Comments from the 

Department of the Treasury 
Appendix IV: GAO Contact and Staff 

Acknowledgments 

Page 96 GAO-12-34 Vacant Properties 

Mathew J. Scirè, (202) 512-8678, or sciremj@gao.gov

In addition to the individual named above, Cody Goebel, Assistant 

Director; Rachel DeMarcus; Catherine Gelb; Kristeen McLain; Marc 

Molino; Jill Naamane; Linda Rego; Jennifer Schwartz; Andrew Stavisky; 

Cynthia S. Taylor; Jeff Tessin; James Vitarello; and Monique Williams 

made key contributions to this report. 

Appendix IV: GAO Contact and Staff 

Acknowledgments 

GAO Contact 

Staff 

Acknowledgments 

(250584)
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