After failing to win bids earlier this month on 16 dilapidated properties deemed a nuisance to residents, the city of Bakersfield is considering option B: How to help out those who did buy them?
It’s a position the city has apparently never found itself in before, because as far as anyone can remember, it has never tried to become so directly involved. But its frustrations are not new.
In recent years, more properties considered derelict and abandoned have festered throughout the city’s urban core, especially in Ward 2.
“Chronic nuisance properties are problematic for a lot of reasons,” Vice Mayor and Ward 2 Councilman Andrae Gonzales said. “They create a negative externality for the whole neighborhood, making it less safe. And we get a lot of complaints from residents.”
These are the homes with boarded-up windows and doors, overgrown yards and collapsed roofs — the kind of properties that have incurred a structure fire or are a regular site for transients.
After five years of neglect, and usually because of unpaid property taxes, the county taxman can assert authority to sell the property and auction it the following year.
Local leaders want those lots dealt with, especially the ones they have watched, year after year, sit on the auction list and go unsold.
“There have been a number of properties that have gone to auction for years, and nobody has bid on them,” Gonzales said.
Properties go unsold often because they aren’t worth the trouble, as there are too many liens against them — various unpaid fines or bills that accrue over time — or they’re a mess due to a structure fire or vagrancy.
The city, Gonzales said, wants to be the one to take in the unwanted lots and turn them into prospective homes.
“That’s what we’re trying to do,” Gonzales said. “We’re trying to step in if there’s no other buyer.”
So it was that the city put out the minimum bid on each of 16 properties in a county tax sale earlier this month. The plan, Gonzales said, was to have them rehabilitated through a third-party contractor and turned into affordable housing or used to launch a home ownership program serving first-time buyers.
“Ultimately, we want private enterprise to do its thing, and for the market to work,” Gonzales said. “But as far as those gaps where no one is responsive to a property, I think that’s where the city should step in and have a role to play.”
Gonzales said the city is still figuring what that intervention looks like, since it has never performed that role before.
“We’re kind of flying the plane as we’re building it,” Gonzales said.
Auctions of such properties take place once per year, typically in March, hosted by the Kern County Tax Collector. The starting price is the sum of the property tax owed, plus administrative fees. Anyone can join the bid, including the previous owners: All they have to do is register online and pay a $5,000 deposit.
“You can be in Japan and say, ‘Oh my God, I can buy a house in California for $30,000,’ not knowing that the house is maybe burnt down or in a horrible area,” said Frank St. Clair, a local real estate investor.
According to Kern County Treasurer and Tax Collector Jordan Kaufman, 950 of the 1,050 properties up for auction this year sold — a very good year.
Kaufman said this month’s sale was the first in which city officials decided to take part, to his knowledge.
“They have expressed interest before,” Kaufman said. “I believe this is the first time they participated in a public auction.”
St. Clair was surprised by the move.
“I’ve never heard of it before,” he said. “Normally, the vehicle that is taken is some of the other stuff the city has been doing, like taking over buildings through eminent domain, getting the demolition permits, closing burnt buildings in six months — that type of thing.”
With the purchase of the properties, owners had five days to pay the full bid amount. Kaufman said more information, such as who purchased the lots, will be available next month as public record.
Don’t be surprised, St. Clair said, if the property ends up with the second or third bidder in line.
“People will realize what they bought and back out,” St. Clair said. “That happens very frequently.”
Those who retract their bids, according to Kaufman, can be barred from future sales for five years.
“And you lose your deposit,” he added.
Without a winning bid, city officials still want to support the new property owners. But how that will work, exactly, remains unclear.
The city still has $1.2 million in federal dollars from the American Rescue Plan that doesn't have to be dedicated until 2024. It plans to decide how to use it in the coming months.
“The $1.2 million is set aside to purchase vacant properties in general,” city spokesperson Joe Conroy said. “We will continue to pursue opportunities if and when they come available. It was not set aside for these properties specifically.”
Conroy said the city has tools available to help the new property owners “moving forward as they redevelop or rehabilitate their properties.” He added decisions on how to spend the money will be made a case-by-case basis.
“The city hopes to work with the new property owners and offer any assistance we can to help bring the properties back into productive use,” Conroy said.
Examples may include streamlining the permitting process and offering low-interest loans, which could lead to faster and less expensive construction. Such options are already available to projects in dedicated economic opportunity areas and qualified census tracts.
Government agencies can also enter an agreement sale, whereby they purchase property on a non-competitive basis and promise to the tax agency that the property will be used for a public purpose for at least 30 years.
“And that can be anything from a park, a buffer around a landfill or even affordable housing,” Kaufman said.
In entering this new territory, the city is slowly reshaping the role it plays in effecting change, especially in underserved neighborhoods.
Gonzales said he hopes the city will enter into auction again next year, and that it takes a more aggressive approach going forward.
Stephen Pelz, executive director of the Kern Housing Authority, agreed that converting unwanted properties can be an effective way to reduce blight and reinvigorate neighborhoods.
“While we haven’t renovated an existing property owned by the city, we have purchased vacant buildings and a tax default property in the city limits and in unincorporated areas,” Pelz said. “It can be challenging work as vacant properties are often the target of vandalism and trespassers, but the end result is worth it.”