Mississippi sees record number of forfeited properties

Published 6:25 am Thursday, June 7, 2012

The properties join 8,485 parcels already in the state’s possession over the years, taken from owners who were unable or unwilling to pay their property taxes.

That’s 8,485 lots statewide that aren’t being used, aren’t being maintained and aren’t giving anything back to the government or their community — except maybe some headaches.

“These abandoned homes are really a cancer on the neighborhood,” said Secretary of State Delbert Hosemann, whose office deals with tax-forfeited property.

They can become a hub for criminal activity, Hosemann said, but at an absolute minimum, they’re an eyesore and a drain on their neighbors’ property values.

This year’s haul is the most ever in Mississippi, as the state sees the first casualties of the housing crisis reach the end of the forfeiture process. Last year, the state added 203 parcels to its inventory, less than a third of what came in this year. The year before that, the state received 265.

The state doesn’t have an estimate of how much the properties would be worth in taxes, but their combined market value is $38.5 million. Any sale proceeds go first to the local governments to cover the delinquent taxes and then to the state if any money is leftover.

Hosemann said this year’s crop actually is forfeitures from unpaid taxes in 2008. So as 2009 and 2010’s forfeited properties join the fold, the pool is sure to grow.

“In 2010, I realized that the downturn in the real estate market was going to have a significant impact on tax-forfeited properties,” Hosemann said.

That amplifies the need to find buyers for these properties, which, Hosemann said, “are probably not the most attractive pieces of property on the market.”

Hinds County has more of these properties than anywhere else. The 2,182 forfeitures are almost double that of any other county, and the combined market value of the properties, $16.3 million, is six times that of anyplace else.

“It’s doing absolutely no good for the state of Mississippi to own it — particularly in Hinds County, where the state owns so much other property” that it doesn’t pay taxes on, Hosemann said.

The Legislature this year passed a bill that Hosemann said will help. Once properties are under state control, the sale price can be discounted by the cost of demolition. Some properties now are valued at $2,000 to $3,000, and Hosemann said buyers can spend close to that to dispose of the existing home.

Lacking a private buyer, the state can give the properties over to local governments. They, in turn, can give them to a nonprofit for development or commit them to public use, such as a park or government building.

Hosemann said his office is working with government officials across the state to identify the most appealing properties the state owns. Once that’s done, the state can market them more effectively.

Recently, Hosemann and Greenville Mayor Chuck Jordan held a joint news conference to do just that with around 100 properties. Hosemann said more than 100 people attended.

“I’m very hopeful that we’ll move a number of these and that this will spread,” Hosemann said.

But it remains unlikely the backlog will keep pace with the new properties set to come in.

“We won’t ever get to zero,” Hosemann said. “After we’ve got through the ones that we can do this way, then we want to discuss with cities and counties other ways to demolish these properties.”