Los Angeles City Council approves charging banks fees on foreclosed homes

The Los Angeles City Council voted on Wednesday to approve an inspection fee placed on banks when filing for a foreclosed home. The fee is aimed at ensuring the banks don't leave foreclosed homes empty and unkempt, particularly targeted at the large number of foreclosed homes in south Los Angeles neighborhoods that have been left without any upkeep. It's overall objective is to avoid neighborhood blight and stabilize neighborhoods.

Though the fee amount has yet to be determined, it could be around $400 per property to register a property with the city, according to the Los Angeles Daily News. The money will be used to pay inspectors who will be making sure the homes are kept up. This will be in addition to the $155 federal registration fee paid by banks, and face a $1,000 a day fine for unkempt homes.

Councilman Eric Garcetti of Council District 1 (which includes Echo Park) has vocally encouraged enforcement of keeping up foreclosed homes: "How can property values fully rebound when our neighborhoods are strewn with foreclosed properties that the banks have allowed to become magnets for trash, vermin and crime?" Garcetti said.

The City of Los Angeles already has a Neighborhood Stabilization Program, which uses government funds to hire workers for rehabilitating foreclosed properties in communities impacted by the housing crisis.  The question is then - if the city has already money ($143 million to be exact) going into work on empty foreclosed properties, does there really need to be more money give to the City?