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San Diego’s City Council, after hearing nearly two hours’ worth of comments, voted 5-3 in an evening session last night in favor of implementing the proposed Property Value Protection Ordinance.

Under the new law, which was amended to take effect in 60 days instead of the proposed 30, banks will have to pay a $76 fee and register properties with the city when filing a Notice of Default, signaling the beginning of the foreclosure process. Funds from the registry would cover the $460,000 cost of adding staff, including three new full-time positions, to enforce existing property maintenance codes, and the registry itself would make it easier for city employees to determine who is responsible for a property’s upkeep and contact violators of existing property preservation laws.

During the public comment portion of the meeting, several opponents of the measure sought to lessen its impact. Many were representing the San Diego Association of Realtors, a local trade group. Their arguments were largely in favor of pushing back the implementation of the measure until the Notice of Trustee Sale is filed. This second notice signals the foreclosure process is nearing completion and a foreclosing lender has scheduled a public auction to attempt to dispose of the property.

Many homeowners who ended up with a Notice of Default, the ordinance’s detractors said, do not actually end up in foreclosure but instead receive loan modifications that allow them to keep their homes, though they end up responsible for all lender costs related to the foreclosure filings including, potentially, the new fee. No mention was made of short sales, which are at least as prevalent as modifications as means to cure a default, and under which the lender and not the borrower eventually pays the fee.

“Do I think $76 is going to be the straw that broke the camel’s back? No,” admitted Jordan Marks, one of the speakers representing the Realtors.

Supporters, meanwhile, said that since foreclosures frequently drag on long past the 90 day Notice of Default period, many blighted properties that the ordinance aims to address would not be accessible via the registry. They also sought to downplay the significance of the ordinance’s cost when compared to other foreclosure-related fees banks charge delinquent borrowers.

“It sounds almost as ridiculous as a 14 cent fee being passed on to pizza eaters for health care,” said Lorena Gonzalez of the San Diego and Imperial Counties Labor Council, referencing a pledge by Papa John’s founder John Schnatter to raise prices as a result of the implementation of federal health care laws.

Other speakers, including those in the real estate industry, also spoke in favor of the ordinance’s passage, but more than 60 additional speaker slips were submitted and read into record from those who wished to voice support but did not address the council, including one from mayor-elect Bob Filner.

On the council, Lorie Zapf was joined by Carl DeMaio and Kevin Faulconer in opposing the bill, voicing concerns that there would not be enough Notices of Default filed in coming months to cover the fixed cost of adding staff to enforce code violations.

“What guarantee do we have that not one dime is going to come out of the general fund starting with day one?” asked Zapf.

Her concerns were at odds with the Realtors, who predicted that so many Notices would be filed that the $76 fee should actually be significantly reduced in order to ensure the revenue neutrality of the measure.

Ultimately the three opponents were voted down by ordinance sponsor David Alvarez along with council members Sherri Lightner, Todd Gloria, Marti Emerald and council president Tony Young.

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Founder Nov. 14, 2012 @ 8:58 a.m.

Expect to see ever more "fees" in San Diego that will make living here harder and harder except for the Wealthy...


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