Foreclosures have increased by 17 percent, year over year, for the first five months of 2008 in North Carolina.

Data comes from records on commercial and residential foreclosures maintained by the North Carolina Administrative Office of the Courts, covering the period from January to the end of May for each year.

Brunswick County showed the greatest leap of any of the large counties, with foreclosures jumping 129 percent. Mecklenburg County had the greatest absolute increase, relative to spring of last year, with a jump of 445 additional foreclosure filings.

While Brunswick, with its high percentage of expensive vacation homes, or Union County, with its prevalence of exurban tract developments might make sense to appear in the upper end of this list, other counties suggest that there are more than a few reasons for the spread of foreclosures. In places like Davidson County (Lexington), Gaston, or Pitt, it points to strains in places that once relied upon manufacturing. Even Cumberland, where military jobs would suggest that the economy might weather a few downturns, witnessed a 14 percent increase.

The numbers suggest that many in counties that depend upon tourism and the beach economy are really hard hit. Brunswick is not alone. In Currituck, for example, foreclosures were up 110 percent. Onslow increased by 22 percent and Carteret by 74 percent. In Cherokee, where casinos generate a lot of revenue, foreclosures surged 118 percent.

The problem of foreclosure was muted in some places.  While it jumped in large metros including Mecklenburg and Guilford, Wake and Orange increased at a rate below the state average.  Foreclosure filings in Edgecombe (Rocky Mount) and Watauga (Boone) fell by more than 26 percent.

In the last days of this year’s short session, the problem of abandoned mobile homes has been the subject of an active discussion in the NCGA.

Philip Haire, a House member from Haywood County and chair of the Appropriations Committee, has again advanced his bill (H1134) to provide a means for governments to clean up their abandoned mobile homes. This is the fourth year that some iteration of the bill has existed.

This year’s version provides counties with up to $1000 in cost refunds for every home that they can clear. In Tier One Counties, agencies can apply for 50 percent of costs beyond $1000. Counties must have a plan for their disposal.

On Tuesday, the bill was discussed in the Environment committee.

In years past, a sticking point for this bill was the cost associated with funding the cleanup. It comes from a $300 per unit recovery charge on the sale of new or used homes. For doublewides, the cost is $600. This was not so much the focus of this year’s debate. Instead, counties wanted assurances that the program would remain voluntary. The industry remains opposed, in part on the principle that they do not believe that their products are disposable.

I visited with code enforcement officers in the Lumber River area on Tuesday. This group wants a solution to abandoned homes. They drive by abandoned homes to get to work, they see them as an obstacle to tourism and economic development, and they link the empty buildings with crime. Its a strongly felt problem.

Actually, the room had a few more people than just code enforcement.  There was a fair share of planners, community development non-profit types, and a few city managers.  What was interesting was the degree to which dealing with abandoned homes superseded any interest in innovations to redevelop parks.  ‘Fix the problem out back’, they seemed to be saying, ‘before we try any experiments with co-ops and land trusts.’

North Carolina’s General Assembly gave substantial attention yesterday to a bill that would impact the fates of manufactured housing residents.

H1700, a bill sponsored by Susan Fisher that would provide a financial incentive to park owners to sell to resident or non-profit groups, made some progress in Judiciary II.  The bill was held up by its notice provision, which had stipulated that park owners should communicate in writing via US mail to each resident prior to a sale.

According to one MH industry leader, this triggers some concerns over property rights.

An alternative was put forward that only requires notice in the event of a change in use.  In other words, no notice is required if a park is sold to another private group that wants to maintain the park as is.  If a park owner wants to sell to a big box retailer, though, then a notice is required.

Advocates and industry express doubts about the difference that this would ultimately make — after all, no resident group is going to be able to match the kind of offer that a Wal-Mart of Home Depot could make for land that it would repurpose into a large commercial center.

No, a useful bill should probably preserve the notice provision for parks for exactly the opposite set of parks — those that are likely to remain in their current status.  These are the ones whose prices can reasonably be met by non-profits.  In North Carolina, that might be parks up to $2 million.

On Tuesday this week, the North Carolina General Assembly will hear two bills that can make a difference for residents of mobile homes in our state.

The first bill, introduced by Susan Fisher (D-Asheville), would provide some incentives for park owners to sell their communities to resident groups or to non-profits.  H1700, (Prevent Displacement of Manufactured Homes) would reduce the capital gains tax owed by a park owner in the event of a sale, provided that a resident or non-profit group is the buyer.  This is the second year that the bill has been in the House.  It gets its hearing before the Committee on the Judiciary II at 11 am.

The second bill, H1134, Cleanup of Abandoned Manufactured Homes, will be heard by the Environment Committee.  Funding for the cleanup of abandoned homes was passed in last year’s Solid Waste Disposal Act.  This bill would enhance that stream of funds.  More significantly, it would create more legal authority for municipalities and counties to condemn and seize abandoned homes.

H1134 is sponsored by Phillip Haire (D-Haywood).   Haire is the chair of the House Appropriations Committee.  Haire has pursued this legislation for over 4 years.

Sometimes I talk to local officials who are concerned about the housing crisis, but do not feel that they can do much to support their own neighborhoods. Next week, in fact, I’ll be traveling down to the southeastern corner of North Carolina to speak to county and city government staff about this very topic.

Their concerns are two fold. They want to do something to increase the supply of quality affordable housing. But they are also weary about all of the abandoned mobile homes in their backyards. It is hard to say which is a greater concern. If you talk to police or solid waste officers, it is definitely the latter. If you speak to someone in zoning or in community development, though, it might be either way.

The truth is that a County government can do a lot to make a difference.

Financing

Loan-to-value limits obstruct the ability of residents and non-profits to acquire mobile home parks. Providing financing for mobile home park acquisition is a very cost-efficient means for Counties to increase the supply of affordable housing in their environs.

Santa Cruz County, in California, is one example. Santa Cruz operates its own mobile home park purchase program. It provides financing to both resident-owned and non-profit owned groups that want to acquire mobile home parks. They can also provide financing for these groups after an acquisition, in the event that they want to invest in improvements to infrastructure in their park.

This financing is vital. In today’s market, as perhaps never before, it takes a substantial down payment in order to acquire a park. To the extent that mobile home park residents skew towards a population group with lower levels of wealth, then putting together 20 or 30 percent down is a significant obstacle. Even when a park is operating at almost 100 percent vacancy and producing significant cash flows, most banks will still want to limit the loan-to values to 80 percent.

Access to this kind of financing makes a different for non-profit groups, too. It is fine for a non-profit to put some capital into an acquisition. Nonetheless, it doesn’t help. When more capital must be allocated, the mission of a non-profit is necessarily constrained. It reduces the ability of that non-profit to do the next project.

Counties are also wise to provide financing support for infrastructure upgrades. Let’s not forget the likely inequality: most neighborhoods with single-family site built housing get their infrastructure through bond financing. It is really the least that a County can do.

Counties should seek a lien against the land when they make these loans. The results are impressive, though. Consider the cost-efficiency of a County that provides 20 percent of the acquisition funding for a $3 million park with 150 units. That is $4000 in debt per unit. With a lien against the land, the risk is far less.

Abandoned mobile homes

This is a problem that comes up over and over when I visit rural counties. Last week, I spoke to a planner in Vance County, North Carolina who needed a fix for an entire park that was full of abandoned homes. The park is next door to the County’s new development of affordable single family housing. It makes for quite an eyesore.

In North Carolina, we have passed a bill that provides about $300,000 in funding for counties to remove abandoned mobile homes. It is some money, but more is needed to clean up the 40,000 abandoned units that currently exist across the state.

The legal issues are tougher. It is one thing to condemn a property on land in the possession of the building’s owner. It is different when ownership is split. If the owner of the trailer is a finance company in New York, then even serving papers is beyond the ability of a County tax agent.