Monday, August 26, 2013

Chicago loses court challenge to vacant building registry -

Chicago loses court challenge to vacant building registry -
"Vacant buildings in foreclosure with mortgages backed by Fannie Mae and Freddie Mac do not have to follow Chicago’s vacant building ordinance, a federal judge has ruled. The decision, filed Friday in Chicago by U.S. District Court Judge Thomas Durkin, deals a blow to the city, which is trying to grapple with thousands of empty buildings caught up in a lengthy foreclosure process and dragging down neighborhoods. It also has national implications. More than 1,000 municipalities around the country, by one count, have laws that require the registration and maintenance of vacant properties."
The ordinance requires the building owner to pay a $500 fee, among other things, and the judge saw this as an effort by the city to tax the federal government, which has been unconstitutional since McCulloch v. Maryland in 1819.  This is just a district court so it isn't a precedent for any other court, but it could encourage the feds to try the same argument elsewhere.  That's unfortunate, because cities need some way to address this problem. We live in a society where it seems that financial institutions can do whatever they want with no consequences, and governments are restricted by courts and legislatures when they try to protect us from the "externalities" of business transactions.

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