TO: Mayor and City Council
THROUGH: Krishna Namburi, City Manager
FROM: Kristin Retherford, Director, Community Planning & Development
SUBJECT:
title
Continuation of the City of Salem Lien Forgiveness Program (LFP) authorizing the City’s Health Officer to forgive liens in the City’s Lien Docket resulting from unpaid civil penalties and derelict structure fees for violations of the Property Maintenance Code, if all Property Maintenance Code Violations on the property are corrected.
Ward(s): All Wards
Councilor(s): All Councilors
Neighborhood(s): All Neighborhoods
Result Area(s): Safe and Healthy Community; Welcoming and Livable Community
end
SUMMARY:
summary
Resolution 2026-20 will extend the LFP beyond the June 30, 2026, sunset date until June 30, 2027. The LFP authorizes the City’s Health Officer to forgive liens in the City’s Lien Docket resulting from unpaid civil penalties and derelict structure fees for violations of the Property Maintenance Code, if all Property Maintenance Code Violations are corrected. This extension will allow staff additional time to research property ownership, build relationships, and increase participation in the program. The LFP encourages property owners to restore and repair their properties, thereby supporting community livability. The LFP also reduces barriers to property transfers, thereby creating additional housing opportunities.
end
ISSUE:
Shall City Council adopt Resolution 2026-20, extending the City’s Lien Forgiveness Program until June 30, 2027, thereby extending the duration of the authorization for the City’s Health Officer to forgive liens in the City’s Lien Docket, and the associated penalties, fees, and interest, resulting from violations of the Property Maintenance Code, if all Property Maintenance Code violations on the property are corrected?
RECOMMENDATION:
recommendation
Adopt Resolution 2026-20, extending the City’s Lien Forgiveness Program until June 30, 2027, thereby extending the duration of the authorization for the City’s Health Officer to forgive liens in the City’s Lien Docket, and the associated penalties, fees, and interest, resulting from violations of the Property Maintenance Code, if all Property Maintenance Code violations on the property are corrected.
body
FACTS AND FINDINGS:
Since inception in November of 2025, twenty-two (22) of the seventy-eight (78) eligible property owners have applied for the City’s LFP. This represents a current participation rate of twenty-eight percent (28%). All twenty-two (22) property owners who applied were accepted into the LFP, thirteen (13) of the applicants have completed remediation of their properties, and nine (9) of the applicants are actively working to correct the Property Maintenance Code violations on their properties. To date, the City of Salem has forgiven forty (40) liens through the LFP with a total value of two-hundred twelve thousand dollars ($212,000).
Salem Revised Code Chapter 50, Property Maintenance Code, establishes minimum requirements and standards for structures and premises. The Property Maintenance Code serves to promote the protection of life safety, and for safe and sanitary maintenance of residential and nonresidential premises within the city. It is the policy of the City to work with property owners to obtain voluntary correction of Property Maintenance Code violations. However, monetary civil penalties and derelict structure fees are imposed in certain situations including where the violation was known or intentional, a repeat of a similar violation, or attempts to obtain voluntary correction of the code violations are unsuccessful.
Unpaid monetary civil penalties and derelict structure fees are placed in the City Lien Docket where they may accumulate additional penalties, fees, and interest. City Staff has received communications from impacted property owners that the financial burdens of the liens inhibit their ability to pay for rehabilitating their property, especially where the property owner is on limited or fixed income.
Civil penalties and derelict structure fees in the City Lien Docket should be paid in full before property ownership is transferred or before the property is used as collateral for rehabilitation loans, however, it’s not uncommon for properties to transfer ownership without the liens being identified or settled through the transaction. City Staff have received communications from potential purchasers that the liens are a barrier to purchasing the property and from past purchasers who have discovered the existence of the liens. The more distressed the property the greater a barrier the liens are as the property condition reduces the property’s value and at the same time the purchaser will have higher costs to correct the code violations.
The financial implications of the liens in the City’s Lien Docket resulting from violations of the Property Maintenance Code may inhibit property owners from rehabilitating their properties or potential new owners from purchasing the properties. This works against the City’s goals of Good Governance, Safe and Healthy Community, and Welcoming and Livable Community. Staff regularly receive complaints from neighboring property owners and community members regarding distressed properties. These are frequently the same properties that have acquired substantial lien encumbrances resulting from the Property Maintenance Code violations.
To address these concerns, Staff proposed establishing a limited duration lien forgiveness program from November 10, 2025, through June 30, 2026, which was approved by City Council with the adoption of Resolution 2025-25 on October 27, 2025. The proposed continuation of the LFP will continue the program beyond the current June 30, 2026, sunset date for eligible property owners. Continuing the program will allow Code Compliance staff additional time to research property ownership, build relationships with property owners, and increase participation in the program. The LFP encourages property owners to restore and repair properties, supports community livability, reduces barriers to property transfers by removing liens on remediated properties and allowing for subordination of existing liens if the new owners agree to correct the code violations, and helps create additional housing opportunities.
Examples of superior LFP outcomes include properties located at 1850 Chemeketa St. NE, 1270 Lancaster Drive SE, and 1696 Tripp Street SE. The Chemeketa and Tripp Street properties held derelict residences, and the Lancaster building was a derelict restaurant. These properties were all completely rehabilitated, creating new housing opportunities in homes that were previously deemed unfit to inhabit, and the opening of a new buffet restaurant, adding more job opportunities for Salem residents.
Staff did not receive the expected response from property owners during the initial phase of the LFP. City Code Compliance staff sent letters to owners of properties with current Property Maintenance Code violations and with outstanding liens, informing them of the LFP. Many of the letters were returned without forwarding addresses and fifty-six (56) property owners did not respond at all. Additionally, during the time the LFP has been active, forty-one (41) new properties have transferred from delinquent fee payment into the City’s Lien Docket for unpaid civil penalties and derelict structure fees. The owners of these properties have not yet been notified of the LFP, and our community will benefit from their inclusion in the program. Extending the duration of the LFP will provide staff with more time to locate and educate property owners and encourage their voluntary compliance before enforcement actions are necessary. Getting the owners’ attention is key to program success, and staff are prepared to increase efforts spreading the word about the LFP by presenting the program at neighborhood association meetings and creating marketing efforts to ensure all affected property owners are aware of the program. Increased participation in the program is anticipated to reduce the strain on limited code enforcement resources by achieving property remediation through voluntary compliance rather than enhanced enforcement actions.
Reducing the number of properties that require monthly visits by a code enforcement officer will save the City approximately sixty-four dollars ($64.00) per property, per month. With the current list of twenty-two (22) properties that are being remediated through the LFP to date, the City will see a monthly savings of approximately one-thousand four-hundred and eight dollars ($1,408.00).
When working with property owners, voluntary compliance remains the City’s highest priority. However, once the LFP ends, Compliance Services staff will initiate additional enforcement actions to address non-compliant properties, which is anticipated to result in additional fines, penalties, and interest, as well as the recording of additional liens. Code Compliance staff will also explore the feasibility of referring unpaid penalties to collections to incentivize property owners to remediate their properties quickly, and recording liens against the property with the County to further ensure that the liens are paid when the property is sold. Extending the LFP will allow for additional education and outreach to ensure property owners understand the enforcement actions that will occur once the LFP ends, and the substantial benefits of participating in the program.
A recent review of the City’s Lien Docket shows there are six-hundred and five (605) current liens held on one-hundred and one (101) separate properties. The total value of those liens including all penalties, fees and interest, is eight-hundred sixty-nine thousand, six-hundred fourteen dollars and nine cents ($869,614.09). Staff needs time to conduct more extensive research and to establish contact with those property owners who did not respond to the initial LFP notice as well as those property owners who have become eligible to participate in the program since it began. Staff anticipates increased participation in the LFP through additional outreach and education efforts if the program is extended, leading to additional cost savings to the city and enhanced community livability and housing availability.
BACKGROUND:
The City of Salem requires all property owners to maintain their properties in compliance with the minimum property maintenance and housing standards established in Salem Revised Code (SRC) Chapter 50 - Property Maintenance. The City’s Health Officer, along with enforcement officers, are tasked to investigate violations of the Property Maintenance Code and encourage property owners to voluntarily correct any violations.
Property owners who fail to correct Property Maintenance Code violations are issued an Enforcement Order, with civil penalties not to exceed two-thousand dollars ($2,000.00) per violation. SRC Sec. 20J.180 requires civil penalties that remain unpaid for thirty (30) calendar days be entered in City Lien Docket. Thereafter, if the Property Maintenance Code violations have not been corrected, a new civil penalty is imposed for each violation that remains, and the process repeats itself until the code violations are corrected.
The City’s Lien Docket is maintained in the Finance Division in accordance with SRC Sec. 21.060 - Docket of City Liens.
The LFP commenced on November 10, 2025. It is a limited duration program designed to incentivize property owners to voluntarily correct public nuisances, derelict structures, and other Property Maintenance Code violations on their properties. The LFP is currently set to end on June 30, 2026.
Mitch Nickolds
Compliance Services Manager
Attachments:
1. Resolution 2026-20
2. Attachment A to Resolution 2026-20