Lisa Perry and Sara Geer, Courier-Times Staff Writers

Mayor Greg York is upset that his hands are tied and he is helpless to do anything about so many of New Castle's abandoned houses.

"We don't want the 'empty-tooth' syndrome," York said recently, referring to the visual effect that abandoned property has in a residential neighborhood. "We want these houses back into the tax base and owned by private individuals."

But impediments to that goal keep popping up. The latest came in the form of on-line auction websites featuring New Castle houses selling at bargain basement prices.

"These people have been watching too much late-night TV. They think they can 'flip' these houses," York said, citing a local, abandoned house that recently sold online at auction for $620. York said that when these new owners, especially ones from out of state, find the degree of damage far beyond their capability or motivation to repair, they write it off as a loss and again abandon it.

Online auctions, especially state government tax sales, have a detrimental impact on New Castle's abandoned house situation.

"It just delays the process," York said. New Castle homes recently have been purchased by absentee owners in Canada, Virginia, and California, among other locations.

In 2013, New Castle tore down 25 houses, depleting the city's $85,000 fund set aside for demolition. Each demolition costs the city between $5,000 and $8,000, depending on how many Dumpsters must be towed away during the process.

By February, notification should be made whether New Castle qualified for a state grant applied for in November that would make available more funds to demolish 110 more houses in need of leveling. A partial list of homes to be demolished can be found online at www.cityofnewcastle.net.

"These are true demos," York said, "beyond repair. Five to seven of them are burnouts. One is from 2008. It's been standing all these years. It's embarrassing."

New Castle and Henry County aren't alone in the struggle against abandoned houses.

Indiana has the dubious distinction of having the highest percentage of abandoned, foreclosed homes in the country, Indiana Lt. Gov. Sue Ellspermann said in a recent news release. Ellspermann heads the Indiana Housing and Community Development Authority, which produced a series of public forums to address the statewide blight.

IHCDA plans two more public forums during the weeks of Jan. 6 and Jan. 13 in Richmond and Shelbyville, but specific dates and times had not been set as of Dec. 27, IHCDA Outreach and Communications Project Manager Brian Philps said.

Ellspermann reported that roughly 30 percent of Indiana's foreclosed homes are abandoned. They result in blight, reduced property values, and a drain on municipal resources.

The U.S. Department of the Treasury has established a Hardest Hit Fund that provides financial assistance to families in the states most impacted by the downturn of the housing market. Indiana was awarded more than $221 million under the Hardest Hit Fund and targets low- to moderate-income homeowners. A portion of the Hardest Hit Fund may be used to demolish blighted and abandoned homes that are beyond repair and stabilize property values, according to Ellspermann.

Philps said $14 million in Hardest Hit Funds are earmarked for IHCDA Region 5, which encompasses Henry County. Three regional entities handling Hardest Hit Funds distribution to Region 5 are Affordable Housing Corp. in Marion, PathStone Corp. in Muncie, and Telamon, AKA Transition Resources in Pendleton.

There are no guaranteed allocations or awards of Hardest Hit Funds, Philps said. The money is awarded on a competitive basis.