Combining Policy and a Vision to Enable the Rebirth of Struggling Neighborhoods

by Maya Brennan – January 5, 2017

 

As awareness has grown about housing’s pivotal role in supporting quality of life and community well-being, national, state, and local leaders are developing comprehensive solutions that improve housing affordability, reduce concentrated poverty, and facilitate partnerships to further improve housing-related outcomes. Yet, blighted or abandoned properties—whether residential, commercial, or industrial—impede such housing and neighborhood revitalization efforts and can hurt residents’ health and impede individual success. According to research funded through the How Housing Matters to Families and Communities initiative, kindergarten readiness is related to where children grow up: children living near foreclosures or in a poor-quality home have weaker educational achievement, even at an early age.

While abandonment is more common in places that have experienced major economic or population shifts, such as communities in the Great Lakes region, near the Mississippi River, or along other historic shipping routes, growing and relatively new communities have pockets of underutilized and poorly maintained properties. Communities with large populations of marginalized groups are particularly vulnerable, as the shortage of decent and affordable homes gives low-income households few options. Recent reporting from the New York Times has highlighted the risk of foreclosed properties reentering the supply with contracts that attempt to put all liability for uninhabitable conditions on the new occupants. In communities with an older housing stock, these transfers have led to preventable cases of lead poisoning.

Even from a financial perspective, the high cost of an abandoned home—to restore, demolish, or allow to sit as is—makes preventing abandonment an essential policy goal for all local governments. Abandoned properties generate no tax revenue, reduce the value of nearby properties, and create expensive problems for fire and police departments and other municipal entities. In Atlanta, the city pays between $1.6 million and $2.9 million annually in police, fire, and code enforcement and other direct service costs related to blighted properties, according to research completed in 2016. The associated reduction in property values takes another $985,000 to $2.7 million out of the city’s coffers. A US Department of Housing and Urban Development Evidence Matters article from 2014 presented findings from nearly a decade of cost studies, including Philadelphia’s lose-lose situation, in which around 40,000 vacant private properties cost the city more than $20 million annually to address while reducing the city’s tax revenue by around $5 million annually. And that does not count the costs of the city-owned inventory of blighted properties. Despite this, demolition costs may be prohibitive at scale. A typical demolition may cost $4,800 to $7,000 per property. The per-property cost of demolition can rise as high as $40,000 if the problem property is attached to an occupied dwelling.

The value of preventing and rapidly addressing abandonment and the net budgetary gain from a strong code enforcement department becomes clear. The visionary and future-focused element of the work, however, can be easily overlooked when removing problems rather than creating something new. Along with prevention and abatement work, communities must think about interim strategies, such as urban greening, that allow short-term improvements to occur alongside long-term community-connected efforts to develop and implement a vision for the future reuse of the property.

A fresh look shows the potential for problem properties to be restored or reenvisioned to create safe and decent housing while improving quality of life for the existing low-income population.

A City-Led Success in Chicago

In Chicago, the Troubled Buildings Initiative has sought to restore poorly maintained properties and avoid the harms of abandonment. The initiative brings together the efforts of multiple city agencies and private partners to identify buildings that pose risks to the community, engage the owners, and ensure the properties return to good repair. The effort often uses court-appointed receivers to manage the repairs and ensure that the property no longer poses a threat to health or safety. Private citizens can also petition for a problem property to be forfeited to them in exchange for paying any delinquency and rehabilitation costs.

While the final step of the city’s code enforcement process had often been demolition, the initiative led to an intervention process that proceeds more rapidly: preventing many properties from deteriorating to the point of no return. Federal funds from the Community Development Block Grant program as well as city and private resources support the program cost, including offering repair subsidies when needed.

Among the restored properties is a three-building complex in the city’s Englewood neighborhood across from a high school. A pair of residents had been striving to keep the property decent despite widespread vacancies, an owner who stopped making mortgage payments, and the presence of gang activity. Through the initiative, the nonprofit Community Investment Corporation became the receiver and transferred o