Mayor announces plan for vacant housing
What's the city's No. 1 housing problem? Most people would say it's the sheer number of abandoned properties, emptied out as the owners died, residents left, people were foreclosed on or investors walked.
As colleague Julie Scharper reports, Mayor Stephanie Rawlings-Blake has unveiled a vacancy-fighting plan to "expedite the sale of city-owned vacant properties, lure homebuyers with more than $1.5 million in incentives and ratchet up code enforcement on vacant homes in healthy neighborhoods or those primed for development."
It's no easy problem to attack, as Baltimore's previous mayors can attest. And some ideas have been tried before. The city announced in 2005 that it would up the ante on code enforcement on otherwise promising blocks marred by vacant homes, Scharper notes.
Some residents favor the tear-down route, turning vacant structures into vacant lots that are less likely to catch fire and harbor squatters. Detroit, which has an epidemic of abandoned homes, is trying to raze thousands of them.
Finding the money is tricky, though. Baltimore housing officials say the price tag for demolishing a house ranges between $10,000 and $65,000, depending on factors such as size. Detroit -- which doesn't have the money -- is depending on federal help.
The Dominion Group, one of Baltimore's larger real estate investment firms, thinks demolition is a good idea on "dead blocks." Here's how Dominion officials described the vacancy problem in a report to the city (with hard returns added by me for ease of reading):
Approximately 75% of the vacants are owned by speculators, would-be renovators and Regional and National Banks. In our estimation, a mere 5% of Baltimore’s vacant properties are owned by “True Renovators” who are in the process of renovating or who are attempting to aggregate in a particular block (in order to create economies of scale) so that they can renovate their vacant properties.
The exuberance of the 2005-2007 real estate market brought in buyers from all over and the activity during this period resulted in an unprecedented number of real estate transactions. As the market cooled and then turned down from 2007 to the present, many “investors” got stuck holding real estate that is literally worthless in today’s market. Many of these owners are not from Baltimore City, have no other vested interest in Baltimore City other than a few vacants, and do not have the resources necessary to successfully renovate their properties and put them into use.
The frustrating result of these facts is that it becomes practically impossible to do anything with a block with a high percentage of vacant properties with owners who are either out of town or who lack the resources to move forward and put the property back into use. The block is “dead” for all real estate investment intents and purposes.
How would you attack the vacancy problem?