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December 9, 2011

Cost to demolish Baltimore's vacants: $180 million

Here's a figure to chew on: $180 million -- the city's estimate for how much it would cost to tear down all the abandoned homes in Baltimore.

That comes from a new Government Accountability Office report on vacancy, which looks at the effects in select cities nationwide. (Hat tip to colleague John Fritze for noticing.)

"Officials in Baltimore, Detroit, and Chicago, in particular, stated that the resources required to demolish the large number of long-term vacant properties in those cities exceeds local budgets," the GAO wrote, adding: "Baltimore officials estimated that the city would need approximately $180 million to demolish the inventory of unsafe, unattended properties in the city."

About 16,000 properties in the city have been slapped with vacant building notices, indicating that they are not only empty but also unsafe or uninhabitable. About 22 percent are city-owned, according to Baltimore's housing agency.

Baltimore has long struggled to find a solution to this vexing problem. Martin O'Malley tried acquiring vacants through his Project 5000 effort while he was mayor. Successor Sheila Dixon thought a land bank would help. Mayor Stephanie Rawlings-Blake launched her own program, Vacants to Value, in hopes that targeted code enforcement, buyer incentives and a new attempt at streamlining the process of selling city-owned vacants are the answers.

Trying to find $180 million to just tear everything down hasn't been offered up in any plans I've seen, but readers have certainly talked about the idea.

MrRational suggested last year, "Bundle the titles for entire city blocks. Raze nearly every one of them. Cart off all the debris. Plan rerouting of pipes and streets. Keep 50% (or more) as grassy and parky. Auction off the rest to developer types...carefully and s l o w l y as each successive (and successful) project will make the next auction price higher."

Robert Dashiell wrote, "Baltimore ran a demolition derby during the Schmoke administration, led by then HCD Commissioner, Dan Henson. Then, as now, the better use of available funding would be to use it for renovation. The best chance many inner city resident have to live in decent houses in their neighborhoods and communities, as opposed to relocation, is if existing houses are rehabilitated."

What do you think? (And on a related note, can Baltimore expand by 10,000 families over the next 10 years as Rawlings-Blake hopes?)

Posted by Jamie Smith Hopkins at 6:00 AM | | Comments (25)
Categories: Vacancies
        

Comments

"Bundle the title for entire city blocks"

better yet, why not just get one of those Harry Potter wands and solve the whole thing with magic.

Let's put a realistic perspective on the tear down proposal. All the houses don't need to be torn down in one year. While $180 million might not be affordable, can the city afford $18 million per year over 10 years?

Blog/interview/article idea for you Jamie,

Get someone from the city to detail exactly what an individual would have to do if he/she wanted to purchase a city owned vacant, and turn it into an owner occupied home. Step by step, paint by numbers. Every single permit and license required to renovate.

If the current state of abandonment is Point A, and the goal of moving people in is Point B, you will see a rampart of government created impediments separating those two points.

We artificially choke supply, establish artificial price floors through Section 8, and then wonder why so many struggle to afford housing.

If Balt City plans on attracting 2K families a year for next 10 years they better put some serious money towards fixing, marketing & incentives. Like, BIG $. It can be done, there certainly are the attractions & amenities in the neighborhoods, but it is going to take a major, sustained effort.

Whats interesting is that in the largest real estate boom in decades, with a major drop in crime, increased performance in schools, a mayor with a national profile, along with a serious & dedicated marketing effort the city STILL lost population. Balt City went from 651,154 in 2000 down to 620,961 in 2010, a 4.6% drop. If the city is referring to a NET addition of 10K, and mind you she says "families" – a demo that is not and has not moved into the city, you can’t pull that off without a major plan & some serious investment.

Working with developers to also create a more dynamic of housing options would be important – rethink the rowhouse (look at DC & Boston with the small front yards). What are families buying in the counties – single family detached, we don’t build any of those.

This effort needs a bold plan with immense vision. curious to see who is going to lead it...

Even if we accept the rhetoric that $180,000,000 is correct (I have my doubts so I'd like to see what else it includes) $180M /16,000 = $11,250 per address is still not all that high if it yields a buildable site.

But that is a separate issue as the City should never have to foot the bill for more than a quarter of the properties. What the City needs to focus on is the overall design and redevelopment plan, the provision for municipal services, the schools, fire houses etc and how to incorporate compliance with that in the deeds the developers get.

And yeah Mike... a house here and there is pointless. To do this will require multiples of entire city blocks in close proximity being redeveloped at once. To NOT do this is to admit failure.

Do it now.
---

As to the question of whether the Mayor can attract 10,000 Income tax and RE tax paying citizen (or even just the "resident" she set the standard at) families... families with a choice about where they will live... will require having 2000-3000 family units of a high enough standard and in neighborhoods that will not just meet these peoples needs but exceed their expectations in order to compensate relative to their other choices.

hth

I think the attacks against the higher tax rate on vacants (as in DC) are unfounded. The Post cites the outlier "poor contractor", who "because of the rigid and egregious tax system, cannot complete his single unit rehab and is losing money". Something tells me there are other factors causing this guy to not be able to finish his rehab.

In any event, this city has such a busted tax structure, fueled by a busted city government. We are DISINCENTIVIZING people to live in our desirable neighborhoods. I want to know what percentage of the tax revenue in this city comes from Federal Hill, Locust Point, Canton, Mount Vernon, Bolton Hill, Ridgeley's, Fells, Washinton Hill. We need to shift the revenue focus off of residents in those neighborhoods and back to the parasites who are bleeding the city and its residents by holding these tenements and waiting for the city to take care of their problem.

What a joke. I am voting against every incumbent in the next election, and am even considering campaigning for people to do the same.

This is the bold kind of action our distressed and decaying city needs.

So much in this post to comment on:
1. Many of the vacant blocks in question are of dubious architectural value, and the dimensions of the homes make them difficult to renovate in ways that modern home buyers find attractive or competitive. Since you're not talking about renovations in existing successful communities, you're better off razing and replanning, lowering density, increasing green space, etc.

2. The Mayor managed to dodge the tax issue during the campaign, but her paltry plan for minor property tax relief guarantees she will not be able to reach her goal of 10,000 families. Even during the BOOM of the 2000s, when we thought that Baltimore would show population growth in the 2010 census, it didn't happen. Why? Property taxes are DOUBLE those in Baltimore County. Until the Mayor wakes up and deals with this problem realistically, she can set all the lofty goals she wants. She will not succeed.

$180 million well spent.

Doesn't anyone else realize the buildings aren't the problem with the city? How much would it cost to rid the city of violent criminals? The revolving door that they call the criminal justice system needs to be fixed first and foremost. Build more jails, enforce real sentences, and the housing problems will fix themselves. Do a crime, do real time, regardless of age. If you're old enough to pull a trigger or use a weapon, you're old enough to go to jail.

Remove the criminals, and good hard working people will buy these abandoned homes and rebuild them. But with bleeding hearts in city hall, the criminals will continue to rule the city, and they will continue to blame the buildings.

"Clearly the problem is just to big. We should just do nothing like we have for the last 30 years and see if the problem goes away." (that was just overheard at City hall)

People don't move into the city just because the mayor comes up with a catchy new slogan. Wanna see some major growth? Knock down a block or so of those vacant blighted buildings and put up a brand new state of the arts school (you know - like the ones they build in Howard County... Marriotts Ridge for example). And watch every person who has kids that lives in the city try to move close to that school.

That's the way growth works.... you build something that people want, and people move close to it.

There are 3 major problems that make people move out of the city or not move to the city at all.
1. Sky high property taxes.
2. Terrible education.
3. sky high crime rate (due to the baltimore city catch and release program of career criminals).

Fix those three problems and watch people flood into the city. Stick with the status quo and we get another decrease in the next census.

The city should raze the properties that they own.

Demolish and rebuild homes appropriate for modern living. Narrow row houses with few energy saving features aren't really what people want for their living space. Better to replace 10 rowhouses with 5 double wides or 5 individual houses with yards. Make parts of Baltimore more like an urban-suburban area and you'll have no problems selling the homes to taxpayers.

And much of the $180 million should be found through the federal government - maybe a jobs program or by diverting HUD funds for a while. Or maybe the state could kick in. It's in everyone's best interest to get rat-infested, boarded-up eyesores torn down and replaced with property ready to be developed.

In response to Robert Dashiell I have to respectfully disagree. There is just too much supply in Baltimore compared to demand, and the number of vacants makes that indisputable. Renovating these thousands of vacant homes (many of which are in such disrepair that they are basically a re-build, not renovation) is just a waste of a lot of money, plain and simple. If 10,000 families magically show up and want to stay in the city, deal with that (great) problem then.

Sorry it took me all day to approve these comments, guys! I was out on assignment with no access to a computer.

OK,either tear them down or sale them.Sale them for say,1K each.Then a bunch of people get rich.so,just tear them down and deal with it!

Does that $180 million figure include any savings that would be recovered through the reduced number of police and fire department hours that are needed to service these vacant and abandoned properties?

I doubt it, MCG, but there was no detail at all about how the figure was arrived at.

The City Paper's Edward Ericson blogs more about costs and benefits here: http://blogs.citypaper.com/index.php/2011/12/the-cost-of-vacant-houses-collapses-and-demolition/

These comments make me sad for our nation. Baltimore is one of the only cities left in america that hasn't torn down the majority of its architectural heritage. Downtown dc is entirely built over, New York is demoing more and more of its Italianate buildings. Contrary to what people are saying, our row homes are indeed "architecturally significant." I mean, god, have you ever even looked at them? We need more narrow, Italianate buildings, not less of them. Replacing them with new pieces of architectural, modernist garbage is not the answer. Why do we even have to renovate them at all? Baltimore isn't Dc or New York, it's gritty and industrial. We should focus on subsidizing port jobs and manufacturing.

If there are 16,000 vacants, only 8000 need be torn down because the minute half of the vacants are flattened the decrease in supply causes the other half to escalate in value, sufficient to justify investment.

If we knock down every building in the city other than the one I live in, my property value will skyrocket! I'll be fabulously well-to-do!

There may be a down side, but I can't see it.

I really think everyone should take the time to check out what Come Home Baltimore is doing. Visit ComeHome Baltimore.com and see what a vacant block can turn into.

Tear any that are full blocks down
Allow developers to submit site plans (no bldg) for preapproval
Auction or sell the blocks for cheap with condition that they must build on them within 1 year (bond required to guarantee)
Land/New houses will be TAX exempt for 7 years from when sold by city
City gets additional fee of 25% on capital gain based on increase of value (twice) - first from developer based on difference between permit cost and sale price to new owner (to compensate some for cheap land) and second from next owner when they sell (to compensate some for no taxes)
Note - permit fees in the city are based on construction costs so developers can pay the city more upfront for permits to avoid their capital gain fee
After 7 years the city has an increase in tax base due to better housing stock
If the first owner doesn't sell for a long time then the city just has more potential appreciation when they do sell

I must say that all of these comments are excellent, however there is one common factor in all of this. Everyone wants someone else to establish the comforts. Someone must develop the land, rebuild the infrastructure. Educate the children, police the city and all the other obstacles ( or perceived obstacles) prior to any commitment. What's really needed are people that are dedicated to change and are willing to participate in that change. Why not buy a home among criminals and develop a productive neighborhood watch program. Why not buy a home in the current condition in a neighborhood with a dilapidated school to develop a neighborhood association that will holds its elected official accountable. All of the problems are well known. It's the action that's missing...

why don't they demolish every other rowhouse and sell the house and lot next to it as a yard. that would attract families!

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About Jamie Smith Hopkins
Jamie Smith Hopkins, a Baltimore Sun reporter since 1999, writes about the regional economy. Her reporting on the housing market has won national and local awards. Hopkins is a Columbia native and has lived in Maryland all her life, save for 10 months spent covering schools in Ames, Iowa.
She trained to become a wonk by spending large chunks of time as a geek and an insufferable know-it-all.
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