Jennifer R. Leonard and Alan Mallach

The mission of the Center for Community Progress is to create vibrant communities primarily through the reuse of vacant, abandoned, and problem properties in America’s cities and towns. Community Progress helps local and state governments seize the potential of these properties for the economic and social benefit of their communities. We help leaders advocate for and implement the policy changes to prevent abandonment and to reuse these properties.

Locations421 Garland Street, Suite AFlint, Michigan 48503

1001 Connecticut Avenue, NW, Suite 1235Washington, D.C. 20036

(877) 542-4842

communityprogress.net TRANSFORMING VACANT PROPERTIES IN

TODAY’S AMERICA

AcknowledgementsCommunity Progress wishes to thank Benjamin de la Peña and the Rockefeller Foundation for generously supporting the writing and production of this publication. Restoring Properties, Rebuilding Communities: Transforming Vacant Properties in Today’s America was written by Jennifer Leonard/Community Progress and Alan Mallach/Community Progress and The Brookings Institution, with additional writing and research by Ben Capraro/MK Communications, Mara D’Angelo/Smart Growth America, Sergio Ritacco/The Metropolitan Institute at Virginia Tech, and Joe Schilling/The Metropolitan Institute at Virginia Tech. Special thanks to those whose additional insights and editing improved the final product: the Community Progress team especially Dan Kildee and Courtney Knox, Anthony Armstrong/Buffalo LISC, Danielle Bober/Community Legal Resources, Michael Braverman/Baltimore Housing, Paul Brophy/Brophy & Reilly LLC, Frank Ford/Neighborhood Progress, Inc., Jason Hessler/ Baltimore Housing, Marilyn Katz/MK Communications, LISC Community Safety Initiative, Diane Silva Martinez/City of Dan Diego, Shamyle Nesfield/Community Legal Resources, Stacy Pugh/Slavic Village Development, Lisa Schamess, Michael Schramm/Case Western Reserve University, and Diane Sterner/Housing and Community Development Network of New Jersey. Design and production by BLANK-Design Communications.

ContentsPreface

Introduction

The Challenge and Opportunity 9 Asnapshot

Putting the Pieces Together: Understanding the Problem, Crafting the Solution15 It’stheeconomy17 Themunicipalfiscalcrisis18 Foreclosures:compoundingacomplexsituation20 Lawsandpublicpoliciesmakeadifference

Progress and Challenges23 Signsofprogress29 Arenewwaysofthinkingemerging?33 Anewfederalpolicyclimate

Framing a Policy Agenda for Vacant and Abandoned Properties39 Recommendations40 Tenprinciplestoguidethevacantpropertyagenda

Conclusion

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5

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7

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23

39

September 2010

The Center for Community Progress was created

in 2010 to help local and state governments seize

the opportunity to reuse vacant and abandoned

properties for the economic and social benefit

of their communities. Including some of the

nation’s leading practitioners, policy architects,

and advocates, Community Progress is the

national resource for policy, information,

capacity building, training, and technical

assistance on the reuse and redevelopment of

vacant, abandoned, and problem properties.

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Pref

ace

CommunityProgressgrewoutoftwoorganiza-

tionsthatcameintobeingduringtheearlyyears

ofthepastdecade,theNationalVacantProperties

CampaignandtheGeneseeInstitute,which

broughtpublicattentiontotheissueofvacant

andproblempropertiesanddemonstratedthat

effectivepublicandprivateactioncanhavea

transformativeeffectontheproblem.

AsCommunityProgressstartsitswork,thispaper

sumsuptheexperienceoftheCampaignand

theInstituteinrecentyears,reflectingourunder-

standingofthemanyfactorsthatcauseproperties

tobecomevacantandabandoned,andputting

forwardanewbodyoftoolsandpolicyinitiatives

thatcommunitiescanusetoreturnvacantand

abandonedpropertiestoproductiveuse.We

highlightsomeofthesuccessfuleffortsofcommu-

nitiesaroundthecountry,andshowhowtheyfit

intoalarger,comprehensiveapproach.

Thepresentrecessionandforeclosurecrisis

threatencommunitieswithratesofvacantand

abandonedpropertiesmanyhaveneverseen

before.Ourexperienceteachesus,though,that

bold,swiftactioncoupledwithpolicyreforms

designedtofurtherthelong-termhealthof

communitiescanturnthistimeofcrisisintoone

ofopportunity.Achievingsuchatransformation

willrequirecollaborationbetweenthepublic

andprivatesectors,andathoroughunder-

standingofhowpopulationsandeconomic

activityareshiftingacrossAmerica.Itwill

requirereworkingstateandlocallawstoensure

thatmunicipalitieshavethetoolstheyneedto

acquire,manage,andreuselandandbuildings

tomakepossiblethequickreturnofvacantand

abandonedpropertiestousesthatbenefitthe

community.Thisreportsetsforthaseriesof

principles,andoutlinesthespecificrolesthat

differentlevelsofgovernmentanddifferent

privatesectorstakeholderscanplay,inmaking

thisopportunityareality.

TheCenterforCommunityProgressstands

readytohelpguidepolicymakersandcommunity

leaders,practitioners,anddevelopers,intheir

effortstoeradicatevacancyandabandonment

andforgethepathtobuildingstronger,healthier

Americancommunities.

Policymakers and community leaders are committing themselves to transforming the way we intervene to turn abandoned properties into vibrant places.

IntroductionAmerica’surban,suburban,andruralcommunitieshavestruggledfordecades

withvacant,abandoned,andproblemproperties.1Today’senvironmentis

unique,however,aspowerfulforces—mostnotablytheforeclosureandeconomic

crises—threatentoundodecadesofgrowth,development,andreinvestment

inourcommunities.

AspeopleacrossAmericafacethepresence

ofboarded-uphomesthatstrippropertiesof

theirvalueandownersoftheirequity,playnear

factoriesthatloomlifelesslyovertheirneighbor-

hoods,orwalkbyvacantstorefrontsononce-busy

commercialstreets,policymakersandcommunity

leadersareslowlycommittingthemselvesto

transformingthewayweintervenetoturnaban-

donedpropertiesintovibrantplaces.

Inthefaceofadramaticallychangedlandscape,

theyarestartingtorecognizethatourcommu-

nitieswillnotthriveifwecontinuetousethe

strategiesofthepast,goingprojectbyproject,

dealbydeal.Tostemtheflowofabandonment,

andreversethattrendinordertousetensof

thousandsofpropertiesinproductiveways,every

sector—thepublic,private,and“third”(nonprofit

andphilanthropy)sectors—willhavetoplaya

strategicandintentionalroletoreshapehow

wedealwithproperties,howweacquireland,

manageit,anddisposeofitforreuse.

Whileindicatorspointtocontinuedstressinthe

housingmarketandcontinuedelevatedratesof

foreclosuresandvacancyintheimmediatefuture,

wecanpointtoprovenexamplesofsuccessin

tacklingtheseissues.Asleadersadoptnewpolicies

tofurthercomprehensivecommunityrevitalization,

localstakeholdersareworkingtogethertoaddress

theirproblems,andbuildstrategiescapableof

leadingtolong-termsustainablechange.

Thisreportisgroundedinourexperienceworking

throughoutthecountrywithnonprofitorganiza-

tions,grassrootsleaders,publicofficials,andothers

whohavechampionedcomprehensivesolutions

tovacantpropertychallenges.Aswehavetravelled

totheircommunities,wehavelearnedfromthem

howlocalstrategiescancatalyzechange,andseen

howtheireffortscantransformcommunities.

Wehopethroughthisreporttoencourageall

thoseconcernedwiththisissuetobuildatruly

effectiveagendatoturnvacant,abandoned,

andproblempropertiesintoproductiveplacesin

ourcommunities,basednotonone-offdeal-

orientedtransactions,butontruesystemicreform.

Letusmakesurethattheuniquemoment

ofopportunitythatwehavetodayisnotwasted.

5

Behind every vacant property there is a story. The trick is to find that story and

address the underlying issues.

The ChallengeDespiteisolatedsuccessesandcommunityinnovations,vacantandunderused

propertiespresentalong-termchallengethatshowsnosignoflessening.Yetwith

rareexceptions,bothgovernmentsandprivateentitieshaveapproachedvacant

andabandonedpropertiesasacase-by-case,transactionalissue,ratherthan

lookedattheunderlyingsystemicissuesthatperpetuatethecycleofneglect.

Tobreakthatcycle,wemustfirstunderstandtheissue.Successwilldependon

ourunderstandingofwhatvacantandabandonedpropertiesare,whythey

becomevacant,andthedifferenttrendsthataffectcommunities.

Everyvacantpropertyisdifferent.AsSanDiego’s

ChiefDeputyCityAttorney,DianeSilva-Martinez,

says,“Behindeveryvacantpropertythereisastory.

Thetrickistofindthatstoryandaddressthe

underlyingissues.”Still,vacantpropertiesfallinto

alimitednumberofcategoriesalongdifferent

dimensionsthat,takenasawhole,arelikelyto

definetheirfuture.Thetypeofownership,property

type,physicalcharacteristics,geography,andmore

allaffecttheirpotentialforrevitalizationandreuse.

Whilesingle-familyhousesaccountforthelargest

number,vacantpropertiescanberesidential,

commercial,orindustrial,andtheinventoryof

large,potentiallyenvironmentallycontaminated

propertiesknownasbrownfieldsareoftenthe

mosttroublesomebecausetheymayrequire

remediationbeforereuse.

Notallvacantandabandonedpropertiesare

buildings.Oldercitiesaredottedwithlandwhere

homes,factories,orstoresoncestood;citieslike

FlintorPhiladelphiacontaintensofthousandsof

vacantlotswherebuildingsusedtobe.Although

generallyconsideredlessofanuisancethan

vacant,abandonedbuildings,unmanagedvacant

lotscanalsobeaproblem,becomingdumping

groundsandblightingtheirneighborhood.

Insomecitiesvacantpropertiescanbefound

inmostneighborhoods,onalmosteveryblock.

Thesecities,likeDetroitorYoungstown,

haverecentlyattractedintensenationalmedia

and Opportunity

7

attention.2Inothercities,likePhiladelphia

orNewHaven,theremaybeaseriousvacancy

probleminsomeneighborhoodsbutnotcitywide.

Andinyetothercities,oneseesonlyspot

abandonment,whereaparticularbuildinghas

beenabandonedforparticular,uniquereasons.

Whereavacantpropertyislocatedmay

determineitsultimatefate.Whileavacanthouse

inmanypartsofDetroitislikelytostayempty,

beabandoned,andultimatelytorndown,

asimilarhouseinLosAngelesmightreadilyfind

abuyerwillingtoinvestthemoneyneededto

putitbackintouse.Whilemanyvacantproperties

arelocatedinareaswherethereislittleor

nomarketdemandforhousingofanytypeor

condition,othersmaybelocatedinareaswhere

thereisdemand,butnotatpriceshighenough

tomakehomebuyerswillingtoinvesttheamount

Data show that the number of vacant properties measured by vacancy rates have risen steadily for over 40 years.

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ofmoneyneededtorestoreanabandoned

propertytosound,usablecondition.Stillothers

areeconomicallysoundpropositions,butare

hungupbylegal,procedural,orotherproblems.

Understandingthesedifferencesiscriticaltobeing

abletocomeupwithsound,effectivestrategies.

Finally,vacantandabandonedpropertiescan

bedistinguishedbytheirlegalstatus,whichcan

beasimportantinultimatelydeterminingthe

futureofapropertyasitstypeorlocation.

Whilenearlyallvacantbuildingsstartoutin

privateownership,eitherbyanowner-occupant

orinvestor,abandonmentandforeclosureoften

gohandinhand—eitherabandonmentleadsto

foreclosure,orforeclosureleadstoabandonment.

Thatcanmeaneithertaxforeclosure,wherea

municipalityorcountytakesthepropertyorputs

itupforsalefortheowner’sfailuretopayproperty

taxes;ormortgageforeclosure,wherethelenderor

mortgageetakesthepropertyorputsitupforsale

fortheowner’sfailuretomakemortgagepayments.

Intheendthough,thelegalstatusofaproperty

neverdrivesitsfuturebyitself—localmarket

conditions,coupledwiththelegalstatus,local

governmentpoliciesandthepracticesofthe

publicorprivateentityresponsible—theowner,

thelenderorthelocalgovernment—thatultimately

determinetheproperty’sfate.

A snapshotItisnoteasytoaccuratelyassessthenumberof

vacantorabandonedpropertiesinacityorregion,

letalonetheUnitedStates.However,datashow

thatthenumberofvacantpropertiesmeasuredby

vacancyrates—notjustabandonedproperties,

butalsothosepropertiesbeingactivelymarketed

forsaleorrent—haverisensteadilyforover

40years(Figure1).Althoughsomevacant

housingisneededinanyhousingmarket(houses

forsale,orapartmentsforrentareneededto

offerchoicestopeoplewhoaremoving),itiswhen

vacanthousesdonotreadilyfindbuyersor

tenantsthattheybecomeaproblem,andbegin

toturnintoabandonedproperties.

Homeownervacancyratestodayareapproaching

threepercent,whilerentalvacancyratesare

nearing11percent.Althoughthemajorityofthese

vacantpropertiesarenotproblemorabandoned

properties,thedramaticincreaseinoverall

Local market conditions, coupled with legal status, local government policies, and practices of the public or private entity responsible ultimately determines the property’s fate.

vacancies,particularlysince2000,islikely

tobeassociatedwithaparallelincreasein

abandonedproperties.

Corroborationforthisisfoundinthecensuscount

ofother vacantproperties.Other vacantproperties

arethosethatareneitherbeingofferedforsale

orrent,heldforoccupancy,orusedforseasonalor

migranthousing.Thisisascloseasurrogatefor

abandonedvacantpropertiesasthecensusoffers.

Between1970and2000,thenumberofother

vacantpropertiesmorethandoubled,going

fromjustunderonemillionunitsto2.3million.

Duringthesameperiod,thetotalnumberof

housingunitsintheUnitedStatesincreased

aswell,butonlybyroughlytwo-thirds,from69to

116million.Other vacantpropertiesmadeup

oneoutofevery50dwellingunitsinthecountry.

Accordingtothe2008AmericanCommunity

Survey,thenumberdoubledagainbetween

2000and2008,bywhichyear other vacant

propertiesnationallytotaled4.7millionoroneof

every28dwellings.3

Similartrendscanbefoundinmanycities.

Figure2showstheother vacantpercentagefor

fouroldercitiesinNewJersey.OnlyPaterson,

whichsawalargeimmigrantinfluxduringthis

period,failedtoseeasharpincreaseinthe

numberandpercentageofother vacantproperties.

Whileuntilrecentlythecommunitiesmostvisibly

affectedbyvacantpropertieswerefoundmainlyin

theoldercitiesandtownsoftheNortheastand

Midwest,thecombinationoftheforeclosure

crisisandtherecessionhasspreadtheproblem

acrossthecountry.Althoughitishardtopin

downpreciselyhowtheforeclosurecrisishas

affectedvacancyandabandonment,

UnitedStatesPostalService(USPS)vacancy

data4canoffersomeidea.

SOURCE OF RECESSION DATA: National Bureauof Economic Research, Inc.

AnnUAL renTAL AnD HOmeOwner VACAnCy rATeS FOr THe UnITeD STATeS: 1968–2009

1968 1972 1976 1980 1984 1988 1992 1996 2000 2004 2008

Fig 1

10

8

6

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RecessionRentalVacanciesHomeownerVacancies

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11TheUSPSdatashowadevastatingpicture,

particularlyfortraditionallyweakmarkets,

wherethenumberofvacantpropertiesishigh

andcontinuingtorise,asshowninFigure3

(followingpage).IncitieslikeFlint,Gary,

andDetroit,morethanoneoutofeveryfive

addressesisvacant.Inthesecities,thecombined

vacantandno-statdataareagoodreflectionof

abandonmentsincetheno-statdatalikely

includepropertiesthatareuninhabitableor

unabletobeoccupied.Withasingleexception

(Youngstownbetween2008and2009),the

percentageofvacantaddresseshasrisenevery

year in each of these cities. Theone-yeardropin

Youngstownisprobablytheresultofthemany

demolitionscarriedoutbythecitythatyear.

It is clear that, although vacancy conditions are less severe in Sunbelt cities, the data shows a trend that is much the same as in the distressed older cities.

SOURCE: US Census ofHousing.

OTHer VACAnT UnITS In new jerSey CITIeS: 1970–2000

Camden newark Paterson Trenton

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Fig 2

12

10

8

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1970198019902000

Figure4showssimilarlycombinedvacantand

no-statdataforfiveSunbeltcities.Inthesecities,

vacantorno-statpropertiesincludeseasonal

homesaswellashousesunderconstruction—or,

intoday’smarket,houseswhereconstruction

hasbeenhaltedbeforecompletion.Evenwith

thatqualification,itisclearthatalthoughvacancy

conditionsarelesssevere,thedatashowsa

trendthatismuchthesameasinthedistressed

oldercities.

SOURCE: US Postal Service. Data aggregates vacant and no-stat addresses.

VACAnT PrOPerTIeS In FIVe SUnBeLT CITIeS: 2006–2010

miami Tampa Phoenix Fort myers Las Vegas

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20062007200820092010

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SOURCE: US Postal Service. Data aggregates vacant and no-stat addresses.

VACAnT PrOPerTIeS In SIx OLDer CITIeS: 2006–2010

Detroit Buffalo Birmingham Flint Gary youngstown

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20062007200820092010

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Onlylimiteddataontheamountofvacant,

abandoned,orunderutilizedcommercialand

industrialpropertiesisavailable.Aswiththe

residentialrealestatemarket,theUSPSevidence

indicatesthattheseinventoriesarelikewise

experiencingexceptionallyhighlevelsofvacancy

andabandonment.Figure5showsasteady

increaseinvacantandno-statbusinessaddresses

overthepastthreeyears5inbothRustbeltand

Sunbeltcities,withasimilartrajectory.

Whilenohistoricdatasetisavailablefor

comparison,thedatainFigure5isconsistent

withreportsofincreasedvacanciescomingfrom

thecommercialrealestateindustry.According

todatareleasedbytherealestateresearchfirm

ReisInc.,thevacancyrateatAmericanstripmalls

reached10.6percentinthefourthquarterof

2009,aneighteen-yearhigh,andshoppingmall

vacancywasthehighestinatleast10years,

reaching8.8percent.6Atthesametime,

thevacancyrateofcommercialofficespace

intheU.S.roseto17.2percent,alevelunseen

since1994.7

Vacancyratesforindustrialpropertiesinmany

partsofthecountryhavealsoreachedpeak

levels,withChicagoat12.2percentinthefourth

quarterof2009(thehighestin19years);8

WashingtonD.C.at15.8percentinthefourth

quarterof2009(thehighestin16years);9andthe

TwinCitiesat16.7percentinthefirsthalfof2010

(thehighestintenyears).10

SOURCE: US Postal Service. Data aggregates vacant and no-stat addresses.

VACAnT BUSIneSS ADDreSSeS: 2008–2010

Buffalo Birmingham Flint youngstown miami Tampa Phoenix

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20082009201040

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while all of the factors leading to abandonment are related, market or economic forces are usually the ones that most powerfully determine the outcomes of vacant properties.

Understanding the Problem,Crafting the SolutionAbandonmentrarelyflowsfromasinglecause;instead,itcanbetriggeredby

economicandpopulationshifts,regionalmarketforces,personalfinancialproblems,

orqualityoflifedecisions.Existingobsoleteorineffectivelegalsystemsoften

exacerbatethesetriggersbymakingithardforproperties,onceabandoned,

toreturnproductivelytothemarket.

It’s the economyAsJamesCarvillefamouslysaid,“it’stheeconomy,

stupid.”Whileallofthefactorsleadingtoaban-

donmentarerelated,marketoreconomicforces

areusuallytheonesthatmostpowerfullydeter-

minetheoutcomesofvacantproperties,whether

theywillbereusedorabandoned,andperhaps

ultimatelydemolished.Abandonmentreflects

economicanddemographicshiftsinAmerican

society,includingdisinvestmentinoldercities,

migrationfromtheMidwesttotheSunbelt,lossof

manufacturingintheRustbelt,andinrecentyears,

theforeclosurecrisisandtherecessionthathave

ledtomillionsofAmericanslosingtheirhomes.

ManyofAmerica’soldercitieshavebeenlosing

bothpopulationandjobssincethe1950sand

1960s,astheirpopulationandbusinessactivity

movedtothesuburbsandtogrowingSunbelt

regions.Citiesthatweredependentonmanufac-

turing,likemostintheindustrialMidwest,were

particularlyhard-hit,astheirindustriescontracted

ordisappearedentirely.11Thesecitiesinclude

majoriconiccitiesofAmericanhistorylikeDetroit

andPittsburgh,aswellashundredsofsmaller

communities.Whileatfirst,thesuburbsofthese

citiesgrew—largelybyabsorbingpeopleandfirms

fromtheircentralcities—inrecentyears,many

suburbanareas,particularlytheinneror“firstring”

suburbs,alsolostjobsandpopulation.Between

1970and2000,CuyahogaCounty,whichcontains

Cleveland,lostnearly20percentofitspopulation.

Sevenofitssuburbancommunitieseachlost

morethan20percentoftheirpopulationduring

thisperiod.

Somecitiesthatlostpopulationandsawwide-

spreadabandonmentinthe1970sand1980s

begantogainbackpopulationinthelasttwo

decades.TwogoodexamplesareNewYorkCity

Putting the pieces together:

15

andBoston,bothofwhichhaveexperienced

dramaticeconomicturnarounds.Bothhadlarge

numbersofvacantpropertiesinthe1970sand

fewtoday.

Othercitiesandsuburbs,though,havecontinued

tosteadilylosepopulationandjobs.Theseplaces

haveavastoversupplyofhomes,apartments,

stores,andfactoriescomparedtotoday’sdemand.

Simplystated,therearenotenoughpeoplewho

wanttoliveinthesehomesandapartments,or

operatebusinessesinthesestoresandfactories

(orconvertthemtootheruses)touseupthe

supply.Thesecommunitieswillnotbeabletofind

usersformanyofthepropertiesthatwerebuilt,

whenthesecitiesweregrowingandthriving.

Aspropertyownersrealizethattheycan’tfind

buyersfortheirproperties,oriftheycan,thatthose

buyerscan’taffordtopayenoughtocovertheir

costs,theyabandontheirproperties.Asmostof

thesecitiescontinuetolosejobsandpopulation,

theywillhavetorecognizethattheyareunlikely

toreturntothedaysofthe1950s.Whilewell-

designedandconsistentlyenforcedlegalsystems

canhelpmaintainthepropertiesandminimizethe

harmtheydotothecommunity,aweakmarket

canonlybegintomaintainvalueswhenitstabi-

lizesatapopulationlevelthatcanbesupported

byitseconomicactivityandpopulationtrends.

Shrinkingcitiesinweakmarketregionswillhaveto

fundamentallyrethinkhowtheyusethelandand

buildingsbeforetheirrealestatemarketsarelikely

toreturntovitality.

Physicalobsolescenceiscloselyrelatedto

thegeographicfactorsofweakmarketdemand.

Manypropertiesthatmetdemandin1910,such

assmallrowhousesinPhiladelphiaormulti-story

factoriesinCleveland,arenolongerinteresting

eithertohomebuyersormanufacturers.

Thesepropertiesaredisproportionatelylocated

inAmerica’soldercities.Whiletheyaresometimes

convertedtootheruseswhenlocatedinastrong

marketcitylikeBoston,theylanguishelsewhere.

Joblossesalsoaffectcommunitiesduetoa

resident’sinabilitytomaintainahomeingood

condition,paytherentormortgage,andpay

thepropertytaxes.Althoughtherearesignsthat

economicgrowthisresumingnationally,the

increaseismodestandtheunemploymentrate

remainsatdangerouslyhighlevels.Whilethe

nationalunemploymentrateinthespringof2010

hoversclosetotenpercent,itisaround15percent

intheFlintandDetroitareas,18percentor

higherinmuchofCalifornia’sCentralValley,

and25percentinthecityofDetroit.

Ifsignificantprivate-sectorjobgrowthdoes

nottakeplacesoonandhighunemployment

continues,asexpertsfearitwill,communities

aroundthecountrywilldestabilizefurther.

Thedestabilizationofthehousingmarketthat

hastakenplace,andiscontinuing,islikelyto

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slowdowntheeconomicrecovery.AsFederal

ReserveChairBenBernankenotedinJune

2010,housingactivitycontinuestobe“weighed

down,inpart,byalargeinventoryofdistressed

orvacantexistinghouses.”12

The municipal fiscal crisisTheheadlinesinthisrecessionhavebeen

aboutjoblossandfactoryclosings,butanequally

significantcrisisistheerosionofthefiscalhealth

ofAmerica’sstatesandcities.Theburstingofthe

realestatebubbleandtherecessionhasledto

anunprecedented,simultaneousdropinallthree

oftheprincipalsourcesofpublicrevenue:

incometax,salestax,andpropertytaxreceipts.

Thislosshastriggeredmassivedeficitsfor

stateandlocalbudgetsacrossthecountry,

withdireconsequences.TheNationalLeague

ofCitiessurveyeditsmemberstofindthat“7in

10cityofficialsindicatedtheyareresponding

totheeconomiccrisisbymakingpersonnelcuts,

includinglayoffs,hiringfreezesandfurloughs.

Manycitiesarealsocuttingpublicsafetyspending

andhealthcarebenefits.”13Meanwhile,hard-

pressedstatesarecuttingbackontheassistance

theyonceprovidedtheirlocalgovernments.

Eventhoughtherecessionmaybeending,asthe

NLCreportnotes“citybudgetshortfallsare

predictedtobecomemoresevereastaxcollec-

tions,whichlagtheoveralleconomy,catchup

witheconomicconditions.”

Fromtheperspectiveofabandonedproperties,

thisfiscalcrisiscomesataparticularlydifficult

time.Asthenumberofabandonedproperties

grows,andmoreneighborhoodsaredestabilized

byforeclosuresandvacancies,citiesneedtobe

abletoaddresstheseissuesinordertorebuild

confidence,preservesoundneighborhoods,and

keeponce-vitalneighborhoodsfromcomplete

collapse.Instead,citiesarebeingforcedtolayoff

Cities are being forced to lay off building inspectors, firefighters and police officers, and cut back on critical activities such as property maintenance, nuisance abatement and demolition...these actions may allow these problems to get worse, compromising many communities’ future.

buildinginspectors,firefighters,andpolice

officers,andcutbackoncriticalactivitiessuch

aspropertymaintenance,nuisanceabatement,

anddemolition.Recognizingthatcitieshavelittle

choiceinthematter,thefactremainsthatthese

actionsmayallowtheseproblemstogetworse,

compromisingmanycommunities’future.

Inseveralcities,non-profitfoundationsand

organizationshavetriedtofillthegap,buttheir

resourcesarefartoolimitedtooffsetthemassive

lossinstateandlocalresourcesbeingfelt

aroundthecountry.

Foreclosures: compounding a complex situationTherecentwaveofmortgageforeclosuressince

2007hashadadevastatingeffectonmany

regionsacrossthecountry.Citiesandtownswith

formerlystronghousingmarketsandthosewith

long-termweakmarketsalikearestrugglingwith

thequestionsofhowtomaintainstableneigh-

borhoodsinthefaceofwidespreadvacantand

foreclosedhouses.Webelievethatmortgage

foreclosuresarethemainreasonthatvacancies

haveincreasedsoconsistentlyduringthepast

fiveyears.Whileforeclosuresdonotalwayslead

toabandonment,theycantriggeritinmany

differentways:

Manypropertyowners,whentheyreal-izetheywilllosetheirproperty,abandonit,simplywalkingawayevenbeforetheforeclosureactuallytakesplace.

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Whentheforeclosuresale(sheriff’ssaleortrusteesale)takesplace,iftheownerisstilllivingintheproperty,thelenderalmostalwaysimmediatelyevictstheowner,renderingthepropertyvacantandatriskofvandalismorarson.

Insomeweakmarketareas,thelendermaynoteventakecontroloftheproperty,aphenomenonsometimescalleda“bankwalkaway.”

Duringtheforeclosureprocess,iftheproperty

isabandoned,itgoesintoasortoflegallimbo:

theownerisnolongeraround,butinmostcases

thelenderhasnoresponsibilityfortheproperty

untiltheforeclosureisfinalandthedeedis

recorded.Inmoststates,thisprocesscantake

morethanayear;insomeittakesmorethantwo

years.Meanwhile,thepropertiesmaydeteriorate

andbecomeablightonthecommunity.

Onceapropertyistakenbythelender,itbecomes

whatisknownasREO(Real-Estate-Owned)

property.Itmaybeputupforsalethroughalocal

broker,oritmaybesoldbythelenderaspartof

abulksaletoaninvestor.Eitherway,theoutcome

isuncertain,andthereisnoassurancethatthe

propertywillbemaintained,orwillendupin

responsiblehands.

Theshort-termoutlookisnotpositive.Althoughthe

numberofREOpropertiesappearedtostabilize

during2009,manyexpertsbelievethatoverthe

comingyearortwothenumberofREOproperties

willincreasedramaticallyasamassive“shadow

inventory”ofpropertiesindefaultorforeclosure,

butnotyetforeclosedupon,movesthroughthe

processandintoREOstatus.

However,marketforcesimpactoutcomesand

foreclosuresdonotalwaysleadtoabandon-

ment.Manypropertiesareboughtandput

backtouse,eitherbyhomebuyersorinvestors,

particularlyincommunitieswherepeople

expectpropertyvaluestobeginrisingagainin

thenextcoupleofyears.

InrelativelystrongmarketareassuchasPhoenix

orLasVegasthemarketisabsorbingmuchofthe

REOinventory,principallythroughtheactivitiesof

absenteeinvestors.Thismaynotlast.Marketrents

aredroppingintheseareas,makingthemless

attractivetoinvestors,while—asaresultoftheinflux

ofrentalsingle-familyhomesontothemarket—

multifamilyvacancieshaveincreasedtothepoint

wheremanygardenapartmentcomplexesmaybe

atriskofabandonment.Asimilarproblemafflicts

SouthFlorida,wherethecollapseofcondominium

associationsasaresultofthelargenumberoffore-

closedunitshasraisedquestionsaboutthesurvival

ofentirecomplexes.Afurtherriskfactorinthese

areasisthepresenceofthousandsof“underwater”

homeowners,whoowemoreontheirmortgage

thantheirhomesareworth.Iflargenumbersof

theseownersengagein“strategicdefault,”that

couldfurtherdestabilizethemarketintheseareas.

Althoughforeclosuresareoccurringeverywhere,

recoverywilltakedifferentforms.Inmanyweak

marketcitiesandregions,foreclosureshave

compoundedlong-termabandonmentproblems,

oftenundoingyearsofprogressmadebycities

andCDCsinturningaroundonce-disinvested

neighborhoodsandrestoringabandoned

propertiestouse.Thesecitiesareconfronting

theneedforasustained,long-termeffortto

rebuildtheshatteredconfidenceofhomebuyers

andinvestorsinthevalueoftheirpropertiesand

thestabilityoftheirneighborhoods,withoutwhich

neighborhoodsdestabilizedbyforeclosuremay

neverrecovertheirvitality.Eveninstrongmarket

areas,manydestabilizedurbanneighborhoods

willtakeyearstorecoverfromtheravagesof

theforeclosurecrisis.

Laws and public policies make a difference Haltingandreversingthecycleofabandonment

requiresthoughtful,deliberateinterventionbased

onaclearunderstandingoftheuniquecombina-

tionoffactorsaffectingvacantandproblem

properties,andthetoolsavailabletodealwiththem.

Someoftheinterventionsundertakenrecentlyto

tackletheproblemaredescribedlaterinthis

report.Whetherdealingwithrecentlyforeclosed

propertiesorlong-abandonedindustrialparcels,

manyoftheseinterventionshavereliedon

transactionaleffortsthathaveshownsome

levelofsuccess.Buttoaddressthescaleofthe

challengewefacetoday,weneedtolookmore

closelyatthepoliticalandlegalsystemsthat

governpropertyandlandreuse.

Manydifferentlegalsystems,primarilydefinedby

statelawandlocalordinances,determinehow

propertyistreated,fromzoningandbuildingcodes

toforeclosureprocedures.Manyofthoselaws

actuallycontributetotheepidemicofabandonment,

astheyneitherpreventforeclosuresorabandon-

mentnorfostertheefficientreturnofpropertytothe

marketortoaresponsibleholdingentity.

Governmentpoliciesandpracticescanalsoexacer-

batethechallengesposedbyhighratesofaban-

donment.Localgovernmentsthatselltaxliensand

tax-foreclosedpropertiestospeculatorsratherthan

holdingthemforfutureusearemortgagingtheir

futureforshort-termgain.Theproblemisalso

To address the scale of the challenge we face today, we need to look more closely at the political and legal systems that govern property and land reuse.

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compoundedbyadiffusionofresponsibility.

Inmanylocalgovernments,responsibilityforthe

decisionsandactionsthataffectproperties—from

codeenforcement,policing,anddemolitionto

planning,acquisition,taxcollection,disposition,

andprojectfinancing—isspreadacrossmultiple

agenciesthatrarelycoordinatetheirefforts,and

oftendon’teventalktooneanother.Commentator

MarkAlanHugheswrotethat“theresponsibilityfor

vacantpropertyinPhiladelphiaisdividedamong

15separateagencies.”14Tenyearslater,thecity

isonlynowmobilizingtodevelopacoordinated

vacantpropertystrategy.

Zoningandbuildingcodescanmakethereuseof

abandonedpropertiesburdensome.Antiquated

zoningcodesrequiretime-consumingandexpen-

siveprocessesforevenminorchangesinuse,while

strictbuildingcodesdiscourageself-helpimprove-

mentandsweatequity.Stateandlocallanduse

regulationsgenerallyfavorbuildingongreenfield

sites,buildingnewpublicly-financedinfrastructureat

themetropolitanperipheryandexacerbatingthe

costsofvacancyinthecenter.

Statetaxforeclosurelawsarealsoproblematic.

Designedtomaximizeshort-termrevenuestothe

cityorcounty,theyoftendisregardthecommu-

nity’slong-termfiscalorsocialhealth.Ratherthan

beingameansofrescuingpropertiesfrom

abandonment,theselawsoftencompoundthe

problem,addingtotheinventoryofabandoned,

dilapidatedproperties.

Federalprogramsandpolicieshavealsocontrib-

utedtotheproblem,fromthedayswhenurban

renewalunderminedmanystill-vitalcommunities,

andinterstatehighwayshelpedacceleratethe

movementtothesuburbs,totoday.Otherfederal

programs,liketheLowIncomeHousingTaxCredit

program,continuetoencouragedevelopmentof

newhousingunitsinneighborhoodswitha

surplusofaffordablerentalhousing,increasing

theriskofabandonmentforthousandsofprivately

ownedrentalproperties.

Shifting perceptions about vacant properties create the opportunity to turn

scattered, piecemeal approaches

into a comprehensive strategy.

ProgressAsofmid-2010,thegrowingnumberofvacantandabandonedpropertiespresents

adauntingchallengetothenation,andpowerfuldynamicsintheeconomy

threatentomakethesituationworseinthecomingyears.Yet,thereiscauseforhope.

Forthefirsttimeinmanyyears,thefederalgovernmenthasbeguntolookseriously

attheseissues,whiletheforeclosurecrisishasunleashedawaveofcreativityatthe

stateandlocallevels.Statelegislatureshaveenactedvaluablepolicyreforms,while

citygovernments,CDCs,foundations,andothershavealltakenupthechallenge.

Whilethecomingyearswillbedifficult,theywillalsobeyearsofopportunity.

Successfuleffortsacrossthecountryshowwhat

communitiescandotopreventabandonmentand

restorevacantpropertiestoproductiveuse.After

yearsofeffort,wearelearninghowbesttorespond

tothechallengesposedbyvacantandabandoned

propertiesatthelocallevel.Thetimecallsforthese

effortstotakeonalarger,moreambitiousscale,

andshiftingperceptionsaboutvacantproperties

createtheopportunitytoturnscattered,piecemeal

approachesintoacomprehensivestrategythat

linksfederal,state,andlocallawsandpractices

withprivateandnon-profitinitiatives.

Inthissectionwewillbrieflysketchsomeofthe

successfuleffortsthathavelaidthegroundwork

forthiscomprehensivestrategy,aswellasthe

reasonswebelievethatthisisatimeofhope,

ratherthandespair.

Signs of progressStatelegislatureshavetakenimportantstepsto

changethelawssurroundingpropertyacquisition

anddisposition:

In2003,Michiganenactedpioneeringlegislationauthorizingcountiestocreatelandbankauthoritiesandgivingthoseauthoritiesstrongtoolstoacquire,maintain,andtransferownershipoftaxforeclosed,vacantproperties.Today,followingtheleadofGeneseeCounty,thereareover30countylandbanksin

and Challenges

23

Minneapolis

In the early 2000s, the neigh-

borhood surrounding Frank-

lin Avenue in Minneapolis

was one of the most blighted

and crime-ridden areas of

the city. The area was better

known for nuisance busi-

nesses or illegal activities—

such as adult bookstores,

open drug dealing, and pros-

titution—rather than meeting

basic residential needs, like

a shop for groceries or medi-

cine. Efforts to redevelop the

community were met with

skepticism, the prevailing

wisdom being that no legiti-

mate businesses would take

a chance on the troubled

neighborhood.

AlocalCDC,theAmericanIndianNeighborhoodDevelopmentCorporation(AINDC),sawopportu-nitywhereotherssawnone.WhenAINDCExecutiveDirector,TheresaCarr,discoveredthatalocalstorewasafrontforprostitution,she“realizedthat,insomerespects,realestateownershavemuchmorepowerovercrimethanthepolicedo.”

Fromthenon,theAINDCsettowork,prioritizingsafetyandcrimereductionaskeyelementstoitsredevelopmenteffort.

TheAINDCstartedbyforgingapartnershipwiththepolicedepart-mentandemphasizingthesafetythatwouldcomewithbricksandmortardevelopment.Buildingontheideathatbusystreetsaresaferstreets,theAINDCsoughtbusi-nessesthatwouldstayopenpast5p.m.WhentheFranklinStreetBakery,aneighborhood,24-hourindustrialbakery,wassearchingforanewlocation,includinginsafersuburbanneighborhoods,theAINDCpersuadedtheownersthatthejobsitcouldbringtothecommunitywhereitsemployeeslivedwouldhaveasignificantandpositiveimpactontheneighbor-hood.Thebakerythentookoveranabandonedgasstation—acrimehotspotthataccountedformorethan500policecallsinasingleyear—andtwoneighboringproper-ties.Tofurthermaketheareapedestrianfriendly,theAINDCdidawaywiththelong,darkcorridorsthatcharacterizedthearea’stroubledshoppingcenterandreplacedthemwithaspacious,welllightedplazawithafountain,publicartandambientmusic.

TheAINDC’sstrategyhadenor-mouspayoffs.ThecombinedeffectsofthebakerytakingachanceonexpandingonFranklinAvenueandtheAINDC’sfocusondesigningforsafetycatalyzedtheresurgenceofthecommercialdistrictthatnowboastsahealthclinic,florist,grocerystore,drugstore,policesafetycenter,andpopularcoffeeshop.Theinvestmentsmadebythesenewbusinessesledtoincreasedfoottrafficandlowerlevelsofcrime,andthedecreaseincrimehasresultedinaboontoeconomicandcivicactivityinthisoncetroubledneighborhood.

Progress in Minneapolis, MN

Promoting economic Development through Crime Prevention

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Michigan,aswellasastatewidelandbankandamunicipallandbankinDetroit.

OtherstatesarefollowingMichigan’sleadinintroducinglandbanklegislation.Ohiofollowedsuitin2009,authorizingtheestablishmentofalandbankauthorityinCuyahogaCounty,thelargestcityofwhichisCleveland.Thatbody,theCuyahogaCountyLandReutilizationCorporationhastakentheleadroleinthecounty’ssuccessfulNSP2applicationandin2010,thestateexpandeditslegislation,authorizingcountieswithmorethan60,000residentstocreatelandbanks.LandbanklegislationhasalsobeenrecentlyintroducedinNewYorkandPennsylvania.

In2009,Texasenactedanewlawallowingcommunitygroupstofilereceivershipactionsagainstdangerouspropertiesandtotransformthepropertiesintodecent,safe,andaffordablehousing.Thelawalsohelpscommunitiesandcitiesobtaincleartitletotheproperties.Similarly,in2009,Pennsylvaniaenactedastateconservatorshiplaw,givinglocalgovern-mentsandnon-profitsapowerfultooltogaincontrolofneglected,abandonedproperties.NewJerseyandOhioalsohavestrongvacantpropertyreceivershiplaws,whilearecentMassachusettscourtdecisionhasallowedthatstate’sreceivershiplawtobeusedforvacantaswellasoccupiedproperties.

• In2009,NewJerseypassedinnovativestatelegislationtoholdlenderswhoinitiateforeclosureactionslegallyresponsibleformaintainingthepropertiesfromthebeginningoftheforeclosureprocessiftheyareabandonedbytheirowners.

AnewparadigmforrevitalizingAmerica’solder

industrialcitieshastakenhold.SinceYoungstown,

OhiofirstbroketheicewithitsYoungstown2010

plan,moreandmorecitieshavebeguntoplan

theirfuturearoundtheideathatasmallercitycan

beastronger,healthier,andgreenercity:

Rochester,NewYorkhasannouncedProjectGreen,“aboldplanthatwouldchangethelookandfeelofRochesterbyreplacingvacantpropertieswithvastswathsofgreenspace.”

UndertherubricofRe-ImaginingaMoreSustainableCleveland,apartnershipofgovernment,foundations,universities,andnon-profitorganizationshascometogethertofosternewwaysofusingCleveland’svacantland,whileknittingtogetherthefabricofitsviableneighborhoods.

ThecityofDetroit,undertheleadershipofitsenergeticnewmayorDaveBing,hasformedapartnershipwithlocalfoundationsandotherstodevelopanewstrategyforthatcity,integratinglanduse,economicdevelopment,transportation,andschools,basedonthesmaller-cityparadigm.

Newinformationtechnologiesarealsohelping

localactorsaddresstheirpropertyissuesmore

effectively:

NEOCANDO,apropertyinformationsystemforNortheasternOhiobasedatCaseWesternReserveUniversity,hasenabledorganizations

This is a time of hope, rather than despair.

Cleveland

Although the steady loss

of population in Cleveland

is one contributing factor

to the substantial level of

vacant properties in the city,

the foreclosure crisis, which

started earlier here than in

many other communities,

threatens to abrogate

decades of success and

investment in the city’s

hardest hit neighborhoods.

ThelevelofabandonmentfoundinClevelandtodayisunprecedented,eventomanycommunitydevelop-mentveterans.However,commu-nitydevelopersinClevelandhavealonghistoryofdevisinginnovativeresponsestodifficultchallengesandtheyareworkingwithstakeholdersinthecitytoformulateacoordinatedresponsethateffectivelytargetsandleveragesavailableresources.

Toovercometheobstaclestostabilization(troubleacquiringREOandpost-REOproperties,presenceofmultipleblightedpropertieswithinaneighborhood,andworrythatnearbyoccupiedhomesmaybecomevacant),anumberofstakeholderscreateda“neighbor-

hoodstabilizationteam”—localintermediary,NeighborhoodProgressInc.,CaseWesternReserveUniversity,14CDCs,andEmpoweringandStrengtheningOhio’sPeople(ESOP,alocalforeclosurepreventionagen-cy)—toregularlymeetandsolicitinputfromCDCsworkingdirectlyinthefield.Theeffortisacomprehensiveapproachaimedatbothendsofthestabilizationchallenge—preventingabandonmentthroughstrategiessuchasforeclosurepreventionandconvertingabandonedpropertiesforproductiveuse.Theteamaggres-sivelyemploysallavailablefederal,state,andlocalresources.Thiscustomizedapproachsurpassesthescopeofmuchoftheworkconsid-eredneighborhoodstabilizationtoday,applyingstrategiesandactivitiesthatmaynotbeeligibleforfundingthroughthefederalNeighbor-hoodStabilizationProgram.Thesecriticalyetineligibleactivitiesincludeacquiringprivatelyownedproperty,commencingnuisanceabatementandreceivershipproceedings,andaggressivelyenforcinghousingandbuildingcodes.

TheteamholdsmonthlymeetingswithCDCsinorderto:

Identify,map,andresearchpoten-tialacquisition/renovationtargets

Identifyandmapblightedpropertiesthatthreatentoundermineexistingassetsandrenovationprojects.

Identifyandmapoccupiedhomesatriskofforeclosureandabandonment.

Prioritizeandcategorizedestabilizingproperties.

Linkpropertieswithanappropriateintervention.

Organizethestabilizationwork–assigningtasksandreportingback.

TrackoutcomesthroughNEOCANDO.15

Duringtheteammeetings,eachCDCmapsandjuxtaposesitsassetswithNEOCANDOdataaboutpar-ticularneighborhoods’destabilizingfactorsincludingat-riskmortgages,foreclosures,upcomingforeclo-suresales,bankorinvestor-ownedproperty,delinquenttaxes,andvacancies.CaseWesternUniversityupdatestheNEOCANDOdatausedbytheteamregularly,sotheteamcanspendtimemakingstrategicinterventiondecisionsratherthancollectinginformation.Theteammeetswithindividualneighborhoodgroupstoidentifydestabilizingforcesthatmayharmcommunityassetsandtotargetlimitedresourcesnearneighborhoodanchors.

Progress in Cleveland, OH

Building a neighborhood Stabilization Team effort

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inClevelandandelsewheretotargettheirforeclosurepreventionandneighborhoodstabilizationefforts.

DrivenbytheneedsofChicago’sNeighbor-hoodStabilizationProgram,MercyPortfolioServicesdevelopedCommunityCentral,asystemtomanagetheprogram.CommunityCentralisapowerfulweb-basedtoolthatMercyusestorunareuseprograminvolvingthousandsofvacantandforeclosedproperties.Mercyislicensingthesystemtoothercitiesandnon-profitorganizations.

PolicyMap,developedbyTheReinvestmentFund,providesawiderangeofdataandmapsatthecensustractlevelthroughauser-friendlyinterfacetosupportlocalplanningandresearchefforts.

Anumberofotherlocalinitiativeshaveemergedto

strengthennuisanceabatementandcodeenforce-

mentoutcomes,andleveragemunicipalservices

andprivateresourcestosupportredevelopment:

TheCityofChulaVista,Californiaenactedalocalordinancerequiringlenderstotakecareofvacantpropertiesduringforeclosure.16Thecity’sordinancehasbecomeamodelforasmanyas100otherlocalitiesaroundthecountry,mostlyinCaliforniabutalsoinotherstatessuchasFloridaandConnecticut.

TheCityofClevelandhasinitiatedaninnovativeprogramthatmakesthecity’scommunitydevelopmentcorporationsitscodeenforcementpartnerstoleveragelimitedmunicipalresources.

WorkingwiththeNST,theSlavicVillageDevelopmentCDCleveragedinvest-mentinoneoftheirnewprojects—a90-unitsinglefamilyhousingcomplexlocatedonanabandonedindustrialsite—torevitalizethesurroundingarea,whichwasalsoadjacenttoaregionalbank’snewheadquarters.SlavicVillagehadidentifiedthethree-blockareawitha40percentvacancyrateinordertomutuallystrengthenthesenewanchorsandthoseblightedblocks.WiththehelpoftheNST,SlavicVillagebeganaproperty-by-propertyanalysisanddevelopedstrategiesforeach.TheCDCacquired27ofthevacantpropertiesandrehabbedthehomes(offeringsomeforsaleandsomeforlease),demolishednearly40properties,landscapedvacantlots,filedreceiver-shipsuitstoeliminatenuisancesandofferedhomerepairloansandlightpoststotheexistingresidents.

Lessthanthreeyearslater,therehabbedpropertiesarealmostcom-pletelyoccupied;greenspacesflourishwhereoncetherewerevacantandabandonedlots;thedirtyindustrialsiteisgone;anoldraillinewasreplacedwithabiketrail,andacommunitygardengreetsvisitorsandresidentsalikeontheneighborhood’smainavenue.Theseeffortsstabilizedthemarketinanareathatwasonceseverelydistressedandareahallmarkoftheresultspossiblebyworkingtogether.

Flint

Policymakers and prac-

titioners examining the

successes of the Genesee

County Land Bank often

focus on the fiscal impact

of its programs and large-

scale initiatives.

Thedemolitionandcleanandgreenprograms,forexample,haverecentlyshownthattogether,a$3.5millioninvestmentreturnsanimpressiveincrease—over$109million—onsurroundingpropertyvalues.AnothervictorycomesfromtheLandBankCenter’srehabonSaginawStreet,a$4.1millionmixed-useinvestmentthatlaunchedrevitalizationoftheblocksadjacenttotheUniversityofMichigan’scampus:followingthesubstantialrehabofthelandbankbuilding,sevenvacantbuildingswererehabbedprovidingapproxi-mately150newresidentialunitsand60,000squarefeetofleasablecommercialspace;approximately$60millionwasinvestedintheblocksimmediatelyaroundtheLandBankCenter;inSeptemberthelong-vacantDuranthotelwillopenasnewstudenthousing.

Butlessknown,andequallyimpor-tant,areindividualtransformative

outcomesoftheGeneseeCountyLandBankefforts.Thestoryoflife-longFlintresident,RogerMimms,highlightstheimportanceoftheseimpacts.

Mr.MimmsremembershowtheFlintcommunityhelivedinforover20yearschangedashisneighborsmovedorpassedaway.Asabsenteeownersandothernegativeinflu-encestookoverandreplacedhisfriends,hecouldn’tsleepwellinhisrentedhomeandfeltlikeheneededaweaponnearbyforsafety.Likehomesinsimilarneighborhoodsacrossthecountry,theownerofthehouseabdicatedresponsibilityforitsupkeepandMr.Mimmscontendedwithhealthandsafetynuisancesincludingmiceandroaches.

Whentheownerignoredanothercriticalresponsibilityofpropertyownershipandfailedtopayproper-tytaxesin2003,Mr.Mimms’shousewentthroughthetaxforeclosureprocessinitiatedbytheGeneseeCountyTreasurer,andbecamepartoftheinventoryownedbytheGeneseeCountyLandBank.That’swhenMr.Mimms’slifechanged.

Mostoften,thepropertiestransfer-ringtotheGCLBarevacantlotsoremptybuildings.Butapproximately

14percentofthebuildingsthatactuallygothroughforeclosureareoccupied,andthelandbankstafffirstinspectsthepropertytoensureitmeetscodeandthendetermineswhathappensnext,includingdeter-miningiftheoccupantcouldenterarent-to-owncontractorifitcanbealandbankrental.Thelandbankoperatesarentalmanagementprogramofabout100propertiesthroughoutthecity.

BecauseMr.Mimms’shomewasuninhabitableandinaneighbor-hoodthatwasbecomingaban-doned,thelandbankpropertymanageraskedifhewouldcon-sidermovingintoanotherlandbankproperty.AlthoughMr.Mimms’sneighborhoodandhousewereunsafe,itwasthehomeheknewandinitiallyhewantedtostaywherehewas;butheagreedtolook.Uponenteringoneofthehouses,Mr.Mimmsdescribedhavinga“spiritualmoment”andwasover-comewiththefeelingthathe’dbeentherebefore.AshorttimelaterMr.Mimmsrelocatedtothatlandbankproperty.It’sbeensevenyearssincethelandbankforeclosedonthelandlordofhisoldhouse,andMr.Mimmsreportsbeing“ashappyashappycanbe.I’mhome.ThisiswhereIneedtobe.”

Progress in Flint, MI

Individual Transformations through Land Bank efforts

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Baltimore’sHealthyNeighborhoodsInitiativefocusesonstrengtheningthecity’sviablebutatrisk“middlemarket”neighborhoodsthroughavarietyofconfidence-buildingstrategies.AlsoinBaltimore,thecity’sCodeEnforcementDivisionispartneringwithprivatedeveloperstostabilizeareasaroundrehabilitatedhomes.

TheGreenImpactZoneinKansasCityisconcentratingfederal,state,andlocalresourcestotransforma150-blockarea,focusingonhousingrehabilitation,weatheriza-tion,communitypolicing,andjobtraining.

ThecityofIndianapolishasdesignatedtheSmartGrowthRedevelopmentDistrict,acomprehensivecommunityandeconomicdevelopmentplanninginitiative,tocoordinatebrownfieldcleanupactivities,createnewhousingandtransitopportunities,andrevitalizea540-acreblightedareaofthecity.

SanDiegoemploysavacantpropertycoordinatortoworkwithpropertyownerstoaddressnuisanceactivitiesandproblempropertiesinthecity.

InMinnesota,theFamilyHousingFundtooktheleadtobringadiversegroupofpublicandprivateentitiestogetherintheMinnesotaForeclosurePartnersCouncil.Since2007,theCouncilhasfosteredacoordinatedapproachtotheforeclosurecrisis,linkingforeclosureprevention,neighborhoodstabilization,andpolicyreform.

BytargetingitsfederalNeighborhoodStabiliza-tionProgramresourcescarefully,throughprogramsthatrehabilitatevacanthousingand

fosterhomeownership,MinneapolishasreversedthedeclineandsignificantlystabilizedtheNorthsideneighborhood,thecity’smostseverelydistressedarea.

CommunityorganizationsinDetroit,spear-headedbyCommunityLegalResources,createdtheDetroitVacantPropertyCampaign,whichhasgalvanizedthecity’spoliciesandpracticeswithrespecttovacantandabandonedproperties.

Partnershipsthatbringtogetherthecentralcity,

inner-ringsuburbs,andcountiesinasharedeffort

wereonceexceedinglyrare.Nowtheyare

becomingmorecommon.Citiesandsuburbsare

startingtorealizethattheyareinthistogether,

andwillhavetoworktogetheriftheyaretoreverse

thetideofdeteriorationandabandonmentthat

threatensallofthem.

Are new ways of thinking emerging? Theincreaseinthenumberandscaleofeffective

andcreativestateandlocalinitiativesisnota

fluke.Webelieveitisasignofarealchangein

howpeoplearebeginningtothinkaboutvacant

propertyandlanduseissues.

A fresh look at the nation’s older industrial citiesOnlyafewyearsago,tosuggestthatcitieslike

ClevelandorDetroitshouldrethinktraditional

growthmodelsandconcentrateonbecoming

smallerbutstrongercitieswouldhavebeen

Balti more

Vigorously enforcing housing

and building codes is a criti-

cal component of any local

government effort to main-

tain the health of transitional

neighborhoods. In those

with concentrated blocks of

vacancy and abandonment

however, getting real out-

comes through code enforce-

ment can be a challenge.

But even in those areas, a

well-thought out combination

of remedies can help encour-

age responsible ownership,

keep properties from becom-

ing nuisances, and facilitate

the transfer of properties

from investors who will not

rehabilitate them to others

who will. However, like many

municipal agencies, code

enforcement departments

are often short-staffed and

under-resourced, and direc-

tors must determine the most

strategic deployment of

their resources.

Overtheyears,Baltimorehasdevelopedasophisticatedarrayofsystemsandremediestoremediateitsvacantandabandonedproper-ties,includinganewinitiativetotransformpropertiesFromVacants to Value.Althoughtheprivatedevelopmentsectorisnotalwaysviewedasanallyintheefforttocombatblight,theinitiativeseekstoincentivizeresponsible,privatedevelopmentbydeployingthecity’scodeenforcementtoolsfortheben-efitofdeveloperswhocommittheirowncapitaltorevitalizesignificantlyabandonedneighborhoods.

Onblightedblocks,codeenforce-mentattorneysworkwithcapital-izedprivatedeveloperstominimizeinvestmentriskbytailoringaremedyforeachvacantproperty.Remediesinclude:engagingincriminalandcivilprosecutions;issuingpre-payablecivilcitationsinsignificantdollaramounts;act-ingasareceiverforapropertyforsale;demolishingandstabilizingasnecessary;andbringingeffec-tivenuisanceabatementactionstodeterandpunishproperty-basedcriminalactivity.Together,develop-ersandthecityidentifyblocksthatarelikelygoodcandidatesforwholeblockrenovationanddetermine

howmultiplesiteswillconnecttoform“islandsofdevelopment.”Baltimore’sHousingCodeEnforce-mentDivisionalsopartnerswithhigh-capacity,nonprofitorganiza-tionstobolsterthenumberoftoolsavailablethroughtheFrom Vacants to Valueprogram.

Carriedbythestrengthofthesepartnerships,thecitydevelopedimpressivegoalsforthefirstyearoftheinitiative:rehab1,000privately-ownedvacantbuildingsinsomeofthecity’smostdistressedneighbor-hoods,leverageprivateinvestmentinhousingstock,createaffordablehousingopportunitiesforresidentsatvariousincomelevels,increasethepropertyandincometaxbase,andcreatecommunitystewardedgreenspace.

Intransitionalareas,wherevacantbuildingsarenotconcentratedbutmaybelimitedtoonlyafewperblock,From Vacants to Valueusesautomatedbusinesssystemstogenerate$900citationstotheownersofvacantpropertiesthatareotherwisecapableofeithersellingorrehabilitatingthem.Inthisway,attorneyresourcescanbeshiftedtoareasofconcentratedvacancywheretheirskillsandcodeenforce-

Progress in Baltimore, MD

Leveraging Public and Private Sectors

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unthinkable.17Timeshavechanged.Manycities

nowrecognizethattheywillnotreturntotheir

one-timepeakpopulations,nortotheirhistory

asmanufacturingcenters.Thisadmission

hasfundamentallychangedhowtheythinkabout

themselvesandtheirfuture;ithasunleashed,

aswesuggestedabove,ahostofcreative

initiativesthatchallengetraditionalideasofcity

planning,andopenthedoortoanewwayof

thinkingaboutthesecities.Becauseofthe

demographicsofthesecities,andthewaysin

whichpopulationandjoblosshasdisproportion-

allyaffectedminorityandlow-incomecommuni-

ties,theissuealsoraisescriticalquestions

aboutsocialandracialequity.

Different approaches to environmental and land use issuesAnewawarenessofenvironmentalissues

triggeredbyclimatechangeischangingtheway

wethinkaboutlanduseanditsrelationshiptothe

environment.Stateclimateactionplanshave

beguntolookatwaysinfilldevelopmentcan

promotehigherdensitiesandreduceautomobile

travel,whilethereisagrowingfocusonpreserving

farmlandandopenspacebydirectingdevelop-

menttoexistingcommunities.Thenewly-released

LEEDforNeighborhoodDevelopment(LEED-ND)

ratingsystemrecognizestheenvironmental

benefitsoflocatingprojectsonpreviouslydevel-

opedorformerlycontaminatedland,while

recentlyintroducedfederallegislationwould

menttoolkitaremostrequired.Firstyeargoalsinthesetransitionalareasincludetherehabilitationofanother1,000vacantbuildings

InAugust2008,Baltimore’sHousingCodeEnforcementDivisionbeganworkingwiththeWestportCommunityAssociationandaprivatedeveloperinthe2000-2400blocksofAnnapolisRoad.Afteraninitialsurveyidentified36vacantstructuresalongthefour-blockarea,theprogramsetaboutusingresourcestoleveragetherevitalization.Thecityinitiatedcodeenforcementlitigationresultingintwenty-fiveofthosevacantpropertiesbeingplacedundercourtorder;threeofthepropertieshavebeensoldtonewownersandtwoofthoseownershavealreadyreceivedoccupancypermits.Thecitydemolishedonevacantstructurethatpresentedanimmediatehazardandtheremainingownershaveinitiatedrehabilitationworkwithoutbeingplacedundercourtorder.Overthenextsixmonths,80percentofthetargetareaisexpectedtoberevitalizedfromasourceofblighttoasourceofvalueforthesurroundingneighborhoodandthecity.

New Jersey

In January 2010, the State of

New Jersey passed legisla-

tion known to advocates as

the Creditor Responsibility

Law, a valuable tool to

combat the challenges faced

by communities reeling

from a glut of foreclosures.

Citiesthroughoutthecountryhavesufferedthedeteriorationthatoccursinneighborhoodswhilelengthyforeclosureproceedingswindtheirwaythroughthecourts.Whilethelegalprocesshasitsowninherentdelays,lendersaresometimesguiltyusingtacticstostallproceedings,oftenwithoutrecourse,becausetheyhavelittleincentivetotakepossessionofva-cantorabandonedproperties.Thisnewlawgiveslocalgovernmentsauthoritytorequiretheforeclosingentitytotakeresponsibilityforthepropertyfromthedaytheentityiniti-atestheforeclosureprocess,evenbeforeittakestitletotheproperty.Thelendermustnotifythemunici-palitythatithasinitiatedforeclosureproceedings,andprovidecontactinformationforwhoeverisrespon-sibleformaintainingtheproperty.

Ifthepropertysubsequentlybecomesvacant,andthelenderfailstocorrectacodeviolationorabateanuisance,andthemu-nicipalityspendsitsownfunds,themunicipalitymayplacealienontheproperty.Thelawalsogivesthemunicipalityauthoritytogoafteranyotherassetofthecreditortoobtainrepayment,imposingonthelenderthesameobligationthatatitleholderowestoitscreditor.

Asmunicipalitiesbecomemorefamiliarwiththelaw,stakehold-erswillbeencouragingthemtoincorporateitintoamoreholisticneighborhoodpreservationsys-tem.Althoughit’stoosoontopointtoresultsyet,itlookslikethelawisencouragingsomemunicipalitiestodeveloppartnershipswithCDCsandcivicorganizations—crimewatchgroups,blockclubs,etc.—tohelpmonitorwhenpropertiesbecomevacantand,therefore,thelender’sresponsibilitytomaintain.Thelawalsoencouragesmunicipalitiestocreaterealprop-ertyinformationsystemsthatallowthemtoaccuratelytrackforeclo-suresastheybecomevacant.Bymappingforeclosurenotices,citiescanrecognizeclustersof

propertiesandneighborhoodsatriskofabandonment,andworkwithneighborhood-basedorgani-zationstomonitororgaincontroloftheproperties.

Thislawislikelytobereplicatedinstatesconfrontingthechallengeofvacant,foreclosed,andunmain-tainedpropertiesintheircommuni-tiesthatcontributetoblightandlowerpropertyvalues.InNewJersey,communitydevelopmentadvocatesareencouragingmunici-palitiestoincorporateuseofthelawintoacomprehensivelocalstrategythatusesotherstatelaws,includingthenuisanceabatementlaws,andtheAbandonedPropertyRehabilitationAct(whichautho-rizescitiestoacceleratetaxforeclosure,pursuevacantprop-ertyreceivership,andusespotblighteminentdomain)aspartofanaggressiveefforttostaveofftheeffectsoftheforeclosurecrisis.

Progress in New Jersey

Leading the way in State Policy

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provideincentivesforsitingnewrenewable

energyfacilitiesonbrownfieldsites.

Stormwatermanagementoffersagoodexample

ofnewthinking.Manyoldercitiesareunderorders

fromtheEPAtoreplacetheircombinedstorm

andsanitarysewagesystems,whoserecurrent

overflowproblemspollutestreamsandwaterways.

Ratherthanspendbillionsofdollarsbuilding

massivenewseparatesewersystems,citieslike

PhiladelphiaareworkingwiththeEPAtousetheir

vacantlandtofilterwaterrunoff,whilecreating

neighborhoodamenitiessuchasparksandrain

gardensintheprocess.

Theeraofthe“driveuntilyouqualify”philosophy

ofhousing,inwhichpeoplemovedfarther

andfartherawayfromthecitycenterinsearch

ofhomestheycouldafford,maybeending.

Greaterhousingaffordabilityisoftenoffsetby

highertransportationcostsin“location-inefficient”

areas18whilehouseholdslivingininfillandtransit-

accessiblelocationshavemuchlowertransporta-

tioncosts.Withagrowingnationalawarenessofthe

benefitsoftransit-orienteddevelopmentandrising

marketdemandfortransit-proximatehousing,

vacantpropertieslocatedalongtransportation

corridorsareincreasinglybeingseenasopportuni-

tiesbylocalities,states,andthefederalgovern-

ment.RecentEPAstudiesshowadramatic

increaseintheshareofnewconstructiontaking

placeincentralcitiesandoldersuburbsinseveral

regions,particularlyinthepastfiveyears.19

A new federal policy climateFinally,oneofthemostpromisingopportunities

forafuturecomprehensiveandstrategicvacant

propertypolicyagendaliesintherecentchanges

infederalthinking.

Inthesummerof2008,Congressenactedthe

NeighborhoodStabilizationProgram(NSP)20

tohelpcommunitiesaddresstheeffectsof

foreclosedandabandonedpropertiesintheir

neighborhoods.Practitionersacrossthecountry

appreciatedthenewfederalfunding,and

welcomedthefederalgovernment’srecognition

ofthedamagecausedbythegrowinginventory

ofvacant,foreclosedproperties.Despitehigh

expectations,theresultsoftheinitialNSPprogram

San Diego

By helping unlock the

unique story of problem

properties and under-

standing how a structure

becomes vacant, the City

of San Diego Code Enforce-

ment Department is able to

more efficiently dispatch

effective tools and direct

resources to help property

owners comply with codes

and relieve the neighbor-

hood of nuisances affecting

residents’ quality of life.

Whetheravacantstructurecanberevived,andhowquickly,dependsonavailableresources,thecom-prehensivenessoftheresponse,andthestrengthofexistingordi-nances.WhiletherearenumerousbuildingblockstotheapproachusedinSanDiego,includinganef-fectivevacantpropertyordinance,acodeenforcementprosecutor,strongpartnerships,andanarrayofenforcementstrategies,auniqueelementistheuseofaVacantPropertyCoordinator.

Althoughacoordinator’sworkmaybemoremanageableinasmaller

city,aliaisonbetweenthecityandthepublicthathelpsfindremediesforproblempropertiesisavalu-ableresourceinanycommunity.TheVacantPropertyCoordinatorinSanDiegoistaskedwithcreatinganinventoryandprofileofvacantproperties,andwithbeingthefirstrespondertoacomplaintofanunsecuredbuilding.TheCoordina-tormakessureboththecityandtheownerfollowthroughwiththeirresponsibilities;thecitymayneedtostabilizeanycrimeandnuisanceactivity,andeachownerisrequiredbySanDiegoMunicipalCodetodevelopaplanformaintenanceandrehab.

Agoodcoordinatoristrainedinbuildingcodeandlanddevelop-mentregulationsandhasasolidworkingknowledgeofavailableeconomicdevelopmentprograms,agencies,andgrantsinthecom-munity.Ifthepropertyneedstobeusheredthroughprobateortheownerneedsaloantorehabilitatetheproperty,theCoordinatorcanassistbyidentifyingprobonolegalassistanceordetermineiftheownerqualifiesforloansfromtheHousingCommissionornonprofitagencies.Withtheowner’spermis-sion,theCoordinatorcanalsohelp

findinvestorswhomightbuytheproperty.TheexperienceinSanDiegohasshownthatmoneyisnottheonlyobstacletorehabilitation.Morecomplexchallengesincludesentimentalattachments,familydisagreementsoverdispositionofaproperty,mentalillnessorotherincompetency,titledisputes,zoningchangesthathinderacommercialproperty’spotential,litigationoverinsuranceproceeds,hesitancytorebuildafire-damagedunitduetoconcernsthatdoingsowillcausetheownertoloseapreviouslycon-formingright.

OnesuccessachievedrecentlywasfacilitatingthereuseofalongstandingvacanthomeintheGoldenHillsarea,knownforbeautifullyrenovatedVictorianstylehomesandfortheworkofnotedarchitectIrvingGil.Aftertheowner’sdeath,thehomehadbecomeasourceofblightandcrime.TheCoordinatortrackeddownasurvivingniecewhostoodtoinherittheproperty,andassistedherwithassessingthepropertyandfollowingthroughwithaprobateaction.Simultaneously,theCoordinatordevelopedarelationshipwithmembersoftherealestateindustrywithfunds

Progress in San Diego, CA

Coordinating responses to Vacancy

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(knownasNSP1)arelikelytobemodest.Thisis

areflectionofmanyfactors,includingthenature

oftheprogram—whichencouragedtransactional,

property-by-propertyinterventionsratherthan

long-term,strategicapproaches.Additionally

problematicwasthedistributionofNSPfunds,

whichusedaformulathatsentlargeamounts

tohigh-foreclosurebutlow-capacitySunbelt

communitiesthathaddifficultyspendingtheir

moneyinacost-effectiveandstrategicfashion.

AsofMay2010,recipientshadfourmonthsleftto

committhefederalfunds,yetoverone-thirdof

thegranteeshadcommittedlessthanhalf.

ThenewHUDleadershipthatcameinwiththe

Obamaadministrationrecognizedmanyofthese

problems.ThesecondroundofNSPfundingin

2009wasallocatedonacompetitiveratherthan

aformula-drivenbasis,withcriteriathatlooked

explicitlyateachstate’sorcity’splanforstrategic,

market-based,targetingoffederalresources.

Thepercentageoffundsthatwenttoareaswith

systemicabandonmentwasconsiderablyhigher

thaninthefirstround.HUDhasalsochanged

someoftheprogramrulestogivelocalgovern-

mentsandCDCsgreaterflexibilityintheirproperty

acquisitionefforts21andhasbeguntoexplore

creatingatargetedprogramtoaddressthe

issuesofcitieswithlong-termpopulationloss

andsystemicabandonmentissues,although

thetimingandscopeofanysuchprogram

arestilluncertain.

andexpertisetocompletehistoricalpreservationprojects.Despitetheinterestofmanyinvestorsandlocalhistorians,theniecewouldnotsell;theniecewantedheraunttobehonoredandfearedthatheruniquehistorywiththepropertywouldbelost.Byunderstandingtheniece’smotivations,theCoordinatorwasabletoproposeawin-wincourseofaction.Shesuggestedthatwhentheniecefoundaninvestorshefeltcomfortablewith,shecouldrequestthataplaquewithheraunt’snamebeaffixedtothestructure.TheCoordinatoralsoensuredthatthecommunitywasinvolvedduringtherenovationprocess.Oncethepropertywasrenovated,therewasanopenhousesothepreservationcommitteeandthecommunitycouldseethefinishedrenovation.Today,aplaquehonoringthepreviousowneradornsthehome,whichhasbeenrestoredtoitsformerbeauty.

Detroit

Vacant and abandoned lots,

homes, and commercial and

industrial buildings have

been present in Detroit for

years. But the combination

of pre-existing vacancy,

large numbers of foreclo-

sures, and a sharp decline

in the housing market has

lead to unprecedented

instability across the city’s

neighborhoods. Although

every sector in the city is

pitching in to help make

Detroit’s neighborhoods

thrive again—including the

city leadership, which is de-

veloping a comprehensive

strategic framework to guide

efforts—residents and com-

munity organizations are tak-

ing action today to hold their

neighborhoods together.

Oneorganizationthatishelpingtoprovidesupportto,andbuildthecapacityof,thesecriticalgrass-rootseffortsisCommunityLegalResourcesandtheDetroitVacant

PropertyCampaign,whichtheystaff.ThroughtheCommunityandPropertyPreservationProgram(CAPP),CLR/DVPCoperatesagrantprogramthatprovidessupplemen-talfinancialassistancetocommunity-basedorganizationsthatareengagedincommunity-initiatedvacantpropertymaintenance.

Sincelaunchingin2009,CAPPhasserved34organizationsandfundedarangeofactivities,includ-ingalleyclean-upsandlandscap-ing,vacantpropertysurveysandmapping,andevensolarlightinstallations.Althoughthegrantsarenotlarge,community-basedeffortstoreverseblightoftenarestalledbythecostsofequipmentandlabor.Theresourcesprovidedthroughtheprogramaresufficientandareflexiblesotheorganiza-tionscandeveloptherightstrategyfortheirneighborhoods.

Oneorganizationusedtheirgranttoworkwitha“cleancorps”ofneighborhoodyouthtoconductavacantpropertysurvey.Throughphotographsanddocumentationoftheconditions,theteamwasabletorefer283propertiestothecitydepartmentsresponsible,wheremanyarenowinlinefordemolition.

Thesurvey,plusboarding,painting,andcleanupstargetedtowardanareasurroundinganelementaryschool,havehadasubstantialimpactonthesafetyofchildrentravelingtoandfromschool.

AsDetroitandothercitiesallocateresourcesbasedonwheretheas-setsarelocatedinthecommunity,it’simportanttorememberthatengagedcitizensareatremendousassetthatcanbemultiplied.Inadditiontoleadingtomeasurableoutcomes,theCAPPgrantsarealsoawaytofocusonbuildingthecapacityofresidentswhoarewill-ingtospendthetimeandenergytoworktogethertodealwiththeproblemsbroughtonbyvacancies.Onegranteeorganizationnotedthattheprogramis“designedtoengage—andsubsequently—em-powerresidentstoutilizecreativeremediestoabatenuisances…”Anengagedandempoweredcom-munityisoneofthemostimportantelementsofanyredevelopmentproject.WiththeCAPPprograminplaceandthededicatedworkofthecityandcommunityorganizations,Detroitmaybeabletoachievethesuccessesfoundinothercommunitiesacrossthecountry.

Progress in Detroit, MI

Leveraging Community-based Action

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DespitethelimitationsoftheNSPprogram,

overallithashadapositiveeffect.Althoughsome

communitiesmayhavehaddifficultyspending

fundseffectively,otherslikeChicagoandMinne-

apolishaverisentothechallengewithcreative,

innovativestrategies.Farmoreneedstobedoneto

supplementtheirefforts,includingtheleveraging

otherfederalresourcestocomplementtheNSP

efforts,andaligningmanagementanddisposition

practicesoffederally-controlledhousing.

Recognizingthattheeconomiccriseshas

compoundedlong-termdisinvestmentinauto

manufacturingcommunitiesthefederalgovern-

mentrecentlyannouncedacommitmentto

provideover$800milliontopayforenvironmental

remediationandre-conditioningof90brownfield

sitescreatedasaresultoftherestructuringof

GeneralMotors,givingashotinthearmtothe

citieswherethosederelictsitesarelocated.22

Althoughsomeoftheinitialfederalprogrammatic

effortsmayprovetoshowamodeststart,wesee

thepotentialofmorefundamentalchangeinthe

future.TheObamaAdministrationisshowinga

readinesstoattacksomeofthesystemicbarriers

tovacantpropertyrevitalization,andforthefirst

time,moveawayfromthetraditional“onesizefits

all”federalapproachtofocusdirectlyonthe

issuesoftheseverelyimpactedolder,industrial

citiesaswellastolookbroadlyatthelarger

regionalissuesaffectingtownsandcities.

ThePartnershipforSustainableCommunities,

launchedinJune2009byHUD,EPA,andDOT,

representsamajorchangeinfederalpolicy,by

linkinghousing,transportation,andenvironmental

protectionwiththegoalofcreatingmorelivable,

equitable,andsustainablecommunities.Forthe

firsttimeever,thesethreeagenciesareworking

togethertoadvanceagreed-upongoals:aligning

federalpolicies,removingbarrierstocollabora-

tion,andleveraginginteragencyfundingsources

topromotebettercommunitywideoutcomes.An

initialroundof$150millioninsustainablecommu-

nitiesplanninggrantsisexpectedtobeawarded

byHUD,workingwithitspartners,latein2010.

Successful initiatives in the field and the way perceptions

are changing suggest that

this moment is an opportunity that

should be seized.

Boththesuccessfulinitiativesinthefieldandthewayperceptionsarechanging

suggestthatthismomentrepresentsnotjustacrisis,butalsoanopportunitythat

shouldbeseizedbyAmerica’stownsandcities.Atthesametime,thechallenges

aheadaregreat.Thereisnosinglestrategythatcanaddressthevarietyofproblem

propertysituations.Multiplestrategiesforprevention,acquisition,maintenance,

disposition,andfinancingmustbeemployedtopromotetheproductivereuseof

vacantproperties;thesestrategies,moreover,aremosteffectiveonlywhenthey

arepartofacomprehensive,well-designedsystem.Patience,forethought,

collaboration,long-termthinking,sophisticatedmixturesofcarrotsandsticks,

andatransparentprocessthatinvitesratherthanscreensoutparticipationand

criticism,areallcriticaltothesuccessofanystrategythatseekstorebuild

communitiesratherthansimplyfixscatteredindividualproperties.

Framing aPolicy Agenda For Vacant And Abandoned Properties

Basedontheexperienceofstates,cities,

non-profitorganizations,for-profitdevelopers,

andotherstakeholders,weofferthefollowing

principles(seepage40)andrecommendations

toguidefuturepolicyinencouragingand

incentivizingchangeintheunderlyingsystems

forlandrevitalization.

RecommendationsNosingleentity,sector,orindustrycansolvea

community’svacantandabandonedproperty

problemsonitsown.Successtakesmanypartners

andpointsofattack;ittakeswhatChicago’s

HousingCommissionerEllenSahlicallsthe

“allhandsondeck”approach.Atthesametime,

39

1 Vacant and abandoned property issues are complicated, and require complex, multifaceted strategies.Nosingletool,program,or“silverbullet”willfixtheproblem.

2 Communitiesaredifferent,theforcestriggeringabandonmentaredifferent,andthesolutionsaredifferent.We need to move away from “one size fits all” programs and strategies.

3 Theseproblemshavetakenyears,inmanycasesdecades,toemerge,andoftenreflectdeeply-rootedunderlyingproblems.Address-ing the vacant properties problem requires a long-term, sustained commitment.

4 Similarly,a systemic approach is needed to address the forces driving abandonment and reuse of properties,ratherthandisconnectedbuilding-by-buildingortransactionalapproaches.

5 All levels of government can and should play a strong role in addressing vacant property issues,andmustcoordinatetheirefforts,bothamongagenciesatthesamelevelofgovernment,andamongfederal,state,andlocalagencies.Whilethestateandfederalgovernmentscanprovideresources,tools,andsupport,localgovernmentmustbeatthecenter,takingresponsibilityfortheircommunity’sfuture.

6 Taking responsibility for the future of a community means being willing to take responsibility for properties, takingcontrolofpropertieswhennecessarytodeterminetheiroutcomesandbeabletoplanforthefuture.

7 Property ownership is a combinationof rights and responsibilities that go together.Propertyownerswhoneglecttheirpropertiesandallowthemtoblighttheirsurroundingsandharmotherpropertyownersandresidentscannothidebehind“propertyrights”rhetoric.Theyshouldbeheldaccountablefortheirbehavior.

8 Governmentmustlead,butcannotsolvetheproblemsofvacantandabandonedpropertiesbyitself.Solutions require that the private sector, particularly the real estate and financial industries, the nonprofit sector, residents and community-based organizations, all be engaged.

9 Vacantandabandonedpropertiesaffecttheirneighborsmostofall.Residents of affected communities must be engaged in framing strategies to deal with the problem, particularlywherethosestrategies(asinolderindustrialcities)mayinvolvemajorchangestothedirectionofpublicpolicy.

10 Vacant property strategies should be driven by solid data and information, tomakesurethatscarceresourcesareusedeffectively,thatprogresscanbetracked,andstrategiesconstantlyrefinedtoreflectchangesineconomicandotherconditions.

Ten Principles to Guide the Vacant Property Agenda

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differententities,sectors,andindustrieshaveunique

assetsandneedtoplaydifferentroles.Gettingthe

rolesstraight,andworkingeffectivelytogether,isthe

keysteptomakingsolutionspossible.

Roles for the federal government Designprogramsthatreflectthedifferences

betweencommunitiesandmarkets,includingthedifferencebetweensystemicandtransi-tionalabandonment.Federalhousingandcommunitydevelopmentpolicyshouldfocusonthelargergoalsofrevitalizingcommunities,nottransactionsfortheirownsake.

Focusdirectlyonplanningandcommunityregenerationthroughprogramsthatencour-agelocalinnovationandpartnerships.Federalincentiveprogramsshouldincludesupportforreconfigurationoflandusesincitieswithlargeamountsofsurplusvacantlandandbuildings.

Alignfederalprogramstoleverageeachother,suchaslinkingneighborhoodstabilizationandenergy-efficiencyfunds,orCDBGandbrownfieldsprograms,aligningtimetablesandfundingcriteria.

Helpcitiesandstatesgettheinformationtheyneedtomakegooddecisionsbyprovidingusabledataandsupportingthecreationofrealpropertyinformationsystems.

Establishperformanceobjectivesforprogramssuchasneighborhoodstabilization.Theseobjectivesshouldbebasedonsustainableneighborhoodchangegoalsratherthanontransactions,andencouragecreativelocalstrategiestoreachthegoals.

Usefederaldiscretionaryfundingprogramstoleveragesystemchangeatthestatelevel,followingthemodeloftheDepartmentofEducation’s“RacetotheTop.”

Helpbuildthecapacityoflocalgovernmentsandotherstakeholdersthroughtechnicalassistance,training,andstaffingsupport.

Roles for state government Enactlegislationtoenablemunicipalities

totakecontrolovervacantpropertiesintheircommunities,throughtoolssuchaslandbanking,taxforeclosurereform,orvacantpropertyreceivership.

Changestatepoliciesthatfuelabandonment;forexamplebyreformingstatelawsthatgovernmortgageforeclosureandlenderresponsibility.

Facilitateintergovernmentalcooperationandregionalstrategiesbyprovidingincentivesforcooperativeefforts.

Targetstateassistanceprogramstoadvancelocalandregionalstrategiesthatdiscour-agesprawlinggreenfielddevelopmentandincentivizereuseandredevelopmentofvacantandunderutilizedurbanland.

Roles for local government Frameaclearvisionofthecommunity’s

futurethatincludesastrongroleforlandandbuildingreuseandreconfiguration.

Engagethecommunity’sresidentsintheprocessofthinkingthroughvacantpropertyreuseandlandreconfigurationstrategies,beingupfrontaboutthechallengesahead.

Avoid“quickfix”transactionsthatofferlittlelong-termbenefit,andfocusinsteadonsystemicchangeforlong-termtransformation.

Buildthetechnicalandmanagerialcapacityincitygovernmenttoframeandimplementmulti-dimensionalplansforrevitalizationandchange.

PartnerwithCDCs,community-basedorganizations,andotherstoleveragelimitedpublicsectorresources.

Encourageredevelopmentbymodernizinglanduse,zoning,andbuildingregulations,andcreatingstreamlined“onestop”permittingsystems.

Roles for CDCs and other community- based organizations

Gobeyondtransactionalhousingdevelop-mentactivitiestofocusoncomprehensive,market-driven,andsustainableneighborhoodstabilizationandrevitalization,buildinghealthiercommunitieswithstrongsocialcapital.

BuildworkingpartnershipsamongCDCsandothernonprofitorganizationstoleverageavailablenonprofitresourcesbydividingtasksandresponsibilities,sharinginformation,andskills,andcoordinatingpriorities.

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Givevacantandabandonedpropertiespriorityinneighborhoodstrategies,focusingbothonpreventionofabandonmentandreuseofvacantproperties.

Partnerwithcitygovernmentagenciesandotherstoplanandexecutestrategiestopreventabandonmentandaddressvacantpropertieswithinthecommunity.

Roles for foundations and other private sector funders

Coordinatewithotherstakeholderstoensurethateachfoundation’sinvestmentsincommunityrevitalizationcomplementandleveragepublicsectorandnonprofitefforts,reflectingsharedgeographicandprogram-maticpriorities.

Helpbuildcapacityinlocalgovernmentandthenonprofitsectortoplanandimplementeffectivemulti-facetedvacantandabandonedpropertyinitiatives,integratedintolargerrevitalizationstrategies.

Makeacommitmenttolong-termsupportfortheseinitiatives,recognizingthatthesearelong-termefforts,andthatadequatealternativefundingresourcesareunlikelytobecomeavailableintheforeseeablefuture.

Linkfundingdecisionstograntees’willingnesstocreateeffectivepartnershipsandaddresssystemicchallenges.

Roles for the real estate, finance, and development sectors

Developers:partnerwithlocalgovernmentandnonprofitstodeveloppropertiesinwaysthatadvanceneighborhoodstabilizationandrevitalizationefforts.

Realtors:partnerwithlocalgovernmentandnonprofitstoidentifypotentialusesforvacantproperties,anddevelopmarket-buildingstrategiesforcommunitiesandtargetneighborhoods.

Lendersandservicers:workwithlocalgovernmentsandnonprofitstoensurethatforeclosedpropertiesaremaintainedduringforeclosure,andareconveyedtoresponsibleownersafterforeclosuresale.

Lenders:ensurethatadequatemortgagecapitalisavailabletosupportcreditworthyhomebuyersandfinancesoundcommunityandeconomicdevelopmentprojects.

no single entity, sector, or industry can solve a community’s vacant and abandoned property problems on its own.

The scope and

determination of thousands of local stakeholders is little short of awe-inspiring. At the same time, it is not enough.

Vacantandabandonedpropertiesareerodingtheeconomicandsocialfabricof

communitiesacrosstheUnitedStates.LikenotimeinAmericanhistory,theconfluence

ofdisastersintheeconomy,housing,andemploymentmarketsensurethatno

communityisimmunefromthethreatsofforeclosure,vacancyandabandonment.

Atthesametime,themagnitudeofthecrisis,aswellastheinfusionofnewresources

suchasthefederalNeighborhoodStabilizationProgram,haveunleashedawave

ofcreativeenergyonthepartoflocalgovernments,communitydevelopment

corporations,andmanyothersconfrontingthecrisisintheircommunities.

Thescopeanddeterminationofthousandsof

localstakeholdersislittleshortofawe-inspiring.

Atthesametime,itisnotenough.Theirefforts

areoftenscattered,smallinscale,andunlikelyto

leadtolong-term,sustainedchange.Policymakers

andcommunityleadersacrossthecountryneed

togobeyondtheseefforts,recognizethemagni-

tudeoftheproblem,andfocusonthefunda-

mentalchangesinlaws,policiesandpracticesthat

areneededifwearetotackletheproblematthe

scaleitdemands.

Aboveall,weneedtofocusonvacantand

abandonedpropertiesnotjustasaproblem,

butasaresource,onethatwecanusetobuild

stronger,healthiercommunities.Inmanycities,

vacanthousescanbeturnedbackintohomes

forfamiliesrichandpoor,whileobsoletefactories

andofficebuildingscanbecomeloftsand

apartments,orincubatorsforsmallbusinesses

andemergingtechnologies.Oldercitiesthathave

beenlosingpopulationmaybecomesmaller,

buttheycanbecomehealthierandgreenercities,

withcommunityspaces,farms,andstream

corridorsreplacingblightedareas.

Thiscanbeareality,notjustinahandfulofplaces,

butincitiesandneighborhoodsthroughoutthe

UnitedStates.Ifweforgestrong,vitalpartnerships

forsystemicreform,engagingthepublicand

privatesectorsandcuttingacrossmunicipal

boundaries,wecantransformAmerica’scommu-

nities,comingoutoftoday’scrisisastronger,

healthiernation.

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1. Weusethetermsvacant,abandonedandproblemproper-tiestorefertothepropertiesthatareourconcern,butthesetermsareoftenusedtomeanverydifferentthings.Vacantmerelyconveysthatthepropertyisempty,butmanyvacantpropertiesstillhaveauseoraresponsibleownertakingcareofit.Examplesofsuchvacantpropertiesincludearevacationhomesthataretemporarilyunoccupied,housesbetweenownerswhileactivelybeingmarketed,orhousesabouttoberehabilitatedbyanon-profit.Beingvacantisaconditionoftheproperty,notalegalstatus.Abandoned propertiesarethepropertieswhoseownerhasstoppedtak-ingresponsibilityfortheproperty,suchasnotmaintainingitorfailingtopaypropertytaxes.Abandonedpropertiesareusuallyvacantaswell,butnotalways,aswhenalandlordwalksawayfromabuildingwhichstillhastenantslivinginit.Incontrasttovacancy,abandonmenthasalegalaswellasdescriptivemeaning.Problempropertiesarepropertiesthatarecausingproblemsfortheirneighborsandthecom-munity.Whilemanyproblempropertiesarevacantoraban-doned,others,suchaspropertieswherecriminalactivityistakingplace,maynotbe.Still,occupiedproblempropertiesaremorethanlikelytobeonapathtoabandonmentifnotdealtwithintime.Inthisreport,though,wewillusethesetermsinterchangeably.Whenwetalkaboutvacantproper-ties,though,wewillnotbereferringtothose“innocent”vacantpropertieslikesecondhomes,buttothosethatarealsoproblemsforthecommunity.

2. Detroit,inparticularhasbenefited(orsuffered)frommediaattentioninthepastyearortwo,includingacoverstoryinTimemagazine.Awriterforalocalonlinemagazinerecentlywrotethat“Detroitisbeingdescendedonbyaplagueofreporters.Ifyouliveonablocknearoneofthecity’stensofthousandsofabandonedbuildings,youcan’ttossachunkofForditewithouthittingsomeschmuckwithacameraworthmorethanyourhouse.”(QuotedinJohnGallagher,Reimagining Detroit,forthcominglaterin2010).Clevelandwasalsothesubjectofacoverstory,intheNew York Times Magazine.

3. Althoughsomeincreasebetween2000and2008canbeexpected,theincreasereflectedinthesedataappearsunusuallylarge.Thisishardtointerpret,sincethedefinitionsusedinbothdatasetsarecomparable.

4. ThesedataaregatheredquarterlybytheU.S.PostalServiceunderanagreementwiththeDepartmentofHousing&UrbanDevelopment.PostedontheHUDUserwebsite,thedataareaggregatedfromformssubmittedbypostalwork-ers;whileitissubjecttovariability,itoffersausabledatabase,butonethatissubjecttoimportantqualifications.Thedatadistinguishesbetweenvacantproperties,whichhavebeenvacantfor90daysormore,andno-statproperties,whichinclude(1)addressesforbusinessesorhomesunderconstructionandnotyetoccupiedand(2)addressesinurbanareasidentifiedbyacarrierasnotlikelytobeactiveforsometime.IncitieslikeFlintorDetroit,thesumofthosetwocategoriesisagoodreflectionofvacant—andinmostcasesabandoned—properties.Incitieswithlargeamountsofconstructionunderway,orwithlargeconcentrationsofsecondhomes,however,thedataarelessmeaningfulforthesepurposes.Formoreinformationseehttp://www.huduser.org/portal/datasets/usps.html.

5. AlthoughtheUSPSstartedprovidingvacancydatasetsin2005,businessaddresseswereonlyseparatedstartingin2008.

6. Reuters(January2010)http://www.reuters.com/article/idUSN058150520100106.

7. Reuters(April2010)http://www.reuters.com/article/idUS-

TRE6340FH20100405.

8. Crain’s Chicago Business(January2010)http://www.startribune.com/business/99630514.html.

9. Washington Business Journal(March2010)http://wash-ington.bizjournals.com/washington/stories/2010/03/15/story8.html.

10. Star Tribune(August2010)http://www.startribune.com/business/99630514.html.

11. TheproblemisnotuniquetothelargeindustrialcitiesoftheMidwest.Manysmallercommunitiesaroundthecountry,includingmilltownsinthesouth,miningtownsintheWest,orfarmmarketcentersinthePrairiestateshaveexperiencedsimilarpopulationlossastheylosttheactivitythatprovidedthemwithaneconomicbase.

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12. TestimonytotheCommitteeontheBudget,U.S.HouseofRepresentatives,June9,2010availableathttp://www.federalreserve.gov/newsevents/testimony/bernan-ke20100609a.htm

13. NationalLeagueofCities,“SignificantBudgetShortfallsCouldMeanMoreJobLosses,”PressRelease,May24,2010,availableathttp://www.nlc.org/PRESSROOM/PRESSRELEASEITEMS/SoACJobsEcon5.10.aspx

14. “DirtintoDollars:ConvertingVacantLandIntoValuableDevelopment.”Brookings Review,18no.3,Summer2000.

15. NEOCANDOisafreeandpubliclyaccessiblesocialandeconomicdatasystemthatallowsuserstoaccessdatafortheentire17countyNortheastOhioregion,orforspecificneighborhoodswithinCleveland,maintainedbytheCaseWesternReserveUniversity’sMandelSchoolofAppliedSocialSciencesCenteronUrbanPovertyandCommunityDevelopment.

16. ChulaVistatookthisactiononthebasisofitspowersundertheCaliforniahomerulestatute,whichgivescitiesbroaddiscretiontoenactordinancestofurtherhealthandsafety.Inmanystates,amunicipalitywouldnothavethele-galauthoritytoenactsuchanordinanceintheabsenceofastateenablingstatute.NewHavenenacteditsordinancewithoutastatelaw.Subsequently,theConnecticutlegisla-tureenactedalawwhicheffectivelypreventedcitiesandtownsfromenactingsuchordinances,butgrandfatheredNewHaven’sordinance.

17. In1993,thethenDetroitCityOmbudsman,thewell-respectedcivicleaderMarieFarrell-Donaldson,suggestedthatlargevacantareasofthecityreturntogreenuses.Hersuggestionwasgreetedwithamixtureofridiculeandout-rage,andquicklyshelved.Today,thisisofficialcitypolicy.

18. CenterforHousingPolicy,“AHeavyLoad:TheCombinedHousingandTransportationBurdensofWorkingFamilies,”October2006,availableathttp://www.cnt.org/repository/heavy_load_10_06.pdf

19. U.S.EnvironmentalProtectionAgency,“ResidentialConstructionTrendsinAmerica’sMetropolitanRegions,”availableathttp://www.epa.gov/piedpage/construc-tion_trends.htm

20. Sec.2301oftheHousing&EconomicRecoveryActof2008,entitledinthelegislation“emergencyassistancefortheredevelopmentofabandonedandforeclosedhomes”andsubsequentlyrenamedtheNeighborhoodStabiliza-tionProgram(NSP)byHUD,appropriated$3.92billionforthispurpose.Afteranadditional$2billionwasappropri-atedforsimilaractivities(butunderdifferentgroundrules)intheAmericanRecoveryandReinvestmentAct(ARRA),alsoknownastheeconomicstimulusbill,thefirstprogramcametobeknownasNSP1andthesecondasNSP2.

21. AnexampleofthiscomesfromtheJuly2010WallStreetReformandConsumerProtectionAct.TheinitialNSPprogramonlyallowedrehabilitationorredevelopmentofforeclosedorabandonedpropertiestoqualifyforthere-quiredlow-incomeset-aide.Thefinancialreformbillmadeitpossibletoincludevacantpropertiesaswell,openingupthepotentialtodevelopmulti-familyunitsandotherafford-ablehousingonvacantlandandothervacantproperties.

22. NationalEconomicCouncil,“AutoCommunitiesandtheNextEconomy,”Remarks,May18,2010,availableathttp://www.whitehouse.gov/administration/eop/nec/speeches/auto-communities-next-economy

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Jennifer R. Leonard and Alan Mallach

The mission of the Center for Community Progress is to create vibrant communities primarily through the reuse of vacant, abandoned, and problem properties in America’s cities and towns. Community Progress helps local and state governments seize the potential of these properties for the economic and social benefit of their communities. We help leaders advocate for and implement the policy changes to prevent abandonment and to reuse these properties.

Locations421 Garland Street, Suite AFlint, Michigan 48503

1001 Connecticut Avenue, NW, Suite 1235Washington, D.C. 20036

(877) 542-4842

communityprogress.net TRANSFORMING VACANT PROPERTIES IN

TODAY’S AMERICA