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Thinking About/ Intro

Thinking About:  Dealing with Private Property Owners

INTRODUCTION

 

 

Problem properties, occupied or vacant, are everywhere. They can range from poorly maintained but habitable rental buildings to abandoned buildings, open and unsecured, that represent major neighborhood eyesores. In most cities, the great majority of problem properties are privately owned, most often by owners who do not live on the property themselves. For cities that are seeking to preserve, strengthen or revitalize their neighborhoods and downtowns, coming up with effective strategies to deal with the owners of privately-owned problem properties, encouraging responsible owners and cracking down on bad apples, is a critical element in any such undertaking.

 

Why is this important?

Cities  have had to deal with problem properties for many decades. Vacant properties became a major issue in the late 1960s and 1970s, as cities lost population to the suburbs and the Sunbelt. They have become far more serious in many cities during the past five years, as the combination of the mortgage crisis, the collapse of house prices, and the continued sluggish national economy have led to a wave of abandonment and disinvestment. As foreclosures have mounted, hundreds of thousands of REO properties have been snapped up by investors, while, with foreclosure in some states taking two years or more, thousands of other properties languish in a protracted limbo. From a problem that was seen as unique to older central cities, it has spread to the suburbs and the Sunbelt.

 

Problem properties are a drain on the neighborhood’s vitality and the city’s resources, yet if properly handled can become a valuable asset for revitalization. Many studies have documented the dramatic effect that vacant, abandoned properties have on the value of nearby occupied properties, on crime and health, and on municipal costs for police, fire and code enforcement services. While the research has concentrated on vacant properties, there is little question that when occupied properties are overcrowded and poorly maintained, or become venues for criminal and drug activity, they can have just as negative an impact on the community.

 

Experience has shown that a single poorly maintained, neglected property – occupied or vacant – can undermine an entire block. It leads neighboring owners to choose not to invest more money in their homes, while it becomes a signal to a prospective home buyer to avoid that block and look elsewhere. Tackling these properties, therefore, is a critical part of any effort to stabilize or revitalize a neighborhood. A neighborhood stabilization program that does not include a systematic, strategic effort to address the problem properties in the neighborhood – whatever other features it may have – starts with two strikes against it from the beginning.


Philadelphia Cost of Vacant Property Study shows how a reformed land management system would reduce current costs of vacancy in the city, better leverage existing resources and encourage future development.
Greater Ohio Cost of Vacant Property Study examines eight Ohio cities, the impact vacancies are having on these cities and the strategies used to address them.
Baltimore Cost of Vacant Property Study provides a model for determining how much additional cost goes in to servicing areas of the city with vacant properties.

 


Be strategic

The key is to make the strategy systematic and strategic. One-shot code enforcement efforts that respond to complaints with a flurry of citations, or occasional “sweeps” that lack systematic follow-through, may lead to some temporary improvement, but are unlikely to lead to long-term, sustained change. Continuity, consistency and follow-up are essential. In addition, a strategy that is entirely focused on cracking down on problem properties and owners, and does not offer positive incentives for responsible landlords and property owners, is unlikely to be successful. It may drive some people out of business, but may also leave many properties still in bad shape and in the end, even lead to more, rather than less, abandonment.

 

Be realistic

Even with the most carefully thought-out strategy, many cities may never be able to eliminate vacant and problem properties. Underlying economic conditions, particularly in cities with poorly performing housing markets, will continue to exert pressure on owners to cut corners, or even walk away from many properties, until or unless those conditions change. While a successful strategy should motivate many owners to improve their properties, other owners have already given up on their properties, and – unless economic conditions improve – still others will do so in the coming years. Thus, at the same time as one is working with private property owners, it is important to build local government’s capacity to take and maintain problem properties, in order to come up with the best ways to ultimately restore them to productive use.

 

 

Go to Understanding the Rental Housing Sector.