The high cost of abandoned property, and how cities can push back

The vacant homes strewn across many U.S. cities create blighted gaps on the landscape. While empty reminders of past development may present community challenges, according to a new report, these properties can also be potential vehicles for change.

“The Empty House Next Door,” a new report from the Lincoln Institute of Land Policy examining abandoned and unused properties, offers a deft accounting of the cost of these buildings on the surrounding areas. While they aren’t a new phenomenon, vacant buildings, especially in blocks or neighborhoods in legacy cities such as Detroit and Cleveland, have reached “epidemic level.”

Compiled by urban scholar Alan Mallach, the report offers a sobering snapshot of just how widespread vacancy has become, especially in the aftermath of the Great Recession. “Hyper-vacancy,” defined as blocks and neighborhoods where vacant buildings and lots comprise 20 percent or more of the building stock and “define the character of the surrounding area,” has spread across many communities, especially formerly industrial and Rust Belt cities. By 2010, one out of every two census tracts in Cleveland could be considered hyper-vacant.

Mallach considers the condition an epidemic, a multifaceted challenge for legacy cities. While most redevelopment plans and projects focus on addition—new housing, transportation, and public spaces—vacancy and hyper-vacancy require painful and costly subtraction. With vacant properties placing severe fiscal strain on cities, reducing property tax revenue while costing millions of dollars for policing, inspecting, cleaning, and in many cases, demolition, it’s a vast challenge that’s inspired creative policy solutions.

Lincoln Institute of Land Policy

The high cost of losing owners

Vacant properties aren’t new. According to Mallach, the roots of today’s problem lie in the Great Recession and subsequent foreclosure crisis, in which many homeowners, especially lower-income residents, lost their homes. Combined with the declining population in legacy cities, vacancies have skyrocketed.

There isn’t a single standard for measurement to calculate the scope of the issue, but some estimates suggest the number of unoccupied homes rose steeply between 2005 and 2010, from 9.5 million to 12 million. According to census figures, which measure “other vacant” units, defined as those neither on the market, held for future occupancy, nor used only seasonally, the number grew from 3.7 million in 2005 to 5.8 million in 2016.

City surveys, which have often produced the most accurate results, also show a significant problem. Gary, Indiana’s Parcel Survey found 25,000 vacant homes or lots, covering 40 percent of the city’s parcels, and Philadelphia found 40,000 vacant lots with no known use. According to Detroit Future City, a local nonprofit, the city had more than 120,000 vacant lots in 2017. As of 2015, Detroit had 21 square miles of vacant lots, a land mass that, if combined and connected, would be roughly the size of the island of Manhattan.

Shutterstock

Seen as eyesores, public safety hazards, and crime magnets, abandoned houses represent a real financial drain on both neighbors and the city at large. Neighborhood fragmentation and community isolation—the sense no one cares, and thing aren’t getting better—are powerful side effects, though harder to quantify.

But the true cost to cities has been examined in various studies, and it can be staggering. A study of vacant property in Toledo found that they cost the city $3.8 million annually in direct cost, as well as $2.7 million in lost tax revenues. But the impact they have on their surroundings was even more significant: $98.7 million in lost property value, and an estimated $2.68 million in lost property tax value due to the perceived decline in value from being near vacant buildings. These empty buildings are sinks for urban real estate value.

Other studies reinforce these unfavorable conclusions. A study in Columbus, Ohio, found a vacant building on the block can reduce the value of nearby properties by 20 percent or more, while a 2010 Philadelphia study estimated that vacant properties result in $3.6 billion in reduced household wealth citywide due to the blighting impact on neighboring properties.

How cities can fill in the holes

Mallach’s analysis finds plenty of structural issues keeping cities and neighborhoods strewn with abandoned and vacant property, most notably the high legacy costs associated with empty homes and abandoned lots. But there have been some bright spots and innovative policy ideas that showcase the potential for rebuilding neighborhoods.

Many cities, including Detroit and Cleveland, have focused on demolition programs and land banks to remove eyesores and put property back onto municipal tax rolls and into productive use. More than 150 land bank authorities have been established across the country, mostly in Ohio and Michigan. The Federal Hardest Hit Fund has been a great asset for knocking down and clearing out vacant homes.

Some cities have formed more robust programs to rehabilitate and resell homes. In Cleveland’s Slavic Village neighborhood, the Slavic Village Recovery Project (SVR) has turned vacant blocks into an asset, tearing down and transforming homes strategically to create affordable single-family homes that sell for $50,000 to $69,000 to buyers (without the use of public subsidies). The Youngstown Neighborhood Development Corporation (YNDC), another Ohio organization, has created a similar program, cutting vacancies and selling dozens of newly restored homes.

Photos by Michelle and Chris Gerard.

Other city agencies and local nonprofits have turned to greening these buildings and lots, creating urban farms, pocket parks, and community gardens. Philadelphia’s LandCare model has been held up as an affordable model for converting empty parcels into community green spots. By focusing on simple, inexpensive fixes—basic sodding, tree planting, and construction of rudimentary, split-rail fences—the group has upgraded and improved more than 7,000 lots. Creativity, not cost, can be the biggest barriers to change. Detroit Future City’s Field Guide for Working with Lots and Baltimore’s Green Pattern Book, design guides created by community advocates, have inspired groups across the country to recover and reimagine the possibilities of these blank spaces in the community canvas.

Greening strategies often get held up as “consolation prizes” for disinvested neighborhoods, Mallach says, quoting a report from Detroit Future City. But that can be a dismissive way to look at how relatively low-cost fixes can be a financial boon for cities, and help turn land and lots from unproductive to active. “Open space is a solution for Detroit’s future,” the DFC report continues, “not an unwelcomed result of Detroit’s past.”