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Déjà vu All Over Again—Vacant Houses and What Not to Do About Them

February 7th, 2008 · by Isaac Seliger · 3 Comments

The Wall Street Journal ran “As Houses Empty, Cities Seek Ways, To Fill the Void” (link goes to a blog that copied the article—see the original here) by Michael Corkery and Ruth Simon on February 6, 2008. They document the large number of vacant and abandoned houses in many American cities and attempts by public officials to address this latest urban crisis. For me, as Yogi Berra once said, “This is like déjà vu all over again.”

Faithful Grant Writing Confidential readers may recall that, in my first post, They Say a Fella Never Forgets His First Grant Proposal, I waxed nostalgically about setting up a Vacant Housing Task Force as a 21-year old intern and proto-Community Organizer a la Barack Obama. I tried all kinds of approaches—chasing down absentee owners, running home repair workshops, starting a nonprofit hardware cooperative, and sitting through endless meetings with local politicos. But it was to no avail, as many houses remained vacant. America finds itself once again mired in the difficult days of 1972 (e.g., vacant houses, endless war, stagnant pop music scene, etc.) and bright young minds once again confront the vacant house conundrum.

While Corkery and Simon did a nice job with the basic story, they did not explore the long history of public agency attempts to grapple with the vacant housing issue. They mention the Community Development Block Grant (CDBG) program, which can be used to tackle this issue, along with about 482 other social problems, but they did not cover other efforts. For example, HUD’s 203(k) Housing Rehab program sells HUD-owned houses to nonprofits at a discount, provided they rehab the houses and sell to low-income people.

Also, at one time HUD had a Urban Homesteading program that provided cities with HUD-owned houses. I don’t think this program still has funding, perhaps making it a Zombie program, but there were also variations that encouraged cities to resell the houses to police officers and teachers in hopes of diversifying disadvantaged neighborhoods. There are lots of other well-intentioned state and local government initiatives, all designed to recycle vacant and abandoned houses.

Corkery and Simon come up with many wringing of hands and gnashing of teeth quotes from grim public officials in such places as San Diego and Cleveland—now there’s an odd couple—about the dire consequences of what is supposed to be the biggest vacancy problem since the Great Depression. Yikes! What to do? The article suggests such approaches as “land banks,” which is a great way of replacing vacant houses with vacant lots. The representative of the Genesee County Michigan Land Bank seems proud that the Land Bank has bought and demolished 800 houses and built 200 houses. It they keep it up, eventually no one will live in Flint, the city immortalized by Michael Moore in Roger & Me. Regardless of whether the Land Bank is a good thing, it’s hard to see how creating more vacant lots will stop speculators from “perpetuating neighborhood blight,” as reducing density will probably have the same negative impacts on neighborhood vibrancy that Jane Jacobs wrote about in 1961.

The article also suggests that another solution is to somehow have a public agency buy the vacant houses and resell them to poor folks, keeping the houses “affordable.” Having also worked on endless schemes like this when I was the Development Director for the City of Inglewood, CA, the major problem is that such an effort often involves deed restrictions, which in turn restrict the ability of low-income homeowners to gain future price appreciation and virtually guarantees they will never get out of poverty and the neighborhood will never become economically diverse. If a large number of low-income homeowners cannot benefit from rising property values—which over time will probably happen—and can only sell to other low-income buyers, which is a central tenet of these programs, the entire community becomes stuck in an economic rut.

So, under the banner of trying to preserve affordable housing, the public agency can end up inadvertently causing the neighborhood to stagnate. Perhaps Flint should emulate Detroit, where urban farmers plant corn in neighborhoods where houses once stood. It may seem odd, but there is a movement in Detroit, a city with vast stretches of empty residential lots, to plow up the infrastructure and put the land to agricultural uses. The grant writer in me starts salivating at this idea, as once could combine biodiesel production with bootstrap economic development and help the vacant housing crisis—a grant writing trifecta.

My experience, starting with knocking on doors in North Minneapolis long ago, is that none of these efforts work, or at the very least none will be consequential enough to notice. Eventually, market forces will equalize and the houses will become so inexpensive that people will move back in, fix them up and the neighborhood will gentrify. This is an interesting narrative, but, as Tim Harford writes, “[...] neighborhoods do not tend to ‘up and come’ at all. Anyone who doubts this should look at Charles Booth’s famous map of London’s rich and poor areas at the end of the nineteenth century [...] Overlaying Booth’s map with today’s poorest areas is a sobering experience: With few exceptions, yesterday’s poor areas are also today’s poor areas.” This is probably less true in the United States—think of Manhattan of the 1970s versus today—but still instructive.

Of course, if gentrification does happen, this will start the handwringing all over again, as periodically the New York Times will run a story about the poor folks being driven out of their homes by gentrification, instead of predatory lenders. Newspapers thus have a choice of running two stories in alternate years: falling housing values are harming the poor by destroying neighborhoods, or rising housing values are harming the poor by pricing them out of the market. In either case, newspapers confirm that poor people are always getting screwed one way or another, which is probably true.

As a grant writer, however, I am delighted to see the media and our politicians focused on a new crisis because, wherever a major social problem emerges, grant programs are sure to follow. Not to hope for doom, but, as Chairman Mao said, “let a hundred flowers bloom.” When Congress comes up with a new grant program to address the vacant housing challenge, as it surely will, Seliger + Associates will be ready to write the proposals till the next crisis arrives.

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