Local governments are responsible for removing or maintaining these properties. And they are overwhelmed by the size of the crisis. The increased pressures caused by mass vacancy — more building-inspector and fire department visits, policing half-empty neighborhoods, keeping lawns mowed and properties secure — are more than local governments are equipped to handle.
And, with the foreclosure crisis still raging, houses are being abandoned at a faster rate than cities can tear them down. A recent Government Accountability Office study shows that cities across America each spend millions of dollars a year trying to keep vacancies from sinking into blight. Detroit, teetering on insolvency, spent $1.4 million over 18 months just to board up houses. Baltimore spends $2 million a year to board up abandoned homes and mow lawns. The GAO acknowledged that it is impossible to tell how much the vacancy crisis is costingcities in overall increased spending and lost revenue, but said that the sums are crippling local governments.
In many cases, local leaders understand that demolition is part of the answer, but they don’t have the resources to pursue it. The federal government’s Neighborhood Stabilization Program, intended to help communities with high foreclosure and abandonment rates, provides some limited funding for demolition. But its focus is on rehabilitation.
Part of the problem is that by the time a city or town is facing an abandonment crisis that calls for demolition, it doesn’t have the resources to deal with it. People often abandon homes when property values collapse, if they are underwater on their mortgages and see no advantage to sticking it out. In turn, the more abandoned properties in an area, the lower property values sink.
In Montgomery County, Ohio, where the city of Dayton has been devastated by foreclosure and abandonment, property values have taken a $2 billion hit since 2008, costing local governments and schools more than $40 million annually.
Things look even worse for Cleveland and Cuyahoga County next year.A December report from the Federal Reserve Bank of Cleveland projects an 11 to 18 percent overall decline in property values countywide, with declines of 38 percent to 45 percent in Cleveland and 26 percent to 30 percent in the city’s inner-ring suburbs.
According to the Cleveland Fed, the average home in Cleveland is on the market for 954 days before it is sold — almost three years. On the city’s East Side, houses now sell for roughly 10 percent of the assessed value.
With abandonment comes crime. Vacant structures provide a convenient hiding place. Ask any police officer who patrols these neighborhoods how vacant properties put them at risk. But you can no longer ask officer Derek Owens of the Cleveland Police Department. He was shot and killed by an assailant who was loitering on a vacant property on the East Side. You can ask Jack Reall, head of the firefighters union in Columbus. He said that when firefighters battle blazes at vacant properties, they are endangered by holes that thieves have cut in the floor to get to the ductwork, which they tear out to sell as scrap metal.