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untanglingwebs
El Supremo
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The Center For Community Progress Blog
Ending Land Speculation That Drives Blight: Change the System, Change the Players
Posted March 8, 2012
Dan Kildee, President, Center for Community Progress
While many housing and community activists have long intuited that well-financed “vacant property speculators” were wreaking havoc in their communities – driving down prices, prolonging vacancies and spreading blight – a new study by the Cleveland Fed both substantiates their suspicions and opens up the discussion about thoughtful solutions.
The Cleveland Fed’s study documents that the majority of vacant homes that are bought from private owners or at tax sales by individuals or small operators are eventually bought and their taxes paid. On the other hand, properties bought by “speculators” – those who make a business of buying and flipping vacant homes — much more frequently remain vacant, unmaintained and tax delinquent, causing distress and blight for neighbors and governments alike.
In a study of vacant properties sold in Cuyahoga County between 2007 and 2010, the Fed found that only 15% of the properties bought by individuals remained vacant in 2010 – but a full 31% of those properties bought by large-scale investors remained vacant. More distressing is the fact that while the delinquent taxes on properties bought by individuals almost always get paid, professional ‘flippers’ resolved tax delinquency on only 13% of their properties resolved their tax delinquency – extending the period of time in which government loses revenue and houses stand vacant.
While the ‘evil-doers’ may be the large land speculators, the Cleveland Fed points out that it is the system of property transfers itself that is fundamentally at fault and that must be fixed. Today, there is no “downside” or cost to large-scale speculation. In most locales – and especially in very depressed housing markets – so-called “investors” can purchase property for as little as a few hundred dollars and sell this property to a third party for hundreds or thousands of dollars more, in a sale that is recorded as legitimate by the relevant county – without any requirement that the seller/speculator pay past due taxes or maintained the property to even minimum standards. In rare instances, the third party buyer who finds that he or she owes thousands of dollars in delinquent taxes actually pays up – but all too often the buyer simply walks away. For speculators, it’s a great system – they have little risk, no responsibility and the potential of great reward.
However, for those of us concerned with the well-being of our communities and the sustainability of our local governments, there is great risk and changing the system is a necessity. The Cleveland Fed suggests two paths of action – both of which the Center for Community Progress has long championed. They call for changes in state laws that require payment of all delinquent taxes and liens BEFORE a property transfer can be completed and certified by the various County Recorders of Deed. This makes obvious sense – it would encourage legitimate buyers and discourage quick-buck speculators, since they would have to pay up before getting paid off.
The Fed also suggests creating and utilizing land banks – locally managed entities to which property buyers or owners could relinquish properties that they cannot financially support – ensuring that the property can then be positioned for productive reuse by a responsible party. The land bank in Cuyahoga County and the one I established in Genesee County Michigan already play that role, and have restored thousands of properties to productive use – and up-to-date tax payments.
In addition, I would counsel the replication of ordinances such as those recently passed in Illinois, both by the City of Chicago and the Cook County Board of Commissioners. These ordinances, like those in place in communities across the country, require that any purchaser, owner or servicer of a vacant property register that property and take responsibility for the property’s maintenance, security, taxes and insurance – creating a cost to the neglect that typically accompanies irresponsible speculation where there was none before
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If we are going to make progress in stabilizing neighborhoods and rebuilding the housing market, we cannot allow reckless and often willfully irresponsible speculation to continue – with short-term profiteers ditching their maintenance expenses on taxpayers while they reap the profits of a system that falls short in encouraging responsible re-use. By reforming the process of land sales for distressed properties, by holding owners and mortgagees accountable for the condition of their abandoned houses, and by creating land banks as an alternative to low-end speculation, America’s cities and towns may not be able to stop greed and unethical speculation, but at least those who prey on weak markets won’t have an ally in City Hall.
Read the original article on The Huffington Post.
Last edited by untanglingwebs on Thu Apr 25, 2013 4:56 pm; edited 1 time in total |
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Sat Oct 13, 2012 6:18 am |
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untanglingwebs
El Supremo
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"However, for those of us concerned with the well-being of our communities and the sustainability of our local governments, there is great risk and changing the system is a necessity. The Cleveland Fed suggests two paths of action – both of which the Center for Community Progress has long championed. They call for changes in state laws that require payment of all delinquent taxes and liens BEFORE a property transfer can be completed and certified by the various County Recorders of Deed. This makes obvious sense – it would encourage legitimate buyers and discourage quick-buck speculators, since they would have to pay up before getting paid off."
The Land Bank does not do this. There are a great many number of liens on properties thaat have been borne by the taxpayers. Flint, for years placed water liens on properties every May for unpaid water bills. The ordinance stated the water should be turned off for any bill over $300. However, the county Treasurer would pay this bill and carry it for nearly three years. There cama a point in time when there had to be a reconciliation and all of these unpaid bills had to be reconciled.
The same issue for liens against the property for special assessments, such as weed and trash abatement. Instead of dealing with these issues in court they were addded to the tax bills. Efforts to revise collection methods in court were met with layoffs by council in budget cut backs.
If these special light and trash assessments are not paid, they go to the Treasurers office. At some point there must be a reconciliation of these bad accounts and the Treasurers office will collect back these fees, plus interest and other fees.
When HUD allows the City to use grant monies to demolish a house, then a lien must be placed on the property in an attempt to recoup the money spent for demolition.
Kildee's theory means for an indiviual to buy a reclaimed lot or house, we must expend a lot of money. I remember when Greater Eastside paid nearly $16,000 for a house to rehab that had a roof that was falling in. |
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Sat Oct 13, 2012 6:36 am |
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untanglingwebs
El Supremo
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But all rules fall to the wayside when the Land bank is involved in development. Then programs such as NSP programs transfer properties for negligle amounts of money. The land bank recently sold multiple lots to a minority landlord for $100 each. The landlord stated that she owned most of the land and homes that encompassed close to a 2 block area. Isn't this possible speculation that this land will be valuable in the future?
I did not object to the Church buying land near the church to be used by the chrch after all the Land bank has long had a policy of allowing property owners to purchase aadjacent lots when they have been maintaining the property. They also paid $100 per lot.
Then the Land Bank sold over 20 properties to Kettering for $100 per lot. When Flint West Village was contemplating bankruptcy, the board allowed then board member and Vice President of Kettering, David Dougherty, to buy three lots for $1,000 each to later be transferred to Kettering. The bankruptcy Court was repulsed by this flagrant conflict of interest and considered legal action over the transfer. Kettering was then forced to pay additional money for the lots. The newest fraternity on University drive is the site of these lots that were in dispute.
I did find it objectionable that Sims and Clack objected to a young homeowner who had been discussing the purchase of a side lot on McAra that was originally in the Kettering packet. The cries of "institutions over individuals" had a hollow ring to it. Kettering will eventually purchase over 70 properties. Do the future plans include the relocation of all low to moderate income propety owners in the area. some homeowners were contacted years ago. |
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Sat Oct 13, 2012 6:57 am |
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untanglingwebs
El Supremo
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Kildee wrote this when he was Genesee County Treasurer. What Kildee did not say in this article is that he was instrumental in rewriting the latest Land Bank Law, one which gave most of the control and power locally to the Genesee County Commissioners. The Land bank bylaws determine who in the Flint City Council gets to represent Flint, instead of Flint chosing.
Web Results
[PDF]
Land Banks as Revitalization Tools - Global Metrop...
metrostudies.berkeley.edu/pubs/proceedings/Shrinking/17Gillotti_PA_final.pdf
Land Banks as Revitalization Tools: The example of Genesee County and the City of Flint,. Michigan ... Michigan's former system of tax foreclosure, abandoned properties were either transferred to ... topics relevant to weak market cities. 2 ... |
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Sun Oct 14, 2012 7:22 am |
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untanglingwebs
El Supremo
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The first time the commissioner used their power to chose a representative, they selected SIMs. Sims later was able to use to have her daughter receive a down payment assistance program through the county to purchase a home owned by Sims in the Beecher area.
The County Planning Commission minutes reflect that when asked by a member who is Charles Young of Operation Unification that Sims promoted him as a Beecher boy trying to good for the community. Operation Unification got the contract while they did not qualify for CHDO (Community Housing Development Organization) status under HUD rules. |
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Sun Oct 14, 2012 7:27 am |
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untanglingwebs
El Supremo
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Kildee has been pushing his land Bank concept across the United States. Thank goodnes the Genesee County Treasurers office had a strong Deputy Treasurer as she ran the office while Kildee ran around making speeches.
To paraphrase the Dems phrase against gadola: How can we trust him to represent us in congress when he was MIA as Treasurer?
Land Bank Fact Sheet
September 21, 2012
SUPPORT HB 1682: PENNSYLVANIA’S LAND BANK ACT
Blighted properties cost Pennsylvanians billions of dollars each year.
There are an estimated 300,000 vacant properties across Pennsylvania.[1] Of those, 20,000 are in Pittsburgh and 40,000 are in Philadelphia.[2] A 2010 study found that Philadelphia alone lost $3.6 billion in household wealth due to blight.[3]
On top of those personal losses, municipal governments are also losing money. The City of Philadelphia spends $20 million each year just to maintain vacant properties.[4] Smaller communities face similar financial burdens. Blight costs everyone.
Revitalizing blighted properties is an enormous economic opportunity for Pennsylvania.
If all of Pennsylvania’s 300,000 vacant properties were put back onto market, construction activity would create new jobs, new homes and businesses while reducing the local maintenance burden and restoring lost home equity. The same study projected that a more efficient and predictable land recycling system would enable development of additional homes and businesses generating 800 jobs, $30M in earnings and $1.9M in new tax revenues in Philadelphia alone.5 Imagine what a difference it would make in your community.
Change needs to happen before revitalization is possible.
The Genesee County Land Bank has helped private developers renovate and rehabilitate hundreds of vacant properties in and around Flint, Michigan, but the Land Bank itself has also helped revitalize the town. The Land Bank Center in downtown Flint was a $4.1 million mixed-use investment that launched wider revitalization on Saginaw Street: 7 vacant buildings were rehabbed providing approximately 150 new residential units and 60,000 square feet of leasable commercial space; approximately $60 million was subsequently invested in the blocks immediately around the Land Bank Center.
Antiquated state laws make getting clear title difficult and costly, and limit how municipalities can acquire, manage and dispose of properties. Interested buyers for these properties are often overwhelmed by obstacles such as inability to find the owner or lack of clear title and no clear path to get it. Debt on abandoned properties can exceed the worth, making sale impossible.
Today, Pennsylvania has a chance to strengthen our cities and towns by authorizing the establishment of Land Banks by enacting HB1682.
Land banks are locally created and locally controlled entities with the single purpose of amassing, inventorying, managing and marketing blighted, abandoned and tax foreclosed properties. Land banks are state enabled and make sure every property has a clear, insurable title, helping deteriorated and unused properties get back onto market.
Land Banks are designed to make it faster, easier and cheaper for any interested and responsible new owner -- developers, community groups, neighbors, farmers, gardeners, builders and realtors - to purchase blighted, abandoned properties, and get them back into productive re-use.
Support PA House Bill 1682
Visit www.housingalliancepa.org for more information about how to voice your support for this important legislation.
An Overview of PA House Bill 1682 LAND BANKS
Introduced by Representative John Taylor (R-Phila.), the proposed Land Bank Bill (HB1682) would authorize counties and municipalities with populations of 10,000 or more to establish land banks, a flexible and optional tool meant to help strengthen our cities and towns by enabling them to systematically remove problem properties from an endless cycle of vacancy, abandonment, and tax foreclosure, and return them to productive use. HB 1682 is:
•Permissive: Gives local governments the ability to create land banks, but does not require them to do so.
•Flexible: Extends maximum control over the creation and operations of land banks to local governments. Each land bank can be specifically tailored to the needs of its community.
•Revenue Neutral: A land bank created pursuant to HB 1682 would be self-
funding after its initial start up, which could be paid for with Community Development Block Grant funds, charitable donations or realignment of existing resources. There is no state appropriation in the bill.
The Land Bank Bill would permit land banks to engage in bulk quiet-title proceedings so that title insurance could be obtained and title would be marketable.
Land banks address a vast inventory of problem properties that need to be cleared of debts, and maintained, made available for private purchase, and managed where real estate markets are weak or distressed.
Do land banks infringe on property rights? Land banks protect property rights. Our current system allows irresponsible property owners to steal equity from law abiding, tax-paying owners. The presence of a blighted property on a block reduces the market value of neighboring properties by thousands of dollars. This not only harms those owners, it reduces the taxable value of their properties, thereby taking revenue from local governments.
Why not use existing entities, like redevelopment authorities (RDAs) or local governments? RDAs are generally focused on specific areas or projects and do not take a comprehensive approach to bolstering real estate markets.
Many local governments do land bank properties, either intentionally through strategic acquisitions or reluctantly via the tax claim bureau repositories, but few have the staff or financial resources to effectively maintain, manage, and market these properties. As a result, local governments can become exactly what they are trying to fight – large scale owners of vacant and blighted properties. Land banks, on the other hand, have the technical and financial capacity, and the focus, to systematically inventory, maintain, and sell properties in a way that strengthens local markets.
Where capacity already exists at the local level, land banks can contract with local governments or RDAs to administer land banking functions and utilize the new tools provided in HB 1682. Land banking functions, though, would be a separate line of businesses. For example, land banks may not use eminent domain to acquire property. Therefore, any RDA-administered land banks would need to keep land banking work separate from activities involving condemnations.
Land banks are already working in Michigan
, Georgia, Kentucky and Missouri. They are the most promising new tool for Pennsylvania’s communities to reclaim blighted, abandoned property and put it into productive reuse.
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[1] The 2010 U. S. Census documents 384,145 vacant non-seasonal housing units in Pennsylvania. There is no official count of vacant buildings. In addition to these vacant homes, there are a significant (but uncounted) number of vacant parcels of land across the state.
[2] 2000 Census
[3] “Vacant Land Management in Philadelphia: The Costs of the Current System and the Benefits of Reform |
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Sun Oct 14, 2012 7:47 am |
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untanglingwebs
El Supremo
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The Genesee County Land Bank has helped private developers renovate and rehabilitate hundreds of vacant properties in and around Flint, Michigan, but the Land Bank itself has also helped revitalize the town. The Land Bank Center in downtown Flint was a $4.1 million mixed-use investment that launched wider revitalization on Saginaw Street: 7 vacant buildings were rehabbed providing approximately 150 new residential units and 60,000 square feet of leasable commercial space; approximately $60 million was subsequently invested in the blocks immediately around the Land Bank Center.
Notice how the emphasis on land Development is focused on Downtown!
There is another $30 million plus being planned for downtown in addition to the $60 million already spent. The Land Bank was instrune=mental in the conversion of the berridge Hotel, a greatly needed project. However, their loft sales never materialized and became loft rental instead , prompting a HUD finding.
Land bank should be more correcly identified as government controlled development. |
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Sun Oct 14, 2012 7:58 am |
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untanglingwebs
El Supremo
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Issue #150, Summer 2007
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Small is Beautiful - Again
The shrinking cities movement imagines revitalization without growth - and housing advocates take a hard look at what that means for the poor.
By Miriam Axel-Lute
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No community developer likes to be told that the housing she just built was "not doing anybody a favor." But that's what Jay Williams, the young, incredibly popular mayor of Youngstown, Ohio, said to Governing magazine last fall about much of the low-income tax-credit housing built in his city over the past decade.
Williams is not anti-affordable housing. But Youngstown has lost more than half its population since 1970, dropping to 82,000 from 170,000. Some neighborhoods have only a couple of occupied buildings left per block. Others are semi-rural, never having gotten expected development before the collapse of the area's steel industry depressed the local economy. In the mid-20th century, Youngstown was a booming steel center. But on "Black Monday," Sept. 19, 1977, Youngstown Sheet and Tube announced it was closing most of its operations. By the mid-1980s, the industry the city had relied upon had withdrawn or collapsed. Average home values in the poorer neighborhoods hover around $8,000, and even seasoned planners like Terry Schwarz, at the Urban Design Center of Northeast Ohio, say the amount of abandonment is "stunning."
The housing market is weak enough that Youngstown's chief planner, Anthony Kobak, notes that many in the city have said building a new house just produces an abandoned building elsewhere in the city. New housing scattered in some of the emptiest areas, sometimes between two abandoned buildings, is the kind of development that drew Williams' disparaging remark.
The mismatch between the city's physical size and infrastructure and its population is serious enough that during the 2002 to 2005 Youngstown 2010 planning process, a vision embracing Youngstown as a dramatically smaller city bubbled up from the community. The planners embraced it and made it a central piece of their new vision. Williams guided the process in his previous role as director of community development, and it is his mandate as mayor to implement it.
How to implement it is the difficult question. The long-term vision is to target the city's efforts and resources to bringing back a dense, vibrant urban core and to eventually return some of the emptiest areas of the city to green space. In the short term, it means hard choices. For example, the city used to offer housing rehab grants to low-income residents on a first-come-first-served basis. But now they have decided not to approve them for the most devastated areas, targeting their limited resources to areas where they are more likely to have a bigger effect. For Youngstown and other shrinking cities, these hard choices are putting a new twist on the challenge of balancing the needs of places and people.
Shrinking Cities Movement
The United States is famous for clinging to the belief that bigger is better, so it's no surprise that research on policies for "shrinking cities" (also known as "smart decline," in a play on "smart growth") began in Europe. East German cities emptied precipitously after the fall of the Berlin Wall, prompting researchers and planners to start asking what one does with a half-empty city.
The term "shrinking cities" was coined for a project begun in 2002, initiated by the German Federal Cultural Foundation and the architecture magazine archplus, and financed largely by the German government. The Shrinking Cities International (SCI) project gathered four interdisciplinary teams to study shrinking cities around the world - Detroit, Mich.; Manchester and Liverpool, England; Ivanovo, Russia; and Halle and Leipzig, Germany. The project's second phase involved a call for "interventions" to address shrinking cities, especially in Germany, other than just knocking down large housing towers.
The concept has gained currency among some American urban studies researchers, including those at the Institute of Urban and Regional Development at the University of California, Berkeley, who have created a Shrinking Cities Group.
Youngstown may be one of the first American cities to embrace the term, but the United States has plenty of places that meet the description: Think Detroit or Cleveland. The most visible and most troubling thing these cities share is an epidemic of abandoned property. In Flint, Mich., the five-year-old Genesee County Land Bank owns a full 10 percent of the parcels in the city. In Cleveland, one neighborhood is called "The Forgotten Triangle," which Schwarz calls "the most disturbing name for a neighborhood" she's worked in. Empty parts of downtown Detroit are often described as "urban prairie," home to enough wild pheasants that the city has exported some of the birds to rural areas.
Trying to revitalize a city that has contracted this far can be a daunting task. Joe Schilling, of the National Vacant Property Campaign, recounts how community developers in Cleveland came to see that they were bringing 200 to 300 new housing units on line every year, but losing about 1,000 to foreclosure and abandonment. Property values in the most depopulated areas have often dropped so far that remaining owner-occupants are trapped.
"In some neighborhoods, you could channel public dollars into those neighborhoods from now into the future and not have the kind of impact you were hoping to see," says Schwarz. Building new low-income housing in these areas may only serve to trap people in areas of concentrated poverty.
Another descriptor often used for struggling cities is "weak-market," and although there is considerable overlap between the two concepts, not everyone agrees on their application. Kim Burnett, community revitalization program officer at the Surdna Foundation, says that at one shrinking-cities-themed conference she attended, hot-market cities that had recently had a modest population dip, such as Boston or the San Francisco Bay area, were deemed shrinking cities, although their needs differ markedly from those of Detroit or Youngstown. On the other hand, notes Burnett, some people studying these cities believe that weak-market cities can be induced to bounce back, and therefore it is a mistake to plan for them to stay small. "It is really hard to get people to accept that they're not going to be the city they were," says Burnett.
Even among those who are applying the shrinking-city lens to weak-market cities only, there is no consensus about how to achieve the goal of "right-sizing," or matching a city's infrastructure, budget, and amenities to its size so it can regain a functioning economy and healthy neighborhoods. Their most common recommendation is to stop spreading development investment evenly throughout a city, instead targeting a select group of neighborhoods. The idea is to be able to reach a threshold of investment that will catalyze a turnaround. Richmond, Va., pioneered the targeting concept with its Neighborhoods in Bloom program. A 2005 study of the program by the Federal Reserve Bank found that an investment of $20,100 per block seemed to be a critical mass of funding that spurred dramatic improvement and the return of the private market.
Where advocates of right-sizing part company from past practices and other attempts to spur revitalization is that they are not aiming to redevelop every acre. As Dan Kildee, treasurer of Genesee County, which is home to Flint, Mich., notes, if the market isn't there, trying to force it will just perpetuate the speculation and abandonment cycle. Kildee spearheaded the creation of the Genesee County Land Bank (GCLB). Like most land banks, GCLB takes control of tax-foreclosed properties (they now control 10 percent of the parcels in Flint) and manages them until they can be returned to productive use. However, unlike many land banks, GCLB isn't trying to resell every parcel at all costs. For many properties it makes more sense to turn them into green infrastructure: side yards for homeowners, parks, trails, urban agriculture, community gardens, open space
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Youngstown, too, recognizes that it can be generous with its land. It is even looking into offering land to companies that need to create new wetlands to mitigate development elsewhere. "Maybe 10 or 15 years from now, as a neighborhood heals and the land heals, there might be an opportunity to transfer some of this green infrastructure back to housing or neighborhood commercial," says Schilling.
In fact, Youngstown's long-term and somewhat controversial goal is to allow or encourage some areas to empty out fully enough that the city can scale back services such as sewers or plowing and even contemplate removing some streets altogether. This would bring the city's infrastructure costs more in line with its population and allow it to focus its resources more on a healthy core. It makes sense, says Karina Pallagst, program coordinator at the University of California's Institute of Urban and Regional Development, but no one has made it happen yet.
Left Behind
The catch, of course, is that "depopulated" doesn't mean empty. "We like nothing better than a blank slate," says Schwarz, "but it's not blank at all." She notes that even Cleveland's Forgotten Triangle still has 1,200 residents. "The people left behind are entrenched, and really, really vulnerable," she adds. These residents often have few choices about where to live, and many of them rely on social networks that are still place-based, "even in neighborhoods that look bombed out," notes Liz Hersh, executive director of the Housing Alliance of Pennsylvania.
Few people would disagree with the goal of taking control of abandoned properties and demolishing those that are not salvageable. That is a big enough challenge. But anything more than that poses a particular challenge for the community-development world and its historic commitment to distressed city neighborhoods.
If the remaining residents are not taken into account, the results can be ugly. To Irene Baldwin of the Association for Neighborhood and Housing Development in New York City, taking certain areas off-line is reminiscent of a policy of "planned shrinkage" proposed (and, residents say, implemented, though it was never made formal) by then-New York City Housing Commissioner Roger Starr in the Bronx in the 1970s. "They actually decreased essential services - police, sanitation, etc. in certain neighborhoods," says Baldwin. "It was an awful, failed policy that those neighborhoods are still recovering from in some ways."
Of course, anyone looking at New York's housing market today, or even 15 years ago, would be hard-pressed to imagine policies designed for shrinking cities to be relevant there. But it should stand as a reminder that "policymakers and funders sometimes are wrong in their predictions about neighborhood viability," says Hersh.
"Hindsight is 20/20," agrees Beth Lewis, executive director of Jubilee Urban Renewal Corp., which in cooperation with two other organizations built much of Youngstown's tax-credit housing over the past decade. "It's hard to know what a neighborhood is going to look like until the abandoned homes come down."
Even if you are right about a neighborhood's viability, there's still the question of creating humane policies for the people who've stayed put. Jennie Dennison-Budak, the director of Interfaith Home Maintenance Service in Youngstown, understands wanting to direct new construction and major rehab dollars for the most impact. "It's hard to justify putting $50,000 into a $20,000 house that's the only house on the street," she says.
Interfaith provides emergency or necessary home repairs, such as installing a new furnace or fixing a water main break, to low-income owners on an as-needed basis. Dennison-Budak sees this as a very different question from major development investment. "If you can't sell your house and you can't move, what are your choices? You can't just sit there and freeze to death; that's inhumane." She notes that enabling the low-income elderly, for example, to stay in their homes probably saves the public more in terms of not paying for nursing-home care than the potential savings in shut-off services if enough of them move out.
And so, Dennison-Budak reacts strongly to comments like the one Hunter Morrison, director of the urban and regional studies program at Youngstown State University and a prime mover in the city's planning process, made to Governing: "What we're saying in Youngstown is, the past is the past. It's time to turn granny's picture to the wall." To her, this implies that the homes, community ties, and general welfare of the people remaining in depopulated neighborhoods should take a back seat to the goal of saving money on city services. "The idea of 'turning Granny's picture to the wall' is pretty abhorrent," she sputters. "You can't [revitalize the city] over the bodies of people who thought they were doing their part." (Mayor Williams, whom Dennsion-Budak supports, has, in fact, explicitly promised to continue services to all occupied areas.)
In some ways, the legacy of urban renewal leaves the residents of America's shrinking neighborhoods better defended against wholesale disruption than Europe's, says Pallagst. "In [the former] East Germany, for example, they don't have a [community-development] lobby. When cities say 'We have to shut down this housing block, people don't protest, they just move.' "
Nonetheless, the shrinking cities conversation must eventually address the question of relocation. "If you're going to take things off line, you're going to have to move some people who are isolated on some blocks," says Burnett.
But it's a difficult discussion to have, especially in the aftermath of the 2005 U.S. Supreme Court ruling in Kelo v. New London, allowing the principle of eminent domain to be applied to the taking of residential property for private development. Since Kelo, anti-eminent domain sentiment around the country has spurred legislation restricting the taking of property to combat blight. Youngstown plans to keep relocation voluntary, hoping to offer people in depopulated areas who would have qualified for home-rehab assistance the same grant for a house in a better neighborhood. "We've always shied away from saying 'eminent domain.' We never believed in having it come to that," says Kobak. "There's always negotiating a better opportunity, there's always waiting people out."
Of course negotiating and waiting can take a long time, while costs to service these areas mount. Burnett thinks the model of "responsible relocation" being developed by the Annie E. Casey Foundation for helping households displaced by redevelopment projects could be relevant to shrinking cities, if expensive. Casey's program involves a wide array of financial and social supports to ensure that relocated families end up in better housing situations than they started in.
The Balancing Act
Are there ways to reap the benefits of right-sizing without hurting a city's most vulnerable populations? In theory, yes, but as Schilling says, no one has really done it yet. Nevertheless, researchers and planners are starting to sketch the outlines of what it might look like.
"The community and owners need to be involved," says Schilling. Yet having a true community-planning process is often easier said than done. "You have to ask, and then you have to listen," says Dennison-Budak, "and those two things in that particular sequence are rarer than they should be."
To protect the most vulnerable, there would be a threshold of city services and housing assistance for all areas, even those not chosen for new investment. "You say 'We're going to provide a basic level of services citywide, but in core areas we're going to increase the level of investment,' " says Schwarz.
Second, the areas that are targeted for investment should include sufficient new affordable-housing development to absorb existing demand and that of people who might be ready to move in from other areas. In fact, Schwarz emphasizes that a commitment to creating affordable housing has to be part of the deal of accepting targeted investment. Relocation assistance should be provided to those who want it. "You've got to be able to offer people something better than the status quo," says Schilling.
Some people are also talking about models that don't aim to empty depopulated areas, but rather try to increase the value and quality of life without draining precious investment resources from other areas of the city.
Schwarz, for example, suggests an aggressive side-lot program. Many cities will give a vacant lot to a neighboring property owner for a side yard, on condition that the owner maintains it. But many of these programs have a restriction of one lot per property owner. What if, says Schwarz, you gave one owner several lots? Even in a distressed area, a half-acre or an acre of property can be a meaningful asset, increasing property values and the financial position of remaining owners. Larger lots might even attract new residents who are interested in the unusual idea of semi-rural living right next to a city downtown. "If we grab [the interest of] 2 percent, or heck one-half percent [of buyers], suddenly we've created market demand in an area that doesn't have any," says Schwarz.
Schwarz also recommends taking a lighter hand with zoning and regulation in areas that have become very low density, to allow a more "organic" mix of uses. Residential zoning usually prohibits most commercial uses, especially those likely to be noxious to their neighbors. But in a mostly empty neighborhood, if a property owner opens a car repair shop that is a block away from its nearest residential neighbor, who is it hurting, asks Schwarz. Why not replace strict zoning with a policy of "show us how you would use this land without creating a nuisance, and we'll take it back if it becomes a nuisance," she suggests. This means people could become more entrepreneurial about what they do with their land, which would also increase its value.
Schilling presents another possible scenario, in which small village-like clusters of housing are developed for remaining residents in the neighborhood, allowing them to retain, and even strengthen, their local networks, while letting the city deliver services more effectively and package land into larger contiguous green spaces.
Talk of clustering and semi-rural densities, and especially talk of decommissioning streets, makes some urban advocates nervous that the premise of not engaging in large-scale redevelopment of these areas might give way to the allure of suburban-style housing developments. "CDCs and private developers [have been] chasing the suburban housing market, thinking the only way to lure them back downtown is to build suburban style," says Schilling. One example is the Church Square development in Cleveland, which Schwarz describes as "a suburban-style shopping center with some very large suburban-style houses built nearby." Kobak veers into this realm when he talks about the potential for "bigger private driveways" in areas with fewer streets.
But chasing suburban growth smacks more of urban renewal and the "growth at all costs" mindset than the "proud to be a small city" places like Youngstown are trying to adopt. Taking out streets reduces the accessibility of neighborhoods for existing residents, and adding suburban housing doesn't necessarily result in less costly services. In cities with very tiny lots, downzoning can make sense, says Burnett, but in cities that already have larger lots, you do run the risk of compromising the urban fabric. And, of course, there's the question of whether the market is really there.
And after all, the whole point and promise of the right-sizing and regreening movement, as Kildee says, is that "It doesn't make a lot of sense for us to require growth for us to consider our community successful." It's a hard assessment to make, and once made, the real work begins. But with careful attention to the needs and rights of the residents of the weakest market areas, the result just might be cities that are both healthy and humane.
"There's real promise in shrinking cities," says Schwarz. "It drives me crazy when people get all depressed about the decline, because there's lots of opportunities too."
Copyright 2007
Miriam Axel-Lute is a freelance writer and editor and proud resident of the modestly shrinking city of Albany, N.Y. Her Web site is www.mjoy.org.
--------------------------------------------------------------------------------
Resources
Shrinking Cities International
www.nhi.org/go/shrinking
The Shrinking Cities Group
University of California at Berkeley
Institute of Urban and Regional Development
www.nhi.org/go/berkeley
Urban Design Center of Northeastern Ohio: Kent State University
www.nhi.org/go/kent
Youngstown 2010
www.nhi.org/go/youngstown
National Vacant Properties Campaign
www.nhi.org/go/vacant
Building a Better Urban Future: New Directions for Housing Policies in Weak Market Cities.
www.nhi.org/go/urbanfuture
Bringing Buildings Back: From Abandoned Properties to Community Assets.
www.nhi.org/go/bringingbuildings
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Back to Summer 2007 index. |
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Sun Oct 14, 2012 4:11 pm |
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untanglingwebs
El Supremo
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"
No community developer likes to be told that the housing she just built was "not doing anybody a favor." But that's what Jay Williams, the young, incredibly popular mayor of Youngstown, Ohio, said to Governing magazine last fall about much of the low-income tax-credit housing built in his city over the past decade. "
I have spoken to residents in all areas of the city that just want to leave Flint and can't because their homes have lost so much value. Another of my posts pointed out that homes in University Park and Woodcroft off Miller Rd have homes selling for half of what they sold for three years ago
"The housing market is weak enough that Youngstown's chief planner, Anthony Kobak, notes that many in the city have said building a new house just produces an abandoned building elsewhere in the city. New housing scattered in some of the emptiest areas, sometimes between two abandoned buildings, is the kind of development that drew Williams' disparaging remark.
"
Same thing will happen here. Of the 35 homes built in Smith Village, only 11 have prchase agreements. One homeowner backed out and bought in another community after the home they were to purchase was vandalized by metal thiefs. Someof the purchasers are not first time homebuyers and own homes in other areas- homes that may be difficult to sell.
Crime is only one reason that residents want to leave. Many cite water bills that are too high and excessive special assessments.
While crime is not the only reason, it is often an important reason. I recently spoke to residents in a once stable neighborhood between Corunna and miller Roads. They have lost neighbors, some who just abandoned their homes, because of repeated breakins. Brazen thieves pretend to be new owners and strip homes of appliances, furnaces and more. One realtor told me he was suspicious of a particular investor, because every home they were shown was vandalized within days. |
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Sun Oct 14, 2012 4:29 pm |
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untanglingwebs
El Supremo
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Even if you are right about a neighborhood's viability, there's still the question of creating humane policies for the people who've stayed put. Jennie Dennison-Budak, the director of Interfaith Home Maintenance Service in Youngstown, understands wanting to direct new construction and major rehab dollars for the most impact. "It's hard to justify putting $50,000 into a $20,000 house that's the only house on the street," she says.
Interfaith provides emergency or necessary home repairs, such as installing a new furnace or fixing a water main break, to low-income owners on an as-needed basis. Dennison-Budak sees this as a very different question from major development investment. "If you can't sell your house and you can't move, what are your choices? You can't just sit there and freeze to death; that's inhumane." She notes that enabling the low-income elderly, for example, to stay in their homes probably saves the public more in terms of not paying for nursing-home care than the potential savings in shut-off services if enough of them move out.
When Smith Village initially began rehabbing houses in this area, the effects of years of neglect on many of these homes was not considered. The government increased the $35,000 rehab limit to $55,000 in order to allow foe siding, windows and other amenities that would not make the homes stand out in contract to the newer homes. Instead, the rehab bills sometimes exceeded $100,000 as the nonprofit involved sometimes did not properly evaluate homes and procedded with repairs despite not having authorization from the city.
There was shoddy construction as well as contracts that failed to follow HUD rules as to eligibility, insurance, and taxes, There were instances that gave the appearance of outright fraud. Without an administration that has qualified monitor and inspectors to enforce the rules, there will always be issues. HUD has recently cited faulty rehab practices.
With the emphasis on Smith Village and downtown, the current administration has not focused on the humanitarian issues of seniors and others who live in older housing. many of these homeowners could be helped with weatherp[roofing, roof repairs, etc. Council moved to put in place orinances to help residents with problems of an aging water and sewer infrastructure. This administration ignores the ordinances. In Fairfield a senior was told the city caused the damage to their water line and then the city wanted thousand of dollars to repait the damage they caused. |
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Sun Oct 14, 2012 4:53 pm |
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untanglingwebs
El Supremo
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"Schilling presents another possible scenario, in which small village-like clusters of housing are developed for remaining residents in the neighborhood, allowing them to retain, and even strengthen, their local networks, while letting the city deliver services more effectively and package land into larger contiguous green spaces. "
I believe this is some of the concept the North- East CDC wanted to develop. For some reason, the city has abolished this and other CDC's.
The Village concept did not succeed in the Beecher area as most of the property and assets were lost to the LAND BANK. |
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Sun Oct 14, 2012 4:57 pm |
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untanglingwebs
El Supremo
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"But chasing suburban growth smacks more of urban renewal and the "growth at all costs" mindset than the "proud to be a small city" places like Youngstown are trying to adopt. Taking out streets reduces the accessibility of neighborhoods for existing residents, and adding suburban housing doesn't necessarily result in less costly services. In cities with very tiny lots, downzoning can make sense, says Burnett, but in cities that already have larger lots, you do run the risk of compromising the urban fabric. And, of course, there's the question of whether the market is really there.
And after all, the whole point and promise of the right-sizing and regreening movement, as Kildee says, is that "It doesn't make a lot of sense for us to require growth for us to consider our community successful." It's a hard assessment to make, and once made, the real work begins. But with careful attention to the needs and rights of the residents of the weakest market areas, the result just might be cities that are both healthy and humane. "
Kildee said that in 2007. What a difference 5 years makes. Kildee led the development of downtown with the Land Bank building, the Berridge Horel and the Durant Hotel.
Walling has touted some survey as his authority that 500 new homes are needed in downtown Flint. Make that survey public. Explain who will occupy these homes. Explain who wil be willing to pay market value in a community with extremely weak housing markets.
Explain how the safety of these new residents can be protected. Mary Street was the nothern border of the Renaissance Zone and is an integral part of Smith Village. Two murders in two weeks on this street does not inspire confidence. Flint Police Operations has reported large fights and other crimes in this vivinity where the new homes are being constructed.
Several attempt have been made to market these homes. How much has been spent and how much of the budget is remaining?
How legit are the contracts and are the new potential homeowners being protected from reverse redlining? I have heard from University Park that some homeowners were hard hit with mortgages having double-digit interest rates. They were able to pay until the Renaissance Zone ended and when council refused to help extend the zone for University Park more foreclosures ensued. Several downtown buildings received the Renaissance Zone extension. |
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Sun Oct 14, 2012 5:17 pm |
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untanglingwebs
El Supremo
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Join them on Facebook. kent County wants to eliminate their Land bank.
Kent County Taxpayers Alliance
Organization
We are dedicated to ensuring local government organizations in and associated with Kent County, MI are transparent, accountable, and efficient. www.kentcountytaxpayers.org Follow us on Twitter: @KentTaxpayers
About
] |
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Sun Oct 14, 2012 5:42 pm |
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untanglingwebs
El Supremo
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The Land Bank Board is controlled by the Genesee County Board of Commissioners.
Taxpayers Alliance says Kent County Land Bank purchases are 'crony government gone wild'
Published: Thursday, August 02, 2012, 11:45 AM Updated: Thursday, August 02, 2012, 4:39 PM
By Jim Harger | jharger@mlive.com
UPDATE: Kent County treasurer defends land bank, accuses Taxpayers Alliance of 'misinformation'
GRAND RAPIDS, MI – The Kent County Taxpayers Alliance said today the Kent County Land Bank’s recent purchase of tax-reverted properties is “crony government gone wild.”
The group, which previously has campaigned against public transit millages, said it will launch a new campaign aimed at stopping the Kent County Board of Commissioners from allowing the land bank to acquire tax-reverted property before it goes to auction.
“This newest front represents their attempt to bring more sunshine on the new practices of this unaccountable government authority that is distorting local real estate markets,” the Alliance said in a news release.
The Kent County Land Bank is purchasing 40 tax reverted properties this summer by paying their past-due tax bills. The county board approved the purchases on a 15-4 vote last month.
Land bank officials said the purchases were made to stabilize neighborhood property values and spur redevelopment activities.
Some of the purchases were made to generate working capital for the land bank, which draws no county funding.
In one case, the land bank scooped up an Alpine Township home for its outstanding tax bill of $10,440. The suburban home, valued at more than $150,000, made the tax auction list because the bank that assumed ownership failed to pay the tax bill on time.
In another case, the land bank is purchasing an abandoned West Side gas station to facilitate the construction of a new Rylee’s Ace Hardware store.
Critics of the land bank accused the organization of “cherry-picking” key properties that would have fetched more money for the county had they gone to the county’s tax reversion auction later this month.
“The actions of the Board of Commissioners in their collusion with the land bank shows a complete disregard by the majority of county commissioners of their fiduciary responsibility towards Kent County,” said Alliance co-founder Eric Larson.
“At a time that the county is contemplating cutting sheriff deputies and other services it is leaving hundreds of thousands of dollars if not millions on the table which is revenue that it will need to make up either in higher taxes or cutting services.
“This Board action was reckless and shows that most of the commissioners are more comfortable giving property away for a steal to central planners than allowing the market of private investors at an auction to operate as it has for years.”
Larson acknowledged the county board was acting within the state law that created land banks. But he said the county’s actions went beyond the intent of the land bank.
“The whole point of the Land Bank is to be the buyer of last resort for properties that no one wants at the minimum bid,” Larson said. “The ‘impossible to sell’ properties they purchased included a farm home on the bike path in Byron Center, a beautiful residential property in Alpine Township and numerous other properties that were about as dilapidated as the new Children’s Hospital.
“This is exactly the type of crony government action that KCTA has been fighting since our inception. We have an unaccountable board running the Land Bank with the ability to circumvent the normal auction process and purchase property before private entrepreneurs or current homeowners can - all at a massive financial loss to the taxpayers.”
Larson said his group is not planning to attempt a change in the state law nor would it endorse political candidates who agree with their position. Instead, the group plans to begin a social media campaign and radio campaign to explain the “reckless actions” of the county board.
Kent County Land Bank officials said they were preparing a response to the Alliance’s news release. |
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Sun Oct 14, 2012 5:54 pm |
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untanglingwebs
El Supremo
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Genesee County also blocks sales in certain areas because the "land is being held for future development." Does this eally mena "back room" deals have been cut to allow crony organizations to have preferntal treatment. And while this land is being held for future development, who is paying the tab for the mowing, trash removal and boarding up of these properties.
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A news service for the people of Michigan from the Mackinac Center for Public Policy
County Blocks Private Citizens From Purchasing Home; Buys The Property Itself
Sale proceeds could be used to fund Kent County Land Bank Authority's operations
By Tom Gantert | Sept. 25, 2012 | Follow Tom Gantert on Twitter
5076 Montauk Drive, in Alpine Township. The property was acquired by the Kent County Land Bank for $10,448.28. Photo by Rusty Richter.
The Kent County government blocked private citizens who had interest in buying an abandoned house and purchased the property itself so the county could then re-sell it for an estimated $100,000 profit.
And a county official said it was all legal.
The house in Alpine Township was designated as "blighted" and before it was offered to realtors or others who might have been interested in the property, the Kent County Land Bank Authority acquired it for $10,448.28.
"It is true that from the outside, this house looks to be in good shape," said Kent County Treasurer Ken Parrish, who also serves as chair of the land bank authority. "However, the interior required a significant amount of work to be done. More importantly, blight can be viewed in many different ways. Certainly buildings that are falling down can be viewed as blight. But so can properties that for other reasons drive down the value of properties around it, such as abandoned property as this one was."
Parrish said the county will invest tens of thousands of dollars in improvements in the house and then re-sell the property.
"It should serve as a sales comparable that will support increases in value of all of the neighborhood," Parrish said in an email. "That's good for the neighborhood, and also good for the county, as increased property values lead to increases in tax revenue."
But comments published on a news website by what was reported as "land bank staff" suggest that the county was interested in turning a profit on the property to help fund its own operations.
That raises questions about how fair it was for the county to take the property off the auction block where private citizens could have bid on it.
Realtor Rusty Richter said he was interested in buying the property at the auction and does not believe the property is blighted.
But Parrish said the law provides the county the right to take properties off the auction block — and buy the property itself
.
"[A]ll the statutes were followed," Parrish said.
According to an MLive story, the land bank staff comments on 5076 Montauk Drive NE were: "Staff comments: Nice Home-Big mistake by City Financial. Revenue from this project will go a long way to help fund the Land Bank."
County records show that $10,440 was owed in taxes. The property's development cost was set at $57,267 and the county estimated it could make $97,733 profit on the sale.
"We all want vacant property to be purchased and rehabbed," said Audrey Spalding, a land bank expert who works at the Mackinac Center for Public Policy. "Realtors say that buyers were lined up for that house. And yet, the Kent County Land Bank got in the way. The land bank's listed reason for acquiring 5076 Montauk was to acquire funding for itself
.
"The concern should be getting vacant property back into productive use, not funding a new government land bank."
~~~~~
See also:
Land Bank Powers Abused, Costly to Taxpayers
Kent County Taxpayers Question Land Bank
Analysis: Genesee County Land Bank Threatens Private Property Rights
Land Bank Loans Often Losers
Land Banking: An Old Idea With A Poor Track Record |
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Sun Oct 14, 2012 6:05 pm |
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