Housing council needs reality check

Baltimore: City should increase niche marketing to empty-nesters, culture lovers and young upstarts.

September 09, 2001

IT WILL take more than a committee to wipe out Baltimore City's stockpile of 40,000 vacant homes. Nevertheless, Mayor Martin O'Malley's new Council on City Living could perform a valuable service by injecting some long-overdue realism into the decades-old discussion of this depopulating city's housing woes.

Take home ownership, for example.

It's touted as a cornerstone American value. The federal government encourages it through tax deductions; the city has programs that help with closing costs.

Home ownership can be great for the city if it helps raise values. Unfortunately, many city houses have steadily lost value over the past decades. In fact, unsuccessful home ownership may be among the biggest factors dragging down Baltimore's marginal neighborhoods.

Examples:

Many elderly residents don't have money for roof repairs, painting or other minimum maintenance. Their homes may have been paid off a long time ago but have negligible resale value; the owners are virtual prisoners of their limited circumstances. When their houses start falling apart, whole blocks become unsightly. "Good" renters are the first to flee, because they have plenty of other choices.

This is common in far too many aging rowhouse neighborhoods.

Too many people buy homes without adequate income for payments or upkeep. A review of any day's auction ads suggests most foreclosures take place in neighborhoods that already are on the brink.

The point is that while successful home ownership has traditionally been an instrument for economic upward mobility, a purchase gone bad can be disastrous both to the investor and the neighborhood. Unqualified homeowners do no favors.

The city should do everything in its power to dispel illusions about home ownership. Dreams are one thing, nightmares quite another.

As the mayor's 30-member council starts its work, a number of things are obvious.

Success generates success. Canton's popularity has created such a demand for homeownership and rental housing that the Patterson Park area and parts of Highlandtown are benefiting from a spillover effect.

In Northwest Baltimore, the growth of the Orthodox Jewish community has led to a regeneration of aging neighborhoods. Old houses are being rehabilitated, additions built.

The new Spicer's Run townhouses near Eutaw Street and North Avenue have transformed a troubled corner of Bolton Hill. The questions now are: Will the further expansion go farther west or jump north to Reservoir Hill? Does City Hall have any preference? Will it help or hinder?

These examples work because they meet a fundamental requirement for real estate success -- market demand. The challenge for the mayor's council is to identify other city neighborhoods where untapped markets may exist.

There are some tasty possibilities around town. Now that the baby boomers are rapidly becoming empty-nesters, they may be ready to abandon big suburban homes and consider city living. Not everyone will want the innumerable steps of multi-story townhouses or the limited space of most condominiums.

Perplexingly, though, developers have been slow to exploit that niche, even though a cluster of 3,200-square-foot one-level residences, with two-car garages, sold like hotcakes in Cross Keys four years ago. They have doubled in value since then.

Several new rental complexes now leasing downtown will soon test the strength of the apartment market. They are likely to attract a mixture of upstart professionals and empty-nesters who value proximity to downtown and cultural amenities.

This niche will experience further growth within the next year, when two new rental complexes will open near the State Office Building complex, within a walking distance of the Meyerhoff Symphony Hall.

In the past two decades, City Hall has done a poor job of recognizing the advantage and importance of clearly defined housing niches.

The best illustration of public policy confusion is the city's willingness to give subsidies to new townhouse developments that in price and amenities directly compete with the oversupply of decades-old rowhouses. Every sale of such a heavily subsidized new unit undercuts the rowhouse market in neighborhoods.

The Council on City Living should advise Mayor O'Malley on important questions like these. A more realistic attitude is key if Baltimore hopes to attract more residents to buttress its stagnant tax base.

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