Slow pace of renovations hurts house-selling program

URBAN CHRONICLE

October 19, 2006|By ERIC SIEGEL

Ayear and a half after Mayor Martin O'Malley announced his ambitious plan to take control of 5,000 abandoned properties, Baltimore began a smaller, more focused program to sell vacant city-owned properties through private real estate brokers.

Project SCOPE (for Selling City-Owned Properties Efficiently) has just completed its third year -- and a new report gives mixed marks to selling individual properties in marginal or improving neighborhoods rather than large groupings of buildings in more distressed communities.

"Project SCOPE is helping to spur investments in a small portion of the city's housing stock," says the report by Josef Nathanson of Baltimore-based Urban Information Associates Inc. "These investments are leading to significant improvements in individual blocks and raise the potential for transforming some larger neighborhoods."

But the report goes on to say, "The effects of Project SCOPE are by no means uniformly positive. Some buyers have not met their obligation to complete the necessary renovations within the program's required 18-month time-frame."

The report, which covers a period through the end of last year, says the city has netted over $1 million a year from the sale of the properties and estimates that current property tax receipts of over $50,000 will increase fivefold by 2010. It also notes that more than eight out of 10 buyers were investors, and that six out of 10 came from the city and its suburbs.

Last week, David B. Rudow -- vice president of the nonprofit Baltimore Economy and Efficiency Foundation, which pushed for SCOPE along with the Greater Baltimore Board of Realtors and commissioned the study on its impact -- provided some updated figures on the program.

As of the beginning of the month, 139 properties had been sold for $4.1 million and another three dozen were under contract, Rudow said. Rehab costs on them were estimated to be $24 million, he said.

Only 20 of those, however, had received occupancy permits, Rudow said.

"It's 20 more than we would have had otherwise," he said, adding, "The program has been picking up momentum as it goes along."

Of those 20 occupancy permits, 14 are for properties in Reservoir Hill. Still, that represents less than half the properties that have been sold through SCOPE in the neighborhood.

Sara West, housing coordinator for the Reservoir Hill Improvement Council, said the slow pace of renovations has been the major problem with the program.

"Our main concern is that people buying SCOPE properties are not rehabbing them in a timely fashion," she said. "A lot of owners waited a year to get their first permit. It doesn't make any difference when you live next door who owns it. When the property owner doesn't rehab them, it's not any better."

Michael Bainum, assistant city housing commissioner for land resources, counters that the city is on top of the situation, tracking work permits and taking administrative and legal action when necessary. Of the 17 SCOPE properties in Reservoir Hill where work hasn't been completed, only five are beyond the deadline. Four have been referred to the department's code enforcement legal section, and two are under court-mandated schedules to finish the work, he said.

Two of the delinquent properties are on Newington Avenue, which runs through the heart of the neighborhood just south of Druid Hill Park.

In all, nine of the three-story rowhouses on the street have been sold through the SCOPE program, more than any other in the neighborhood, but only a couple have people living in them. A couple more are under construction, and a couple of others have prominent "for sale" signs in the windows.

Of the other houses on the street, many have been subdivided into apartments. One vacant building has a notice posted from the city, threatening to appoint a receiver to rehab the property or turn it over to someone who will; two other vacant properties are scheduled for a private auction at the end of the month.

One of the properties, at 917 Newington Ave., was featured in the Urban Information Associates report, along with the replica of an ad for a May open house. The asking price for the property, then and now: $375,000.

Mark Simone, the real estate agent handling the sale, said one of the problems in finding a buyer was the "drug activity" on the street, which migrated from other blocks undergoing renovation. "It doesn't help when you go to show the property and there are guys on the steps of the house and guys on the corner," he said.

On one recent morning, no dealers were in sight, though one resident who declined to give her name complained about the drug traffic.

What was visible was garbage -- a pile of green plastic bags at one end of the street and a pile of discarded food wrappers, soda bottles and other debris heaped under a "No Dumping" sign in the middle of the block.

Lolitta Flores, visiting from out of town, was sweeping the sidewalk in front of a subdivided home owned by her cousin on the block. Surveying the street, she suggested that the city plant more trees as well as pick up the trash.

"Who's going to spend these kind of prices for a house when the street looks like this?" she asked.

Footnote: The city will hold an open house from 10 a.m. to 1 p.m. Saturday for 25 vacant properties in the Station North Arts & Entertainment district that are being newly offered for sale through the SCOPE program. Registration begins at 8 a.m. at Area 405 Gallery, 405 E. Oliver St. More information is available at www.baltimorehousing.org.

eric.siegel@baltsun.com

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