Ending the vacancy

Dixon's land bank plan alone unlikely to work

core problem is supply and demand

March 13, 2009|By Eric Siegel

The proposal to set up a Land Bank Authority for Baltimore may well, as Mayor Sheila Dixon's administration contends, streamline the sale of vacant city-owned property. But it is unlikely that the mere creation of the entity would substantially reduce Baltimore's backlog of abandoned houses and empty lots.

That's because the fundamental reasons there continue to be so many vacant properties in the city - about 30,000, a third of them city-owned - are economic, not bureaucratic. Indeed, the very existence of vacant properties can be traced to the most basic of economic principles: supply and demand.

As the city's population shrank from its peak of nearly 950,000 in 1950 to around 640,000 today, there was a diminished demand for the housing stock, much of which was old and run-down. And while thousands of these excess housing units were demolished over the years, those that remain have had to compete for owners and renters with new developments ranging from the conversion of old industrial waterfront properties such as Tindeco Wharf and Silo Point to new, mixed-income communities such as Heritage Crossing and Townes at the Terraces.

What's more, many of the remaining vacant houses and lots are in neighborhoods where property values are less than the cost of renovating a shell or building a new house. In fact, in the first half of last year, the median home sale price in 26 city neighborhoods was less than $70,000, according to the Web site of Live Baltimore, the nonprofit that promotes city living. They include such blight-plagued communities as Broadway East, Harlem Park, Milton-Montford and Penn North. Substantial rehabilitation of the properties in those neighborhoods is difficult if not impossible without public or private subsidies.

It is because of these economic factors, and not red tape, that a succession of city programs - even dollar houses that transformed certain neighborhoods - has done little in the long run to deplete the inventory of vacant properties. Given the same economic dynamics, it is difficult to see how a nonprofit agency devoted solely to taking control of current and future city-owned abandoned lots and homes and returning them to productive use would fare much differently.

In fact, in the handful of jurisdictions that have land banks, blight is seemingly as much a fact of life as it is in Baltimore. For example, St. Louis was the first jurisdiction to start a land bank, back in 1971. Yet more than three decades later, the Land Reutilization Authority in that city, which has just over half the population of Baltimore, reported that it held 9,851 abandoned properties. During the last fiscal year, the authority sold 258 blighted properties - and took title to 346, according to the Web site of the city's development agency, which oversees the land bank.

If a land bank won't rid the city of its vacant properties, what else needs to be done? Three ideas come to mind.

First, the city needs to amass a substantial war chest of private and public funds to ensure the quality renovation of vacant properties or their demolition and conversion into attractive parks and open space (no small feat in these extremely trying economic times).

Second, in areas where there is interest in renovating vacant properties, the city must step up its code enforcement of surrounding properties, occupied and abandoned. This means not just issuing citations and fines but providing loans and grants to landlords and homeowners to upgrade their properties.

Third, the city needs to accelerate the incremental progress it has made in reducing crime, improving schools and cleaning the streets and alleys.

In the end, the best way to reduce the number of vacant properties is to increase the demand for them. And the best way to do that is to increase the desirability of neighborhoods where vacant properties exist, regardless of what kind of entity oversees them.

Eric Siegel, a former reporter for The Baltimore Sun, is journalist-in-residence at the Johns Hopkins Institute for Policy Studies. His e-mail is ecsieg@aol.com.

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