Rebuilding Place in the Urban Space

"A community’s physical form, rather than its land uses, is its most intrinsic and enduring characteristic." [Katz, EPA] This blog focuses on place and placemaking and all that makes it work--historic preservation, urban design, transportation, asset-based community development, arts & cultural development, commercial district revitalization, tourism & destination development, and quality of life advocacy--along with doses of civic engagement and good governance watchdogging.

Monday, May 11, 2015

Demolition vs. Preservation as a neighborhood revitalization strategy: Baltimore, Muncie, Indiana, etc.

A couple weeks ago, national Washington Post columnist Eugene Robinson suggested in "Tear down Baltimore's abandoned buildings to help rebuild," that Baltimore needs to get its demolition on.  He made this point out of the belief that "blighted" properties are pernicious visually and have a negative impact on neighborhood and personal perception.

The problem with this belief is that an empty lot produced in the place of the disinvested building is an equivalent form of blight and equally uncorrectable, as pointed out by the Springfield (IL) State Journal-Register in "City demolition efforts continue, but vacant lots slow to fill in."

Vacant properties in Central Baltimore.  The Sandtown-Winchester neighborhood is on the left side of this graphic.

Baltimore is a weak market, but with strong market opportunities.  While Baltimore is quite impoverished, it does have the opportunity to attract new residents, because of its location on the East Coast, being served by the Northeast Corridor Amtrak line, and close enough and with significantly cheaper but historic housing, to serve as a bedroom community for DC.

And areas marked by a high degree of vacancies are centrally located.

I was going to write a letter in response to the Robinson column, but Michael Allen of the Preservation Research Office in St. Louis, beat me to it.  In "Bulldozers aren't the only answer" he wrote:
As I read Eugene Robinson’s May 1 op-ed column, “Ghosts that haunt Charm City,” I found myself both nodding and shaking my head with equal vigor. I know all too well that abandoned buildings can drag down the look of a city written off for its many problems. 
Once upon a time, St. Louisans looked to demolishing abandoned buildings to resolve social problems and improve appearances. The results, however, diminished the city: fewer buildings, fewer people, less tax revenue, degraded land values. In 1998, Missouri created a state historic tax credit, and ever since St. Louis has been finding that rehabilitation creates wealth in communities that assumed they had hit bottom. 
St. Louis has a smaller population than Baltimore, none of the proximity to other major cities and far lower demand for real estate. Yet we harnessed the economic power of what seemed like a dead weight: vacant buildings. 
Mr. Robinson might want to rethink his thesis to at least admit that rehabilitation is as viable a solution as demolition — and one with greater economic returns. Not everything can be saved, but not everything should be bulldozed either. 
But this shouldn't be news.  For example, see "Eyesore to Community Asset: Historic preservation creates affordable housing and livable neighborhoods" from Shelterforce.

Costs associated with vacant properties don't go away when you tear down a building.  Demolishing a building just creates a vacant lot.  So demolition ends up being an incomplete "solution."  Just like vacant buildings, vacant lots contribute to increased costs to cities and counties.

According to a GAO study, vacant properties have a negative impact on immediate properties of close to 10%, while a study in Pittsburgh attributes an overall decrease in city property value ("Costs of blight," Pittsburgh Quarterly).

Vacant lots can be loci for trash and illegal dumping.  Image: (Maryland) Daily Record.

The Chicago Tribune reported ("Crime in Chicago's vacant property soars 48% since 2005") that crime increases in Chicago neighborhoods with a significant number of vacant lots and buildings.

Similarly, a Government Finance Review article reports in a significant increase in emergency services expenditures associated with vacant buildings and lots.

Certainly in those cities that have the opportunity to attract new residents, demolition is an ill-considered strategy that seemingly makes sense in the short term, but has long term negative consequences.

The language of revitalization.  As an aside, it's important to remember the importance of language and message.  A so-called blighted building is the result of disinvestment.  The solution to blight isn't "demolition," but reinvestment in the property.

Market economics makes rehabbing disinvested properties expensive and sometimes uneconomic in the short and intermediate run.  In weak real estate markets, the high cost of renovating a building that has been disinvested in for decades often means that the cost of the renovations isn't immediately recouped by increased property value--except, perhaps over a many decade period (e.g., for example it took 30+ years for many DC neighborhoods to get to the point where they were 5-10 years ago, let alone, the market of today).  So at the scale of an individual property owner, it seems to make economic sense to demolish rather than to repair or rehabilitate.

In weak real estate markets, the value of stable neighborhoods is less captured by individual property owners and is more a function of the whole, as a public good, as opposed to the way the property normally works, at the lot by lot scale.

To stabilize improve neighborhoods,local governments are justified in making extra-normal public investments in such places, including a variety of tactics including tax credits, providing properties for no cost, technical assistance, grants, and other financial inducements.

The Muncie illustration.  In preparation for a forthcoming blog entry, I was reading the book Resilient Downtowns, by Michael Burayidi and in touting historic preservation as a neighborhood revitalization and resident recruitment strategy, one of the examples it gave was from Muncie, Indiana.

The city had intended to demolish a number of "blighted properties," but push back from historic preservation and neighborhood activists led the city to change its direction, and instead, money earmarked for demolition was shifted towards funding renovation.

The book highlighted the renovation of a property at 911 E. Jackson Street, but didn't include photos.

I looked up the building online, using Google Street View from the present and the past, and I was astounded at the transformation, and the visible proof that investment is the far better response to disinvestment, rather than demolition.

Of course, across the county, there are thousands and thousands of such examples which illustrate the benefits of making the choice to renovate rather than demolish.

The building on the right is 911 E. Jackson Street, Muncie, Indiana, before rehabilitation (2007)
house before

911 E. Jackson Street, Muncie, Indiana, after rehabilitation (2014)
house after

The building had been vacant for more than 25 years, and a few years before the city ordered the building's demolition, it had been purchased by a graduate of the Ball State University architecture school in Muncie, with the intention of renovating the property.  But given the high cost of renovation and the difficulties raising funds, the owner had not yet begun the project.

According to "HUD Grant to Turn Threatened Indiana House into affordable housing," from Preservation Magazine, the final cost was about $300,000.  HUD community development funds paid about 80% of the total.

You can argue that demolition would have been cheaper, and it would have in terms of initial cost, but over time, the reinvestment in the neighborhood will pay off--especially compared to the opportunity costs of a vacant lot not likely to be redeveloped any time soon.

Clearly, the house next door (on the left in the image), was renovated as well, although I don't know the genesis of that project.  Generally, improvements in one property help to spark private investment by others--the argument made in Building Neighborhood Confidence by Goetze.

Note that Baltimore has many excellent neighborhood revitalization programs, including the Live Baltimore residential recruitment program, while the Healthy Neighborhoods program focuses on strengthening late emerging and transitioning neighborhoods (see "Systematic neighborhood engagement").

Parks and urban farms as an alternative vacant lot absorption strategy.  While touted in many quarters, I am not a fan of adaptive reuse of vacant properties for farms and parks, except in selective situations where a neighborhood lacks such spaces.

Image above from "Extreme Green Makeovers for Vacant Lots," Public News Service.

Generally, an occupied house, with residents paying income, sales, and property taxes, and committed to living in and maintaining a viable neighborhood, is the highest and best use for such properties.

But in weak markets, it can be a way to landbank properties and as a lower cost maintenance strategy.

-- Vacant Lot Handbook: A Guide to Reusing, Reinventing and Adding Value to Milwaukee’s
City-owned Vacant Lots
, City of Milwaukee
-- Greening Vacanant Lots: Planning and Implementation Strategies, Nature Conservancy
-- Green Pattern Book: Using Vacant Land to Create Greener NeighborhoodsCity of Baltimore Growing Green Initiative
-- Cutting Through The Red Tape: How Baltimore's Vacant Lot Programs Have Made it Easier For Communities To Revitalize The Underutilized And Blighted Spaces In Their Neighborhoods, MIT

The best alternative to demolition: rehabilitation of vacant properties as a community and jobs development program.

But I would argue that Baltimore needs to go beyond the programs they have, as various neighborhoods remain in persistent poverty.

I recommend a two pronged program for distressed and emerging neighborhoods.  Instead of focusing on property demolition and tearing holes in blocks and neighborhoods which further destabilizes rather than improves communities, instead (1) focus on rehabilitating and getting houses occupied, (2) through a skills and workforce development and training program.

Model programs include:
  • the HUD-funded Youthbuild program, which teaches construction skills to young adults through classroom and field settings such as affordable housing developments, schools, and community centers;
  • Savannah Landmark Rehabilitation Project -- this 1970s initiative aimed to preserve the ability of lower income households to remain in the Savannah Historic District despite rising housing prices.  It did so by purchasing and rehabilitating 260 units of housing units and keeping them as part of a portfolio of permanently affordable housing;
  • PUSH (People United for Sustainable Housing) Buffalo's energy efficiency and conservation rehabilitation program, which is a community development social enterprise that develops green jobs, while doing energy efficiency upgrades;
  • housing rehabilitation programs for low income and senior residents by affiliates of the nonprofit organization Rebuilding Together
  • the Artist Relocation Program in Paducah, Kentucky targets a different demographic, but is a good model for demonstrating how selling for low cost or providing properties for no cost in return for significant investment into rehabbing disinvested properties can be a good way to recruit new residents to otherwise vacant properties and neighborhoods.  They did this in the city's Lower Town neighborhood. See "Artists to the rescue" from the Evansville Courier and Press and this presentation.
  • The Roots to Re-entry program of the Pennsylvania Horticultural Society trains prison inmates "in gardening and landscape management. This intensive hands-on training focuses on horticultural practices, landscape maintenance, greenhouse operations, carpentry, and masonry skill sets. The training also includes course work in workforce literacy, job readiness, health education, and occupational therapy. Upon completion, program participants will receive post release support from PHS and its partners including job placement helping inmates make the transition to life outside the prison walls."

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9 Comments:

At 8:21 AM, Anonymous charlie said...

offtopic, may be of interest:

http://www.nytimes.com/2015/05/12/business/dealbook/cushman-wakefield-exor-dtz.html

(DTZ americas was based in DC)


 
At 12:27 PM, Anonymous Richard Layman said...

the bigger get biggest. Does consolidation mean that the sector's profitability is dropping?

 
At 3:19 PM, Anonymous Anonymous said...

No idea. I think the more granular version is TPG wants to take it public. The growth machine becomes less interested in a specific city.

More stuff (all unrelated)

http://www.bloomberg.com/news/articles/2015-05-08/hard-money-comes-easy-as-wall-street-funds-home-flippers


http://www.theregister.co.uk/2015/05/08/smart_ebike/

http://www.ft.com/intl/cms/s/0/d7443714-f404-11e4-99de-00144feab7de.html


It strikes me that a lot of the tear down logic is really about turning sub-standard housing into stuff that people want, and that outside a grant type structure a lot of markets can't support it.

MY sister was looking for a new house, some beautiful renovated ones, they had no interest and wanted a new (less than 6 year) old one.

 
At 6:24 AM, Blogger Richard Layman said...

wrt tear downs. Yes, you're right. The problem is twofold. There isn't demand to build new housing in those neighborhoods in the ordinary market, so a teardown just becomes a vacant lot sitting for decades.

And new housing, by comparison to the old, is anti-city, at least it isn't very distinctive, and it eradicates place qualities.

So it's better to fix it. It's been at least 10 years since I read _Changing Places_ but there is a discussion with Stanley Lowe. He was an African-American activist in PGH advocating demolition and building suburban like housing in the city when he came to realize that suburbanites didn't want to live in the city even if you had suburban like housing, that it was better to focus on maintaining the unique qualities that define the city.

So with your sister... that's what is happening some on the edges of the city, such as Fort Lincoln or the development of the old Methodist Home on New Hampshire Avenue a block or two from the Maryland line.

They are new buildings, with decent enough aesthetic quality--at least the NH Avenue development. To me it's like development in PG, except that it's in the city.

... but this kind of development can come at a cost. I was thinking about this around Fort Totten yesterday, that the city should have developed a detailed master plan that over time with each new development would have created an urban connected place instead of a place with a bunch of new multiunit buildings.

The same opportunity was/is lost around Rhode Island Metro for the most part.

 
At 6:28 AM, Blogger Richard Layman said...

wrt the hard money article and this:

The new lenders are focused on more experienced investors, many of whom have have established companies, rather than the amateurs that proliferated during the housing boom a decade ago. Today’s flippers are more sophisticated after the crash weeded out most of the weaker investors, Lewis said.

I guess when the market is so good that the supply of buyers isn't all that discerning (or inexperienced like I was in my late 20s), you don't have the kind of supplier-side competition that generates more sophisticated and able flippers.

... we are witnessing this across the street. The person paid $410 and did some minimal improvements, leaving a totally wacked basement untouched for the most part, but she wants $550.

I can't see it selling at that price.

The one thing about the new market is that if a house can't appraise for the mortgage it won't sell. The houses that can't appraise are generally "off" in terms of the remodeling and the sales price expectation, with "defects" of various sorts (location, size of lot, needed changes undone, etc.).

 
At 6:32 AM, Blogger Richard Layman said...

the thing about your comment about big money being place-less is absolutely true.

I remember the process of "integrating" H Street into the national real estate market, once the plan was done and the city investment climate became white hot for a time. Marcus & Millichap, a multifaceted RE firm, came in, inventoried every piece of property, every opportunity, and started brokering deals.

Even so, on H Street at least most of the players for the biggest properties are local/regional, even if their companies (e.g., Clark, the company that succeeded the Dreyfus property group) are active in other markets.

There are a couple of exceptions. The firm that bought the Dreyfus apartment project across from Station Place on 2nd and Senate Square (old Children's Museum) on the 200 block of H St, and the development on the 600 block (which long before had been owned by a west coast based REIT).

 
At 6:35 AM, Blogger Richard Layman said...

I have that FT article set aside but I haven't gotten around to it yet. One thing with e-cars is that's where I think the parking valet app would work. You need someone to go around and unplug the cars when it's time, and move them so other cars can get in for juice...

 
At 6:45 AM, Blogger Richard Layman said...

wrt e-bikes, I intend to write an omnibus piece on biking issues since it's Bike Month, but all I have now is an outline.

the e-bike element is exactly this. There is a place "in cities" for e-bikes, but it's a lot more limited than people think. (I guess I am a Luddite.) In the city proper, for seniors, and I suppose in parts of cities like SF or Seattle that have scary as s*** hills.

But I think the killer app for e-bike is longer distance bike commuting of 5 to 15 miles. When I was doing the Balt. County plan, there was an article, actually it might have been after but when I was still reading the Sun every day, about a guy in that area doing a 22 mile e-bike assisted commute.

http://articles.baltimoresun.com/2010-11-28/health/bs-md-electric-bike-commuter-2-20101128_1_electric-bikes-hybrid-bike-electric-bicycle

 
At 8:10 AM, Anonymous charlie said...

RE: London e-cars -- the point is London is building a charging network. Could it eventually work with the e-bikes. Probably better sources than FT on this, but that is what I read!



 

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