Strategies for Transforming Neighborhoods

Liz Kozub, associate director of national leadership and education at the Flint, Mich.,-based Center for Community Progress, sums it up. "Vacant, abandoned and deteriorated (VAD) properties cause significant harm and negatively impact neighbors, neighborhoods and their quality of life. In many areas across the United States, these properties have significant impacts on property values. VAD properties lead to declines in tax bases affecting local governments’ ability to deliver critical services and to invest in quality of life improvements. Decline in property values also affects equity in oftentimes individuals’ largest asset — their homes. Communities entrenched with vacancy see increases in crime and health disparities and decreases in opportunities for wealth building, leading some neighbors to leave."

Vacant, abandoned, and deteriorated properties have a long history of destabilizing communities.

Vacant, abandoned, and deteriorated properties have a long history of destabilizing communities across the country, often disproportionately hurting already marginalized neighborhoods. The severe economic impact of the pandemic — job loss, businesses driven to bankruptcy, government revenue reduced in a time of greatest need — has the potential to escalate the numbers and widespread impact of VAD properties. REALTOR® Associations, which have a long history of responding to housing and economic crisis, will play a critical role in helping their communities navigate the aftermath of COVID-19.

In 2004, the Richmond Association of REALTORS® (RAR) created an affordable housing nonprofit. In 2016, RAR joined a half dozen Richmond-area community nonprofits to found The Maggie Walker Community Land Trust (MWCLT), a nonprofit that turned abandoned properties into new affordable housing. In Virginia, local government can sell a tax-delinquent property to a nonprofit for $1 plus about $2,500 in court costs. RAR works with a community land trust to address blight, create housing and mitigate gentrification.

"We’ve been into social justice for 20 years," said Laura Lafayette, executive officer at RAR. "We went into neighborhoods that were seeing rapid price appreciation — seeing gentrification and displacement. We got the lots from the city of Richmond and built a brand-new house — [available] to people below 115 percent of mean income. We intentionally seek buyers of color, buyers traditionally marginalized."

MWCLT perpetually owns the lot, while the buyer owns the home on it. Buyers enter an agreement that creates a formula that gives them some profit when they eventually sell, but the land trust also captures half of the profits and owns the lot. That way, the housing remains permanently affordable.

"We’ve taken a vacant/blighted lot, put it on tax rolls and created inclusive wealth-building opportunities," Lafayette said.

Jeisson Apolo Armas is a native of Ecuador who grew up in a low-income household in the United States and attended an Ivy League University where he earned degrees in urban planning and architecture. He found that his income as an architectural designer did not provide enough to realize the American Dream of homeownership. So, at age 24, in a market with skyrocketing prices, he acquired a totally renovated two-bedroom, one-bathroom house through the MWCLT in Chesterfield County, Va.

"Growing up, if the landlord raised the rent $100, it forced us to move. I remember a week without heating, a period with no water — other than a neighbor passing a hose through the window for us," said Armas, noting that the greater Richmond area has five of the 10 counties with the highest eviction rates in the nation. "This made me very, adamantly against landlords. The community land trust model works. It lowers prices, it builds homeownership."

Armas said the program, steered by the RAR and local leaders, also builds roots in the community. He is one of three land trust homeowners on its advisory board and he is volunteering his expertise on Richmond’s city plan to meet goals for the city’s 300th anniversary.

Lafayette said RAR is one of the few REALTOR® associations active in both a land trust and land bank. "Today, we may not know what we want to do with the parcel," she said. "But in three years, maybe the corridor is improving and we now know how to best use it to help the community. We have surplus land and buildings to bring to a deal to leverage a bigger gain for the neighborhood."

In Chesterfield County, a long-abandoned school building and blighted buildings were razed. The land-banked, nearly five-acre parcel, will be developed into an affordable, small neighborhood.

In North Richmond, Bank of America deeded an old branch building to the land bank. It will be renovated and used the way community input determines — possibly a location for multiple nonprofits, a workforce development one-stop or a community center.

Lafayette, who chairs the MWCLT, said land trusts and banks can also be used to promote historic preservation and to mitigate gentrification and displacement. "In historically African American neighborhoods [undergoing huge reinvestment/price increases], if you’ve grown up in that neighborhood, we want to enable you to stay. We want to put a stake in the ground in these neighborhoods and help the families who have been there, 50 years in many cases, to control their destiny."

Proactively looking into the future, because of the decline of retail due to online shopping and the pandemic, Lafayette is looking at ways of reprogramming commercial property.

"Highest and best use is always by dollar or yield," she said of land-use planning. "But we must look at what’s the best use for the community. We are looking at strip malls, especially those with code violations. They already have utilities and parking and are on transit corridors. Strip malls could be the future of affordable housing. Vacant buildings — strip malls, offices, even old churches — can be converted into anchors of affordable housing communities."

Lafayette encourages REALTOR® associations, local governments, nonprofits and business leaders to focus on affordable/attainable housing, better education, better employment — to create inclusive communities where everyone has an opportunity to thrive. She has seen code enforcement used as a tool to uplift communities.

Daniel Cohen is director of the Department of Community Enhancement in Chesterfield County, immediately south of Richmond. The county’s land bank works with RAR to assist low- and moderate-income people reach the goal of homeownership.

Chesterfield enacted ordinances to enable it to declare a property blighted and ask the owner to prepare a plan to fix up the property, or the county can designate a property as blighted and eventually take control of the property. He said the process works best in an area with a healthy real estate market. Cohen acknowledges that areas with a weak or declining market provide few opportunities for converting blighted lots/buildings into opportunities to rebuild the community.

"It is difficult to attract investment to an area if it is maintained poorly," Cohen said. "We try to build relationships with the people and the businesses who are violating the code. We point out the deficiencies first and give people a chance to correct them before we issue a notice of violation. We also have programs to help businesses with addressing violations."

Eric Leabough, director of community revitalization in Henrico County north of Richmond, cited Federal Reserve Bank of Cleveland research that estimates annual direct revenue losses associated with vacant/tax delinquent/foreclosed properties are between $5,000 and $35,000 per property. The cost to the community includes: lost tax revenue due to reduced home values, increased public safety costs and expenses associated with abating code violations.

Henrico developed a database to track and resolve issues with long-term vacant houses. Properties are evaluated and placed on a path for follow up. The paths are acquisition, code enforcement, tax sale and monitoring, if it is code compliant. Code compliant vacant houses are tracked so violations are addressed when they first appear, rather than the properties deteriorating over time. Tax-delinquent vacant properties are tracked so the sale process can begin when they are eligible. The goal is for vacant houses to be reoccupied or, if conditions warrant, demolished in order to revitalize mature neighborhoods.

"Some property owners are elderly and/or disabled or facing a personal hardship or crises in their life. Reasonable extensions of compliance deadlines are frequently offered and usually approved when requested," Leabough said. "Staff are trained to offer volunteer assistance or make a referral to nonprofit agencies that can provide home repairs or other types of assistance. In addition, we operate a volunteer assistance program that assists lower-income elderly persons through yard maintenance."

He said the board of supervisors and county manager created a community revitalization fund that has leveraged additional private dollars to acquire and redevelop properties to improve the housing stock and neighborhoods.

"Our goal is to partner with our nonprofit development community to improve our housing stock and create long-term affordability in these areas. Our fund is capitalized by general fund dollars that are nimbler than the traditional federal resources," Leabough added.

The Akron Cleveland Association of REALTORS® (ACAR) believes cities must enforce policies to insist on the exterior upkeep of all properties in its jurisdiction. ACAR has worked closely with cities to make this happen.

"When a property falls into disrepair, the marketability of the entire neighborhood may be compromised," said Jamie McMillen, AHWD, vice president of government affairs at ACAR.

McMillen said a perfect example of proactive policy was when the city of Akron developed a vacant building registry for commercial properties. In addition to registering a vacant building with the city, the owner would need to submit a plan of action to address the vacancy either through demolition, securing the structure, and/or rehabilitation. ACAR members met with city officials to discuss the details, including fee structures, defining "vacant," — especially in cases of a multi-unit building — when the registry would be triggered, and adding a component of expertise to the appeals board overseeing actions triggered by the new policy.

"Sharing experiences and concerns, the private and public sector worked together to come up with requirements that were acceptable to all parties," said McMillen, noting that REALTORS® do much more for maintaining and uplifting communities than just selling houses. "We hope as the city continues to enforce the policy, impacted neighborhoods will only benefit from all property owners maintaining their properties, whether commercial or residential."

Richard Layman is a Washington, D.C.-based advocacy planner and consultant focusing on commercial district revitalization and sustainable mobility. "A stronger market has more options than a weaker one. In weak markets, a focus on addressing blight is often demolition," he said. "That just converts one problem, a vacant house, to a different problem, a vacant lot. In weak markets, there isn’t enough market demand to resuscitate a vacant lot. So, focus on fixing vacant [houses and buildings] to keep them alive."

Layman said cities must work progressively to protect historic buildings and to enact policies that discourage long-time speculator holding of deteriorating, vacant structures.

"Some cities like D.C. have five times the property tax on vacant properties, although there are loopholes," he noted. "That works to get properties back online because it’s expensive and because the cost of building new instead of demolishing is greater. But in a weak market, such a tax merely leads to demolition."

Layman said the United States, especially in weaker housing markets, needs a nationwide version of Pennsylvania’s Elm Street Program for revitalizing older residential areas bordering Main Streets and central business districts. Its community-based strategic planning process integrates five key stabilization tools: safe, clean and green; neighbors and economy; design; image and identity; and sustainable organization.

Veronica Cardello, government affairs field representative for the Pennsylvania Association of REALTORS®, leads smart growth, urban revitalization and other initiatives in Western Pennsylvania, where loss of industrial jobs and deteriorating housing stock has challenged communities for decades. She has worked with Elm Street and Blueprint Communities, an initiative to revitalize older communities and neighborhoods.

She said weaker markets should create a blight inventory of vacant and abandoned properties and of houses with different levels of deterioration/neglect. Blueprint allows cities to obtain grant funding for revitalization.

New Castle, in Lawrence County Pennsylvania, is located between Pittsburgh and Youngstown, Ohio, in a region hit hard by steel industry job losses, population decreases and stagnating housing values. An Elm Street program was developed for New Castle’s lower east side. The nonprofit Disability Options Network (DON) partnered by targeting blighted properties and either rehabbing them or tearing down and building new.

The unique thing is DON, a center for independent living with dozens of sister organizations focused on improving life for people with disabilities, is retrofitting/building each house to be 100 percent accessible. The sites are scattered within the neighborhood and include not only accessible entrances, showers, kitchens and more — but also access improvements at the street such as improved sidewalks and curb ramps.

We’re trying to create inclusion, not segregation.

"We’re trying to create inclusion, not segregation," said DON Executive Vice President Court Hower, lamenting that most subsidized housing for people with disabilities is in an isolated facility. "We can get a property from the land bank for 100 bucks. We rehab them, make them fully accessible, create homeownership opportunities and make beautiful homes in a community that was deteriorating."

"We spearheaded the community revitalization initiative. Now, we are doing new home builds, designed accessible from the beginning," he said. "Designing accessible from the ground up adds very little cost compared to a non-accessible/conventional house."

Gate Pratt, owner of Limehouse Architects in Charlottesville, Va., said cities should have different approaches for absentee owner speculators vs. properties occupied with financially challenged owners struggling to keep up with maintenance and major repairs.

Local government should step in to enforce maintenance and nuisance laws.

"Local government should step in to enforce maintenance and nuisance laws to make sure that properties are maintained and safe to a minimum community standard. If the owner is non-responsive, or is not compelled to comply, then the municipality should have the maintenance done — with the costs recouped at sale of property," he offered.

"Municipalities should be more proactive regarding absentee-owned abandoned and vacant properties that are being held for speculation, while simultaneously encouraging policies that look to support owner-occupied properties."

Pratt believes cities will survive the pandemic and that COVID-19’s impact on property values could create opportunity by lowering the price of entry into the housing market.

"There is a homeless crisis, a refugee crisis and an employment crisis. Put people to work renovating buildings for their own use, or for use by homeless or refugees," he said. "Abandoned buildings can be managed by nonprofit housing groups that oversee their restoration and provide them to needy recipients. Job skills and trades can be acquired by apprentices, houses can be provided to those who need them and neighborhoods and cities can be revitalized."

Liz Kozub said there is no one-size-fits-all approach to address vacant, abandoned and deteriorated properties. "Successful local government responses to neglect include more than sanctions and fines," Kozub said of code compliance as a progressive tool. "Local governments need to look towards building cross-sector partnerships with others investing in the health and safety of residents and communities."

NAR is helping to cultivate partnerships, like the ones described by Kozub, through its Transforming Neighborhoods program. The program provides REALTORS® with the opportunity to learn alongside their local partners about underlying factors that keep vacant abandoned and deteriorated properties "stuck" in decline and explore ways to bring these properties back to productive use to create vibrant and equitable communities.

Miami-based Steve Wright is an award-winning writer, public policy expert and communications consultant. He has contributed to On Common Ground for more than a decade. Visit his daily blog at http://urbantravelandaccessibility.blogspot.com. Follow his 10,000 urban policy tweets @stevewright64.