When we turn the calendar to 2012, the U.S presidential race will heat up. America's housing crisis is certain to be a hot campaign issue, and we will have no shortage of suggestions to stabilize communities—from expanded programs to purchase and redevelop vacant and foreclosed properties, to assistance to either buy a home or prevent foreclosure.
It seems counter-intuitive, but demolishing non-viable properties is critical to the solution. It's expensive. In Cleveland, Ohio alone, the cost to demolish unsalvageable properties is estimated to be $150 million. In Detroit, Chicago and other urban cities, it is probably higher.
But until the properties are demolished, neighborhoods hardest hit by the crisis won't recover. Property values will continue to decline. Prospective buyers won't invest until troubled properties, and the nuisances they bring, are gone.
An innovative pilot is currently in development in Cuyahoga County, which includes Cleveland. Business and community leaders are working on a model to focus on entire neighborhoods, to demolish hopeless properties and repair salvageable ones to create affordable housing and protect property values.
The big question is whether this idea can work, and if so, can it be expanded across the country to help with the nation’s current housing crisis?
Bottom-line, simply demolishing homes absent an approved aggressive plan by the City in partnership with others, to do something productive afterwards is not in and of itself, an answer. Green space is great if it is protected, patrolled and illegal dumping is monitored and remediated immediately. Sadly, in Cities like Detroit the vacant lots are perhaps even more of an eyesore in some cases than the vacant home ever was.
If the plan in Cleveland involves commitments by investors to rehab properties that have merit and are saleable, and to purchase and / or re-build homes on newly vacant lots then I can see where the approach might have merit. Again, it will take a coordinated effort by all stakeholders and firm enforceable agreements to ensure a positive outcome that truly brings the targeted neighborhood full circle to a location where folks will want to reside. It is folks wanting to live in a specific area that jump starts positive property values. Perhaps the investors or the City might consider the creation of a fund supporting by Bonds and make new mortgage purchase loans available to potential new buyers as well? Obviously not a simple problem to resolve, but as with anything; get enough of the right people in the room to work with each other to create a smart workable and sustainable plan and good things can and will happen.