The Empty House Next Door: Understanding and Reducing Vacancy and Hypervacancy in the U.S.
Alan Mallach’s new report examines how vacant properties are measured, why properties become, what is a “healthy” vacancy rate and the impact of vacancy on the communities in which they are situated.
Vacant and abandoned properties are a familiar part of the American landscape, from the boarded row house in North Philadelphia to the empty factory in Detroit to the collapsing farmhouse in rural Kansas. These structures can devastate the neighborhood and block, undermine the neighbors’ quality of life, and diminish the value of nearby properties. They also cause severe fiscal damage to local governments, reducing local tax revenues while costing cities millions for policing, cleaning vacant lots, and demolishing derelict buildings.
Vacancies skyrocketed with the Great Recession, as the number of unoccupied dwellings rose from 9.5 to 12 million nationally between 2005 and 2010. Vacancy and abandonment are not only urban problems. Rural areas and small towns have a vacancy rate nearly double that of metropolitan areas; rural vacancy problems are particularly severe in many parts of Appalachia, the rural South, and the Great Plains states. And, while the recovery from the Great Recession has reduced the number of vacant properties in much of the country, they continue to dog struggling post-industrial cities, tearing apart neighborhoods with growing intensity, according to a new Lincoln Institute report.
Since the 1990s, vacancies have become more widespread in cities such as Detroit, Cleveland, and St. Louis, former industrial powerhouses known as legacy cities, legendary researcher Alan Mallach writes in The Empty House Next Door: Understanding and Reducing Vacancy and Hypervacancy in the United States. These vacancies are driving property values down, hurting cities’ financial health, and contributing to higher crime rates. At the same time, cities have had some success with strategies to rehabilitate, selectively demolish, and reuse vacant properties as new housing or green space.
The report analyzes U.S. Census and Postal Service data for 15 legacy cities — ten large and five small — as well as for magnet cities such as San Francisco and Boston, and Sunbelt cities such as Phoenix and Dallas. The report focuses especially on two indicators: hypervacancy, the condition in which at least one in five properties sits vacant, and so-called “other vacancies,” a Census term for properties sitting unused and not for sale or rent — effectively abandoned.
A few decades ago, hypervacancy was limited to a handful of neighborhoods but now characterizes large swaths of many cities. In 2015, more than 49 percent of Census tracts in Flint, Michigan, 46 percent of tracts in Detroit, and 42 percent of tracts in Gary, Indiana, suffered from extreme hypervacancy, with more than a quarter of units vacant in each tract.
At such levels of vacancy, “the market effectively ceases to function,” Mallach writes in the report. “Houses sell, if they sell at all, only to investors at rock bottom prices while the neighborhoods become areas of concentrated poverty, unemployment, and health problems.”
Meanwhile, the number of units that are effectively abandoned has increased by 2.1 million units nationally, from 3.7 million in 2005 to 5.8 million in 2016, an increase roughly equal to five times the entire housing stock of San Francisco. These properties represent less than a third of all vacant properties in magnet and Sunbelt cities, but about half of all vacancies in large legacy cities and roughly two thirds of vacancies in the smaller legacy cities, which face the greatest economic challenges, as detailed in the report Revitalizing America’s Smaller Legacy Cities.
The Empty House Next Door describes barriers to addressing vacancies, including cumbersome property tax foreclosure processes, and state laws and bank practices that lead to thousands of properties being stuck in foreclosure limbo. Legal tools including “spot blight” eminent domain, vacant property receivership, and land banking have helped communities gain control of abandoned properties in some cities, but are unavailable or under-utilized in others.
Most vacant houses are well maintained, but many are a problem. Thousands sit empty for years, abandoned by their owners, deteriorating to the point where they cannot be reused without major rehabilitation. Many ultimately are demolished, leaving vacant lots in their place.
These vacant properties can also become community assets. Thousands of vacant commercial and industrial buildings have been restored and turned into apartments, lofts, and condominiums. In Baltimore, neighborhoods have been revived and old houses have been put back to use. In Cleveland, vacant lots have found new life as community gardens, miniparks, and farms.
Some cities have pursued strategies to promote reuse of vacant property. In Cleveland and Youngstown, Ohio, collaborative public-private efforts have combined strategic demolition with rehabilitation to make refurbished homes available to new buyers at affordable prices. Baltimore uses receivership to place vacant properties in the hands of for-profit and nonprofit developers in targeted areas with market potential, putting 1,300 units back to use since 2010.
In neighborhoods with less redevelopment potential, cities have converted vacant properties into green space. Cleveland, for example, published a catalogue of potential green uses for vacant land and worked with a nonprofit partner to make $500,000 in grants to 56 small parks, rain gardens, and agricultural projects. In Philadelphia, the Pennsylvania Horticultural Society has pioneered an inexpensive, low-maintenance approach to greening more than 7,000 vacant lots.
With inspiration from these successes, the report recommends that cities collect better data on vacancies, remove legal impediments to reuse, adopt and use strong legal tools, use public strategies to overcome obstacles to market-driven reuse, make greening a long-term strategy, and balance demolition with rehabilitation as part of a larger strategy for revival.
No single strategy or program can address a city’s challenges with vacant and abandoned properties. Instead, cities can build comprehensive strategies by following these recommendations:
- Know the territory. Use available tools to keep track of the number, status, and condition of vacant buildings and vacant lots in the city.
- Remove legal impediments in state law to effective reuse of vacant property. • Enact and apply strong vacant property tools, such as land banks and receiverships.
- Foster more market-driven vacant property reuse programs:
- to ensure that developers and contractors have quick access to suitable vacant properties at realistic prices with clear, marketable title;
- to create a supply of homes in move-in condition for home buyers; and
- to provide access to mortgages for qualified buyers.
- Make greening a sustainable, long-term strategy for vacant land reuse.
- Make sure that demolition is part of a larger strategy for revival.
Although vacant properties are a problem, they are first and foremost a symptom of other problems—concentrated poverty, economic decline, and market failure. All those involved with America’s cities need to continue working to rebuild urban economies and focus their efforts on the other elements that make neighborhoods good places to live—safe streets, good schools, accessible jobs and services—as well as on helping the residents of those neighborhoods improve their lives and safeguard their children’s futures.
View and download The Empty House Next Door now.
Source: Lincoln Institute of Land Policy