Cleveland’s Dilemma: Rehab or Demo

Cleveland   Every month in Cleveland, the Vacant & Abandoned Property Action Council, convenes. All the seats around the giant meeting room of the Neighborhood Housing Services were filled with rows of chairs surrounding them, packed as well. Sandwiches and cookies were available, but this was not a group of people who were there for the lunch choices. This was a who’s who assemblage of people from the city, county, Federal Reserve, legal offices, community developers, neighborhood organizations, and nonprofits of all shapes and sizes who had an interest in what was happening to property in Cleveland from soup to nuts.

I was honored to be invited to talk about the ACORN Home Savers Campaign, because the group was discussing various proposals for action on land contracts at the local level in places like Youngstown as well as amendments for legislation proposed in Columbus to reform the existing laws. The “Bad Apples” Committee that was looking into rouge real estate operators had changed its name to the Investors Committee, and their work was exhaustive.

All of that was good stuff, but the most interesting pieces of the puzzle that were beginning to fall in place for me, as I listened to the back and forth in the meeting to the discussion, was the interchange between committee members and a member of the county council’s staff on the budget issues involving demolition funds for dilapidated housing. There was a $9 million dollar item, ostensibly for demolition on the 2019 budget line, but some the group wanted to know if that could be spent in 2018, and if so could they tap into another source lying in reserve if they exhausted that allocation. The spokesperson for the County, trying to navigate his way through the questions, assured them that the number was a placeholder and was a 2-year number for expenditure in both years, but was also clear that the council was increasingly looking at the issue, which meant feeling the pressure, to use a pile of the money for rehabilitation of houses as well.

Talking to organizers in the neighborhoods, this was an issue as well with them leaning increasingly towards rehab at this point. Reading the reports from the Thriving Communities Institute provided the background data became clearer for me. Of the existing vacant housing stock of more than 15,000 houses, recent reports by Frank Ford, their senior analyst, put the number that could be rehabbed at over 8000 with the other roughly 7000needing to be demolished. Other reports by the Institute made the case more dramatically that they believed that demolition was the first order of business in saving a neighborhood with rehab following behind, based on their analysis of what moved property values and tax revenues. Not to put too sharp a point on the debate, but their argument was protect the demo money for demo, and go raise other money for renovation. I should add, “if you can.”

Perhaps they are right on the numbers, but it’s easy to understand from the politicians perspective and the neighborhood-based organizations that are dealing with residents every day, asking them to wait to see progress on their own homes, where getting loans for rehab is almost impossible statistically, for some hope in the future by and by, while they watch – and wait – as more houses are reduced to rubble, creating more vacant lots, is not a winner unless some realistic balance is achieved ASAP.

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