New Orleans If there is one thing every community organizer worth her salt learns about quickly from the first day they put feet to the street and knuckles to the wood, is what to say – and maybe even do – about vacant lots and abandoned houses. Neighbors always want the lots cleaned up and cut, and the vacant houses demolished immediately or rehabbed quickly. After that, they want to have real people as neighbors living in affordable housing. If an organizer is going to be effective in the community, pretty quickly they are forced to become a walking talking expert in what’s possible, who to push, and the whole drill, as well as the long march to not just get something to happen, but to even notch a win.
It should be no surprise that I jumped on an article in the Wall Street Journal about vacant lots, entitled “Too Many Vacant Lots, Not Enough Housing: The U.S. Real-Estate Puzzle.” Ok, Wall Street, welcome to our world!
I’ll give them credit for noticing the obvious, so prop’s for that. They single out Chicago, Detroit, Pittsburgh, and the like, but the facts are the facts, and these are issues everywhere in cities and towns, large and small. They also show a lot of love for land banks, which is hard-earned and well-deserved, even as they can’t help but factually acknowledge, even if doing so indirectly, that these efforts are the equivalent of asking a nonprofit to put its finger in the dike against the flood of properties and the inaction of business and government.
Granted, the report tells stories of certain steps taken by cities and states to make it slightly easier for some developers to build housing there by waiving some property taxes and other liens for water and city services. Here’s how the so-called “success” story works in practice, using Chicago as an example:
The Cook County land bank has around 860 vacant lots in Chicago and is acquiring about 1,000 more. In the 2015 and 2017 Scavenger Sale auctions, the land bank bought the tax liens on 10 empty lots clustered around South Evans Avenue in West Woodlawn…
Please remember that Chicago:
… has more than 10,000 city-owned vacant lots. Another 16,634 are caught in a limbo of back taxes and unpaid fees. Every other year, the county tries to unload such properties in a tax-lien auction known as the Scavenger Sale. Only about 8% of the properties in the auctions from 2007 to 2019 went to buyers who managed to obtain a clear title, the Cook County Treasurer’s office found.
Simple math on this heroic effort by the land bank underscores that their finger in the dike handles only 3.2% of vacant properties thus far, ten years after the program was created by ordinance. Even with another thousand properties, they will only be handling a bit less than 7%, assuming all goes according to plan and the number of vacancies doesn’t continue to rise, which is certainly will.
Acquiring the properties is only part of the problem. Even after the land bank won these ten properties in the auction, the journey had just begun:
Clearing title to the properties required dozens of legal steps and several trips to court. Like all the auction’s bidders, the land bank was excused from paying back taxes. But it first had to give landowners a chance to pay the taxes owed, as well as settle demolition liens, water bills and other outstanding fees. It took four years.
This is what a quasi-governmental body had to do in order to clear title before hammers could be heard in the neighborhood. Just imagine what it might take for a small operator or a family trying to navigate this maze.
The head of the land bank, Bridget Gainer, takes something of a victory tour in the article, saying…
“In the end, we sold the properties at market rate and developed them with no subsidies. What we did was eliminate a market-killing impediment, and the market worked as it should.” The land bank sold the properties to five developers for around $6,000 each.
Surely, Ms. Gainer must understand that she just proved that in reality, neither the city nor the market worked the way it should, or needed to work to really convert vacant lots to affordable housing. Ten lots to five developers are penny ante stuff. Good for them, certainly, but this is band-aid housing development at best. This journey also indicates why serious nonprofit or private developers move to larger tracks outside the city without the trouble. That’s the way the market works, and that’s why as precious and important as this strategy is, it won’t make much of a dent in the problem for the city or for families who need affordable housing.
Please note another important omission. The city and state claimed to smooth the road. In some cases, they waived property taxes owed, which means that they wrote off a debt, not that they made an investment. In New Orleans for example when a house or lot finally goes through the adjudicated housing process, which ACORN was able to shorten from 8 to 3 years, the auction goes through three rounds from paying all the back taxes in the first, to a discount in the second, to a final discount in the third. I guess we could say Chicago is better on that score, but that’s not much to say.
To really deal with vacant lots, abandoned building, there’s really only one solution: show me the money! And, like my auto mechanic used to say, “don’t bring twenty, bring plenty.” All of these programs are just nibbling at the margins. That’s how the market works. To really fix all the American cities dealing with these issues and respond to all the families desperately seeking affordable rents and housing, it will take billions, maybe trillions. Maybe what is being done now is better than nothing, but it’s so close to nothing, that we can’t allow these efforts to pretend to be a solution, rather than a skinny, on-the-cheap stopgap by penny-pinching governments fiddling around while their cities die.