An idea we’ve been mulling over, and apparently there are plenty of people out there who think it’s a great idea, so we’re not sure why it hasn’t been implemented…other than the fact that it makes sense, and things that make sense don’t go far in our fair city these days.
Bring back the dollar house program, and get rid of the city’s SCOPE program.
Some background:
Two neighborhoods in South and West Baltimore were rehabilitated through the city’s Dollar House program: Barre Circle and Otterbein. These neighborhoods have prospered and the homes have increased exponentially in value. Originally, both neighborhoods were built for and occupied by a mix of prosperous business leaders and blue-collar workers, giving way to blighted slum conditions after WWII. Slated to be demolished in the 1970s with the expansion of Interstate 95, residents and city officials came together to save these two historic communities, under an urban homesteading plan commonly known as “the dollar house program”. The long and short of it – residents were able to purchase the homes for one dollar, provided that they live in the homes and make them liveable. Today, both neighborhoods contain a mix of rental housing and owner-occupied homes — some of the owner-occupied homes are lived in by original dollar-house purchasers and people who lived in the communities before they were slated for demolition. Their ties to the two neighborhoods are strong, and both neighborhoods have active community associations.
We feel that the most important aspect of the dollar house program was the residency requirement. These homes were purchased by the people who would live in them, not by people who would rehab and sell them. Residents make strong neighborhoods, an overload of investors does not. Which brings us to Project SCOPE.
Project SCOPE was designed to encourage investment in marginal communities by selling off vacant blighted properties, through real estate brokers. Its downfall, in our opinion, came when the overwhelming majority of the homes were purchased by “investors” — as many as 85% of the homes, in fact. Whatever money the city gained through the initial purchase of these homes, it will be losing in tax dollars when many of them are sent to foreclosure. With the average Baltimore City annual tax bill of approximately $4000, the potential loss is great. Also, it would seem that the majority of the homes (28) were purchased in one neighborhood (Reservoir Hill), and only one to eight homes each were purchased in other neighborhoods.
On the surface, taking away the residency requirement and opening the purchasing opportunities to investors doesn’t seem to have helped Reservoir Hill, where property values have declined almost 11% since the program’s inception. Granted, their overall property values are higher than a lot of neighborhoods in Baltimore, but we also suspect that has to do with the fact that they are sometimes lumped in with Bolton Hill — a neighborhood that has done a fantastic job of revitalizing its housing stock, with a good mix of renters and homeowners, and its proximity to MICA, public transportation, and downtown.
The bottom line is — programs that open doors to homeownership are the programs Baltimore City should be implementing and pushing hard. Programs that encourage homeownership will revitalize this city much faster and more sustainably than programs that are geared towards investors and realtors. Looking at the housing statistics (length of ownership and home values) of the two Dollar House communities goes a long way to prove this.
April 16th, 2009 at 12:54 pm
Apparently, Sheila Dixon is having a community Meeting at Lake Clifton on 5/6 to discuss vacant houses. Here’s a plan I just came up with, independent of yours, but it seems like the same concept:
I have an innovative plan for Baltimore’s vacant and abandoned houses that I would like to put into the public forum: give them away.
Any house that is owned by the City, or that has an outstanding tax lien of over two years and is unoccupied, should be available for purchase by the general public for a nominal sum ($100 or so). These properties, as they stand currently, are less than worthless. They actively de-value other homes in the area, as well as attract rats,
garbage, drug addicts, drug dealers, thieves and prostitutes. As such, the City should not be treating these properties as if they have some
value on the open market, which is the assumption that programs like SCOPE and Project 5000 operated under.
However, if the barrier to owning these properties is sufficiently lowered, we create a very desirable situation for all types of people
to have a place of their own that they can fix-up with sweat equity. There would be an influx of new residents from across the globe seeking to take advantage of this deal. Current city residents should receive priority, via a 30 day window after the program starts. During
this 30 day window, you would have to show proof of residence in Baltimore City to claim a property. After this 30 day period, anyone
could claim properties. There should be a condition upon purchasing the property that it must be used as a residency within two years of
purchase, or the City will have the right to return the property to the purchase pool.
A baseline assessment would need to be determined on each property, using the current assessment methodologies. The new owner of the property would be taxed on the assessed value. A property assessed at $10,000 at time of purchase would owe $200/year to the City. This
generates revenue for City operations, thus extracting some value from these currently valueless properties.
Such a plan has the following advantages over the current state of affairs:
- Extremely favorable environment for investment and re-population
- Extremely favorable environment for creating home improvement jobs
- Reduced maintenance and policing costs for the city
- Tax revenue generated where there is currently none
Certainly this plan has its flaws and loopholes to be taken advantage of by the ill-intentioned; however, I cannot see any reason that such
a course of action could be any worse than the current state of affairs in our blighted neighborhoods.
As your neighbor and fellow resident, I ask for your feedback prior to the Mayor’s meeting.
April 16th, 2009 at 4:50 pm
The only flaw I can see with your plan is that the window for residents to purchase the properties is a little short. Perhaps extending it to a year — at the very least, it would allow even more of the properties to end up in the hands of residents.
Also, if the properties are not rehabbed and lived in by residents (as with some of the current properties owned by “investors”) — the city should be able to take the property and sell it for its current market value to a resident, with the “investor” (who, keep in mind, did not follow the rules of the program and would have signed a waiver prior to purchase) losing his or her investment. Sounds kind of harsh, but our current situation is pretty dire, and looking at the housing market in Baltimore City — it’s obvious what happens when too many homes fall into the hands of investors instead of homeowners.
With some tweaking, we think your plan sounds fantastic — let’s just home someone in the City listens and doesn’t take the next five years to implement what should be a very doable plan.
April 17th, 2009 at 9:23 am
I think that lengthening the residents only window makes a lot of sense. I was envisioning a landgrab type scenario, where everything happens very quickly. However, a year is quite fast in the lifespan of a city, so your amendment makes more sense.
I did address your second point in my original proposal: a property must be inhabited within two years of purchase or it will be returned to the purchase pool. Perhaps this should be three years, as it takes time to renovate an unliveable house, especially for people working as bootstrappers. However, there has to be a cap to prevent our current situation from recurring – absentee ownership.
Finally, regarding perspective. The city government listens to the people, not vice versa. It’s about time we started acting that way. I do not hope someone listens; I know they will listen.
April 17th, 2009 at 9:45 am
I’m assuming and betting dollars to donuts that this idea will be put forth at the meeting on the 6th (at least, I hope).
April 20th, 2009 at 10:11 am
@citythatbreeds – No doubt about it. We need support for this idea! Follow me on Twitter (twitter.com/stephen_goodman) or email me (steve |at| livesqft.com) to help me start raising awareness.
May 6th, 2009 at 4:07 pm
This idea holds a lot of promise and is worth some serious conversation. What has obstructed plans like this in the past is the issue of what will happen to the outstanding tax liens held by the city. Traditionally, the city has been unwilling to abate liens currently on the books, or re-direct them to the previous private owner (something that has been considered), but which they will likely never collect, in exchange for the revenue which will come from getting the properties inhabited. While this makes sense to you and me, it has proven a difficult concession to some. I would love to help you think this through more and can be reached at [email address redacted to prevent spam]. Also, there are thousands of properties currently held by speculators and otherwise abandoned which should be given to people who want to fix them up as well. We have been doing some of that through Receivership and I would like to see that program expanded.
I will also be at the meeting tonight and looking forward to hearing other comments.
May 3rd, 2009 at 9:38 am
[...] prefer that our city have less blight, please. Over at Baltimore Slumlord Watch, they’re kicking around an interesting idea: What if we got rid of the current SCOPE program and brought back the Dollar House initiative? [...]
January 26th, 2010 at 2:30 pm
[...] topic was broached by the diligent Slumlord Watch blog a while ago, but it’s an idea that I have been clamoring for for years now. The idea is simple: take wide [...]