Attacking Urban Decay: Take Back Neglected Property

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A vacant historical home on Nolan Street, right across the street from Dignowity Park. Photo by Iris Dimmick.

A vacant historical home on Nolan Street, right across the street from Dignowity Park. Photo by Iris Dimmick.

Tyler TullyIf San Antonio wants to revitalize the inner city, then the people who care need skin in the game.

Take a look at what Baltimore has done. While previous mayors focused their investments and energies into bringing conventions, tourism, and jobs to Baltimore, Mayor William Donald Schaefer had another view in mind.

Understanding that jobs and tourism could only do so much for the city, Schaefer designed a program to address the root of Baltimore’s urban decay.

A vacant home (right) wilts away next to its newly renovated neighbor. Photo courtesy of the City of Balimore.

A vacant home (right) wilts away next to its newly renovated neighbor. Photo courtesy of the City of Baltimore.

The inner-city historic neighborhoods needed desperate revitalization. But instead of investing millions of dollars in gentrification projects, Mayor Schaefer shocked the status quo by initiating the Dollar Row House Initiative, where historically designated row houses were sold to potential live-in buyers for only $1.

Balitmore Mayor William Donald Schaefer was born in 1921 and passed away in 2011. Schaefer served in pubic office for more than 50 years. Courtesy photo.

Former Baltimore Mayor William Donald Schaefer, 1921-2011. Schaefer served in public office for more than 50 years. Courtesy photo.

Understanding that the $1 initiative was a long-term investment, Schaefer set up a system designed to revitalize urban decay, provide a means towards neighborhood community building, and a means to economic development. For the program to work, buyers couldn’t simply flip the home as soon as they bought it. An investment of both body and soul was needed.

For $1, home buyers had to agree to put skin in the game. New residents were required to live in the home for at least three years, bringing it up to municipal code standards, and restoring the houses through renovation. He brought a similar approach to entice businesses, offering historic shell storefronts for only $100 to those who would re-open them.

Schaeffer’s investment paid off big time. Urban homesteaders pioneered in the inner city, bringing dedication, buying power, and bodies back from the suburban exodus. Where the city’s impoverished neighborhoods ached with prostitution, crime, and unemployment, they now saw a genesis of community that came with a reinvigorated sense of pride.

Douglass Row homes in Baltimore, Md. Public domain photo.

Frederick Douglass Row homes in Baltimore, Md. Frederick Douglass (1817-1895) was landlord for houses in this neighborhood; no doubt they helped fund his many abolitionist activities. Public domain photo.

Partnerships Begin

Over the last 10 years, the Empower Baltimore Management Corporation (EBMC), a non-profit designed to operate the Empowerment Zone, has brought together “a number of partners including financial institutions, government, private foundations, businesses, the nonprofit sector and other intermediaries” in order to focus upon creating “communities of choice” in depressed areas of the city. Their aim was simple: provide the means for safe, healthy neighborhoods with economically sufficient residents.

Notice that it didn’t say “economically affluent residents.” The problem in Baltimore was clear to anyone familiar with its historic neighborhoods near the waterfront, including Babe Ruth’s childhood borough called Pigtown. Economically depressed, historic areas became havens for arson, prostitution, and drug dealing.

Pigtown Historic District in Baltimore, Md. Public domain photo.

Pigtown Historic District in Baltimore, Md. Public domain photo.

Sound familiar?

The prescription for Baltimore was simple, but it wasn’t easy. Instead of playing the perennial pastime of popping the ugly head of crime as it surfaced, the EBMC set out to confront the source of the problem: lack of community. You see, community starts with neighbors, and the EBMC decided to establish local community-based Village Centers that acted to target specific strategies within their own neighborhoods. Generally speaking, these specific strategies entailed efforts in business development towards job creation, workforce development for those jobs, community capacity building, and improvements in quality of life.

And their implementation worked.

According to the EBMC, over the last 10 years, the economically depressed inner urban areas have seen an increase in home ownership, resulting in over 11,000 new residents moving into the areas–a feat enabled by the EBMC’s ability to provide special incentives towards closing costs and property purchases for the inner city. With new neighbors committing a choice towards their own communities, EZ neighborhoods saw a reduction in overall crime by 25%, with a 56% reduction in crime from December 1994 to December 2003. The EBMC helped to create over 5,704 jobs, assisted in helping over 700 small business projects, and made 108 business loans in excess of $21 million.

A row of homes in the Seton Hill neighborhood in Baltimore, Md. – most neighborhoods have their own profile at www.livebaltimore.com.

A row of homes in the Seton Hill neighborhood in Baltimore, Md. – most neighborhoods have their own profile at www.livebaltimore.com.

But the EBMC is not the only player in this revitalization effort. Since 1997, Live Baltimore Home Center organization has focused all of its efforts on introducing potential neighbors to the cities’ urban neighborhoods. Neither a quasi-government agency or a department of the city, Live Baltimore exists to connect potential neighbors with access to economic incentives, tax credits, real estate professionals, and inner-city neighborhoods. Like the EBMC, Live Baltimore operates on a budget from a consortium of individual, private, and public sources.

Live Baltimore peddles these incentives at their bi-annual “Buying into Baltimore” pop-up events, where potential buyers can achieve a $4000 incentive if they purchase a home with 90 days of the event. But in order to qualify, these homebuyers must procure a Homeownership Counseling Certificate–a designation they receive by completing a simple, one-time, group-counseling session and one individualized session on the home buying process. The point is, Live Baltimore works with the city and private entities in order to help place new, informed neighbors into historic, up-and-coming neighborhoods.

A Proposal for San Antonio

If San Antonio wants to reform its urban core, we need to strike at the source of our urban decay. Taking a play from Baltimore’s playbook, we need to seriously reconsider the problems of San Antonio’s absentee landlords, delinquent tax dodgers, and vacant lots in historic neighborhoods. What we need is a new generation of urban homesteaders.

A vacant historical home on Nolan Street, right across the street from Dignowity Park.  Photo by Iris Dimmick.

A vacant historical home on Nolan Street, right across the street from Dignowity Park. Photo by Iris Dimmick.

As a former Realtor who worked in the San Antonio market for more than four years, and as a resident and neighbor in a neglected historic neighborhood like Dignowity Hill, my family and I have front row seats to the absurdities of city community-management. There have been many vacant properties in our neighborhood that community members would love to purchase, renovate, and sell to more good neighbors. But the city and state property codes will not seize a property for auction, even if it is vacant and has many years of unpaid back taxes. So instead of being renovated to its former glory, vacant homes remain eyesores and potential havens for crime. Well, there goes another pillar of urban renewal.

A recent report by KSAT-TV news indicates that “there is still about $19.3 million in delinquent property taxes owed to local governments” in Bexar county, but San Antonio’s taxpayers have a tax collection rate of  97.83%.

Let that sink in a bit.

City code compliance operations seem like a pit bull with no teeth–they look like they could enforce something from afar, but up close they just look like geriatric puppies. I can’t tell you how much dirt you have to kick up into the air before city code compliance addresses your concerns.

Recently, the code compliance folks finally came out to our neighborhood after much hullabaloo from our neighbors, only to walk our neighborhood and dole out dreaded orange notices that quickly washed away in the rain, along with our hopes of addressing the issues. What good does it do to hoist up orange notices if the owners of these non-compliant properties do not even live there to read them?

The owners of this home off of Nolan Street appear to be preparing to renovate or demolish the structure – work vans were parked nearby. Photo by Iris Dimmick.

The owners of this home off of Nolan Street appear to be preparing to renovate or demolish the structure – work vans were parked nearby. Photo by Iris Dimmick.

As is the case in our neighborhood, the same is true for many historic areas in San Antonio. Absentee landlords stand to lose nothing and gain everything by letting their properties decay. What incentive can there be for an absentee landlord who would be taxed for spending money to make improvements on their rental properties, thereby increasing the taxable value of the property in the first place?

Unless a physical structure is deemed unsafe, code compliance will not force any property owner into a compliance of codes. But what constitutes “unsafe” if code compliance can’t even get inside the property? Although compliance notifications can be doled out for unattended shrubbery, such kindle is not considered “unsafe” – even after it helps bring down historic properties with majestic potential.

All that to say, absentee landlords have no incentive whatsoever to increase their property values since they stand to pay in taxes for every improvement they make. In essence, they have every economic incentive to keep their properties in squalor rather than to improve the communities in which they are nominally a part of. Meanwhile, their tenets keep paying a rent they can afford in a property that will never increase in value, while the neighbors who care about their communities continue to see vacant houses and lots ransacked by fire, vandalism, and prostitution.

But shouldn’t we give those renters an opportunity to own their own properties, with their own skin in the game, so that revitalization can occur both individually and communally? Shouldn’t San Antonio’s historic neighborhood residents have the option to own their own piece of the city – helping restore each home to its historic glory–instead of living under an absentee landlord?

Two very similar buildings reside on either side of the San Antonio River downtown. One is entirely vacant. The other, the Exchange Building, is an apartment complex and home to two restaurants. Photos by Iris Dimmick.

Perhaps a similar policy for commercial buildings? Two very similar buildings reside on either side of the San Antonio River downtown. On the left: entirely vacant. On the right: the Exchange Building, an apartment complex and home to two restaurants. Photos by Iris Dimmick.

If absentee landlords do not stand to gain from increasing their own property values from fear of paying higher taxes, who stands to gain from increasing property values if not new urban homesteaders? And how are inner city schools to improve on their struggling budgets if their school districts are composed of low value properties? But if neglected urban neighborhoods were infused with a new population of homeowners who cared about the crime, quality of life, and businesses within their own neighborhoods, I have a feeling we could expect to see the exact same trends as Baltimore’s urban center.

So here’s a proposal for the Alamo city that takes guts, but rewards those who stand to help us truly see a transformation in urban renewal:

1. If a historic property is vacant with back taxes, or if the “owners” of a historic, inner-city property have failed to pay taxes for more than 3 years, the city should confiscate the property for dereliction of payment and place the property in a new trust for inner city revitalization.

2. The city should then offer Texas Vets, firefighters, teachers, medics, police, and city employees “first dibs” on purchasing the historic homes in that trust for $1–with the caveat that they must:
a) commit to go to Homeownership Counseling sessions before buying the home;
b) commit to live in the home they purchase for at least 5 years;
c) commit to bringing the home up to code in 1 year; and
d) commit to revitalizing the home to historic standards by the time they resell that property

3. Offer the general public access to the $1 historic property market, as long as they commit to the exact same inclusions.

4. Finally, the city should then offer small, locally owned businesses the opportunity to purchase seized historic store fronts for $100, as long as they commit to similar standards.

Such a process would not only create opportunities for private organizations to synergize with public, private, and grassroots entities in an effort to revitalize our city, but it would also allow for San Antonio neighborhoods to be once again possessed by good neighbors with skin in the game.

 

Tyler Tully is a writer and blogger based out of San Antonio, Texas. A graduate of Our Lady of the Lake University with a BA in Religious Studies and Theology, Tully is currently pursuing an M.Div. from the Chicago Theological Seminary. He is active in promoting the Irish culture in San Antonio and was named as one of the Irish Echo Magazine’s ”40 Under 40” in 2013. You can also follow Tully’s theological blog, The Jesus Event.

 

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17 thoughts on “Attacking Urban Decay: Take Back Neglected Property

  1. Interesting article.

    The City of San Antonio is actually working to create a land bank program, though Dignowity isn’t a targeted area.

    Here is some info:
    http://www.sanantonio.gov/AgendaMeetings/Uploads/QOLAgenda.pdf
    (link only good until they upload the next agenda)

    On tax foreclosures, this is managed by the County, not the City, and I think they have specific foreclosure auction procedures they have to follow. It may be possible to give the City first shot at purchasing those properties from the County, but I’m not sure the political will is there to spend a lot of money purchasing foreclosures to then sell them for $1.

    Realistically, even if you get a house for $1, many homeowners also don’t have the cash to renovate them. If you have a house for a $1 and you get a roof leak, it’s cheaper to abandon it than pay $5000 for a new roof, so some kind of renovation financing assistance would probably also need to be included. I know there are a variety of programs for this (CPS has a weatherization program, for example) but maybe information about all of these resources need to be gathered in one place.

    Also, the City did announce a program incentivizing city workers to move into certain inner city neighborhoods. I don’t know how much traction this has gotten (though anecdotally through Rivard Report I’ve heard of at least one example in your neighborhood- not sure if this program was used), but it is along the lines of what you are suggesting:
    http://blog.mysanantonio.com/newswatch/2012/06/city-workers-may-get-housing-deal/

    But the bottom line of your complaint is private owners that aren’t fixing up their properties and also aren’t selling to someone who could. You are right that there is sometimes a disincentive to fixing up properties.

    Instead of charging higher taxes on properties that get fixed up, some areas have considered implementing a “vacancy tax” which does the reverse- penalizing vacant properties while rewarding those that being fixed up. This might be a good solution for some boarded up houses as well as commercial buildings like those shown (although the caption incorrectly identifies them – the one on the right is the Exchange, the one on the left is the vacant eyesore with problematic ownership.)

    In any case, this is a great conversation to have, and interesting to read about Baltimore.

  2. Hooray for you, Tyler. I’ve lived in Baltimore and know their $1 home purchase program has helped. But there may still be as many as 40,000 vacant properties there. No one knows for sure, as many are still privately owned.

    There is no single answer to such a complex problem as revitalization of our inner city, but such a program here would move it forward.

    What would be the next step? I encourage readers to contact their City Council representatives and encourage them to pass such an ordinance here, to amend the code enforcement, allow the city to repossess derelict properties, and institute a $1 purchase program with the restrictions you described. I plan to do just that.

  3. Great story. The lot we’re going to be building on in Dignowity is two houses down from an abandoned property that rumor says has close to $40,000 in back taxes/fines. There seems to be interest in fixing it up but the individual that owns it has no intention of selling and I almost understand why, she doesn’t pay taxes and doesn’t maintain the yard, probably just seems like a hassle to get rid of it at this point. Unfortunately this also means that the property falls more and more into disrepair every day. There are now talks of demolition of what could be a beautiful historic property.

    I’m not even sure that the properties need to go for a dollar. Maybe a better value would be the tax assessed value, that way the city can pay for some of the costs of the project associated with the properties. This could also be applied to vacant lots of which there are plenty.

  4. Well said, Tyler! Unfortunately, San Antonio lags behind in implementing progressive and creative solutions to chronic problems associated with our urban neighborhoods. Your article focused on historic neighborhoods but your argument for addressing urban decay can be made for any urban core neighborhood in San Antonio. You used Baltimore as a great example of how a visionary mayor used a some what unconventional approach to revitalize Baltimore’s historic neighborhoods. Believe it or not Texas also has a couple of good models in place in which entire blighted neighborhoods have been transformed through private-public efforts. All you have to do is look north up IH 35 to Austin and Dallas. In Austin the Austin Revitalization Authority a private non profit community development corporation has been busy transforming the Central East Austin area for several years. Dallas developed an economic development plan several years ago to address decaying neighborhoods in South Dallas. The city has had good success in gaining some traction in revitalizing those neighborhoods through public investment(bonds), changing perceptions, and attracting private investment.
    Since 2010 the city of San Antonio has had an inner city reinvestment policy in place (ICRIP) with the primary goal of developing new housing on vacant inner city lots as well as redevelopment of underused buildings and lots. The policy allows for incentives and fee waivers to attract investment to our urban core neighborhoods. The policy also has a land bank component that to date has not been utilized effectively if at all. If this land bank component is ever capitalized sufficiently and becomes legal then the city could go in and buy up the vacant lots that litter our inner city neighborhoods and your proposal could actually work.
    I have to agree with you about code compliance efforts not having any teeth. I was part of the group that walked our neighborhood (Dignowity) with code compliance officers, a rep from the city manager’s office, parks police and other city folks. This meeting came about as a result of one our neighbors raising cane over the lack of attention by the city and code compliance regarding the numerous neglected properties in our neighborhood. During that tour several properties were identified and posted with the infamous orange tag….and that was it. Nothing changed and the property owners have yet to be held accountable. Sadly, until the city puts some real teeth into code compliance efforts our inner city neighborhoods like Dignowity, Denver Heights, and neighborhoods on the Westside of downtown will continue to decay.
    Revitalizing neighborhoods has to be a joint private-public effort. City government has to do a more effective job of code enforcement, it has to truly invest in fixing crumbling infrastructure that feeds the perception of decay in our inner city neighborhoods, and it needs to actively and effectively implement it’s own policy of inner city reinvestment. This is not rocket science. As residents of these inner city neighborhoods we need to be well organized to ensure that the proper pressure is applied to our city government and elected officials to get action and ensure that the quality of life in our neighborhoods is not compromised. This is civics 101. We all have an obligation to improve our city and neighborhoods.
    Thank you Tyler for your thoughtful article and commentary.

    Juan Garcia
    President
    Dignowity Hill Neighborhood Assoc.

  5. Thanks for writing this article! By the way, have you talked to Councilman Diego Bernal about a receivership program he’s taking part in for District 1? If I remember correctly he said the State already has legislation approving a judge can sign over properties to the City that are deemed neglected with unpaid taxes and other numerous reasons. He said after the judge signed over the property the city would rehab the property and put it up for sell, giving the original owner the first chance to buy it back, of course they had to do something useful with the property and not leave it vacant, and there would be a percentage added to the sell for the city to get back its cost for the rehab. Sounds great to me but the process to take over a property will take long as the city has to follow a strict process by the state before a judge can sign over the property.

  6. Great idea. Some type of land bank for vacant lots of demolished structures would also be a positive step. Often times these vacant lots are tied up due to tax/demolition liens and unclear titles. I don’t know what the legal process would be, but the city should use some type of eminent domain that declares the titles “clear” and waive these liens. Then the lots could be distributed, in a fashion similar to how Baltimore did it, to those who will build, and live in, new built structures.

    • if it is abandoned, then tax foreclosure is probably the best way to clear the title.

      for eminent domain, city would have to pay fair market value to the owner, which isn’t possible if the owner is unknown or there is a dispute.

  7. Part of this situation must be addressed by the legislature. Even when properties are taken by the city or county for failure to pay property taxes those owners have a right of redemption for four years. Anyone purchasing these properties at a tax auction is going to be reluctant to do much to the house until they can get clear title and that’s not possible until the redemption period has expired.

    Heirs owning properties with large unpaid tax bills are reluctant to sell as the taxes owed might be more than they would net at closing. Perhaps a tax amnesty period guaranteeing these owners to at least break even on the sale might encourage them to sell. They often don’t want the property anyway.

    These properties definitely are a huge problem but there is an effort in the works toward solutions.

  8. Here here, Tyler! So glad you wrote this article. The vacant homes in our neighborhood have been serving as crime hubs. We witnessed a repair man have his truck stolen by con men who used the vacant address as a hub for their operation. (We did try to help.)
    There’s so much speculation that the area is going to “boom” that people are reluctant to sell…well, with all of their derelict properties it’s pretty hard to realize that “boom.” The fact of the matter is that between crime, drugs, and fire…abandoned properties are endangering us all and we’re getting the “there’s nothing we can do” response from the city. I’d like to cry “BS!” on that. There is something they can do, and your proposals sound like a great place to start. Time to grow some teeth, San Antonio!

  9. Fantastic article, about something that must have been on a lot of people’s minds (it certainly has been on mine). Thank you.

    One thing I’d like to point out–the caption on the side-by-side comparison of the two commercial buildings downtown is reversed (i.e., should indicate the building on the left is vacant, not the building on the right).

  10. Excellent article. Can I add one suggestion item 5) offer tax credits to local contractors large or small who partner with the city and offer expertise to help new homeowners complete critical core projects wiring plumbing etc. and or offer discounted building materials…Home Depot Lowe’s.

  11. Good discussion. Here’s some insight from some friends smarter than me. There are several problems with his theory. First being that a large part of property taxes are for the school district. Because of the way the school finance system is structured in Texas, school districts cannot waive or reduce property taxes for any reason. Their accreditation and ratings depend on the tax revenue so they cannot reduce the amount of taxes owed on properties. Many properties owe several years of delinquent taxes and one main barrier to getting them back on the tax rolls is the school district cannot negotiate the taxes owed. The city and county can waive the taxes owed to them, but they are really only about half the total owed, so it doesn’t help in many situations. I don’t know the property tax structure in Baltimore, but I would guess it is dramatically different than in Texas. Second, and AK, I’m sure you will support this, for historical properties, our own Historical Commission is so difficult to work with that trying to get approval on any building changes or upgrades sometimes become unreasonable. People simply don’t have the knowledge or money to maintain the historical levels that the Commission requires. Third, on behalf of the taxing entities, we really don’t want buildings demolished by code compliance because then we will never get what is owed to either the taxing entities or the city for the demolition. Usually, the real property itself does not contain enough value to cover the costs of several thousand dollars of taxes as well as several thousand dollars of demolition costs. In my experience, demo costs average $15,000-20,000. So, even with all the liens on the property, it’s not worth enough to cover everything so the taxing entities and the city lose on that venture.

    As AK said, the city, county and state already have a lot of the tools to do the same thing already in place. The difference is the way our property taxes are structured really tie the hands of the taxing entities to do something like in Baltimore. Now, do people want less property taxes? Of course. But, what then comes in to make up the difference? Higher sales tax? Doubt it. State Income Tax? Not in the current Texas, even though a state income tax is the least regressive. Perry has already shown that if you reduce property taxes but don’t have some other form of “income” for the state, you get a deficit–big surprise!

    We started working with the County a few years ago on a Land Bank. Where the city and county would target certain low income areas of the city and market the properties that had been struck off to the County for delinquent taxes, i.e. the County now owns the property on behalf of all the taxing entities and the property is tax exempt until it is purchased by someone else. The problem is, most of the struck off properties are commercial and in areas like Edgewood where businesses, even if they get a good deal on the property, don’t want to move in. Most people want residential properties. Frankly, there really aren’t enough of them in a concentrated area to make a project like that work the way it’s supposed to. The other real problem in Bexar County are over 65 and disability exemptions and deferrals. Many dilapidated properties are being lived in and owned by these folks who cannot afford to fix them up and the city is not going to evict them or demolish the property. We can’t collect delinquent taxes because technically, the taxes aren’t owed until 180 days after they die or permanently move from the residence with no intent to return. So, I think the problem is a little more complicated than the author seems to understand. I’m all for developing our inner cities, but that’s for people like AK to figure out, not me!

  12. Why doesn’t the land bank cover areas that would actually benefit from such a program in the first place? Why not Dignowty, Tobin Hill, and other areas in/around downtown that residents and businesses are actually interested in?

  13. Hey, let’s take back the Commander’s House Garden Conservancy and make sure it stays vibrant. It’s woefully underutilized. We need parks. We need lively parks and historic parks. Blessed are the GREENmakers;)

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