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Posts about Vacant Property

Development


This building is very tall and very vacant

Our region's tallest building is in Rosslyn, and it has been vacant since the day it opened in 2013. That's because construction started during a time of economic prosperity but wrapped up during a downturn.


Image by Ron Cogswell on Flickr, with an editor's note.

The building at 1812 North Moore Street is 390 feet tallfor comparison, the Washington Monument is 555 feet.

You'd think that being right next to the Rosslyn Metro stop (which is also a bus hub) would make this 35-story building an ideal spot for all kinds of commercial tenants.

The problem is that from the time Monday Property and Goldman Sachs teamed up to develop the building in 2010, they never found a an organization to take on most of the lease, otherwise known as an "anchor tenant." It's ideal for commercial buildings to have anchor tenants before groundbreaking to guarantee a financial return on the building, and to help bring in other tenants.

The developers proceeded to build without an anchor tenant because at the time, our region's economy looked like it had successfully weathered the "great recession" thanks to stimulus funding and the reliability of government jobs. Monday and Goldman Sachs figured that even if a tenant wasn't lined up yet, they were sure to find one.

But the same year that 1812 North Moore got started, the region's job market started declining, which led to several large companies (Northup-Grumman, for example) and government agencies leaving Arlington. That included the federal government moving thousands of military jobs from Crystal City to the Mark Center, and eliminating others during sequestration. That created a glut in Arlington's office market that's taking a long time to fill.

Rosslyn's office vacancy rate tripled from 10 to more than 31 percent between 2011 and 2014, and 16 government defence agencies left Arlington County between 2005 and 2015. In 2015, the vacancy rate in Arlington was close to 21 percent, which was a historic high (DC never went above 12 percent).

What's keeping this building vacant? Here are a few reasons

Although the vast majority of office tenants these days want to be near Metro stations, downtown DC and Tysons Corner are competing much more strongly than they used to, making it harder for places like Rosslyn or Crystal City to fill office space. Downtown DC no longer suffers from negative image it had in the 1980s or 90s, and thanks to the Silver Line, Tysons Corner is in the game like never before.

(On a related note, buildings in Tysons will soon take the "tallest building in the region" crown.)

Also, eschewing the basic concept of supply and demand, the building's owners have not reduced their asking price for tenant leases, at least not as of late 2015

A final reason could be that though the economy has regained much of its steam from the 2008 downturn, the new economy is a lot different from the old one. More people are self-employed or work non-office jobs than before, and thanks to teleworking and increasingly paperless office environments, even large office-using employers fill less office space per worker than they used to. The farther you get from the DC core, the less demand there is for office space per capita in 2016 as there was just a few years ago.

Short of finding a tenant that wants to move in, 1812 North Moore will likely either need to cut its leasing price or sell to another investor.

Government


DC will have even fewer vacant properties if a new law makes these changes

There are major problems with how DC counts and taxes its vacant buildings, and on Thursday, the DC Council will hold a hearing on two bills aimed at fixing them. The new laws will hold vacant building owners more accountable, but there are still ways to further the laws' reach.


This house at 5112 9th Street NW has been vacant for three years. It regularly falls "off" the vacant building list, so it isn't taxed at the higher level consistently.

Today, DC can charge higher tax rates on buildings that the Department of Consumer and Regulatory Affairs says are vacant, at a rate of five percent of assessed value if vacant and 10 percent if the property is found to be blighted. The problem is that there are a lot of loopholes that allow negligent owners to keep their properties from going on the list.

Vacant buildings aren't just eyesores. They contribute to rodent and other infestations, and according to the Office of the Attorney General's former Assistant Attorney General Michael Aniton, they are proven to have a high association with criminal activity because illegal activity thrives out of view and on private property.

Here's what the new bills are set to do:

Authored by at-large councilmember Elissa Silverman, bills B21-527 and B21-598 appear to have wide support among the council (one of the two companion bills was co-introduced by a majority of councilmembers). The legislation aims to help solve DC's vacant building problem by:

  • Cutting how long vacant properties can be exempt from higher taxes
  • Making homeowners prove buildings aren't vacant rather than making the Department of Consumer and Regulatory Affairs prove they are
  • Raising fines for not registering vacant properties
  • Giving tax rebates owners who fill vacant properties
Here's how they could be even better:

Still, the underlying issue is that some buildings and owners fall through the cracks because the penalties for keeping properties vacant either aren't enforced or aren't incentive enough to change. The following ideas would help the proposed legislation go even further in pushing vacant property owners to turn their buildings into something useful:

1. Take no nonsense when it comes to identifying building owners

Currently, some developers use dozens of LLCs to own properties, making it impossible to know who it is that routinely buys and holds vacant buildings without actually improving them. If all property sales in the District required a name, address, phone and next of kin information for every property, and if this information were publicly available, it'd be much easier to identify the vacant building code's serial violators.

This would have the added benefit of expediting communications should a property owner pass away. It would also help the city to ensure that when a property passes from an older family member to a younger one, it doesn't keep charging the reduced tax rates it does for senior.

2. Make it more expensive to leave a property vacant

Currently DCRA sends out teams to board up doors and windows of vacant properties, and DPW mows the lawn. The bill is tacked on to the owner's tax bill. Doubling the fees for these services would incentivize vacant property owners to manage these issues on their own or to return the property to active use.

3. Penalize banks who back vacant owners

Banks found to be lending to LLCs that own vacant properties should pay the District an additional tax to cover the costs of fire and rescue that may be needed on these properties—and to make them want owners to move properties into use.

4. Reinstate a tax on vacant lots

In 1990, the District established a tax of $3.29 for every $100 of assessed value on vacant lots without structures, also known as Class 5 properties. The tax was increased in 1994 to $5.00. At the time the tax was raised, then-Mayor Sharon Pratt Kelly stressed the importance of the tax in providing incentives for owners to eliminate blight and increase the supply of affordable housing.

In 1999, however, officials did away with this property tax classification. The DC Building Industry Association (DCBIA) argued that taxing vacant parcels was counterproductive "at a time when the market is down." The market is no longer down, yet vacant parcels still blight our communities without any penalties being assessed to the owners. It is time to reintroduce the Class 5 tax rate.

5. Require complete transparency at DCRA:

This is the most important issue not addressed by the legislation. DCRA's Online Building Permit Database has been "offline" for over 130 days now. The public has a right to see what fines are being issued to vacant and blighted properties, dates of inspections, and findings of inspectors.

Further, DCRA removes every vacant and blighted building report after six months, so that the public can't see the history of vacant buildings. We propose that these records be maintained online, publicly available, for five years so that the public can be confident that vacant property owners are paying their fair share for the burden they have put on the community.

The DC Council will hear testimony on Thursday

We look forward to testifying at the DC Council Committee on Business, Consumer, and Regulatory Affairs's public hearing on bills B21-527 and B21-598 this Thursday at 10 am at the Wilson Building. Please join if these issues interest you. If you wish to testify, contact Faye Caldwell, at fcaldwell@dccouncil.us.

Development


Help us map out DC's vacant buildings

DC doesn't have an accurate count of how many vacant buildings it has, which means lots of missed opportunities for more tax revenue or new housing. We've created a map of the vacants the city knows about. Tell us about the ones that are missing, and we'll send the full list to the DC Council before it votes on a law to fix the counting problem.


Photo by NCinDC on Flickr.

We've written about problems with DC's system of accounting for vacant buildings and enforcing the regulations aimed at them a couple times over the past few months. It's a mess of loopholes where owners can skirt detection and penalties by doing things like applying for work permits but not doing any actual work for years.

In a place like DC, where space for new housing is at such a premium, this is infuriating.

DC's Department of Consumer and Regulatory Affairs publishes lists every year showing which properties it has officially designated vacant and blighted (which means a building is a threat to health and safety). When a building goes on the list, its owner has to pay higher tax rates of 5% for vacant buildings and 10% for blighted.

While the agency's count is far from complete (which is a significant part of the problem), we thought we'd start by mapping out what it has provided:

Map by Thad Kerosky (@thadk).

Remember, these are not "For Lease" buildings, vacant lots, or buildings under construction. These are buildings that 1) have no occupants, and 2) have an owner who is not actively pursuing construction or new tenants.

DCRA most often investigates a building after receiving a report from a neighbor or agency, though many people will tell you they have filed reports repeatedly with little reaction from the agency.

Get out your red pens... we can correct this!

On Thursday, July 14th, the DC Council's Committee on Business, Consumer, and Regulatory Affairs is having a hearing on a series of bills that would fix many of the problems with DCRA's current system. Greater Greater Washington would love to submit testimony in support of that legislation, but we need your help.

If you know of or suspect a vacant building nearby, use the search function above to see if DCRA has already classified it as such. If it hasn't, fill out the form below and help us collect further evidence that this system needs fixing.



Development


This new law would mean a better count of DC's vacant buildings

DC probably has a lot more vacant and blighted properties than its official count says, largely because of loophopes in the counting system. A bill before the DC Council is aiming to change that.


Residents proposed ideas for ways a long-vacant property could be put to better use. Photo by Myles Smith.

In February, Elissa Silverman introduced the Vacant Property Enforcement Amendment of 2016 to work in tandem with a similar piece of legislation she introduced in 2015. Both would shift the burden of proof from DC's Department of Consumer and Regulatory Affairs to the property owner, meaning it'd be on the owner to show that a buildint isn't vacant rather than on the city to show that it is.

This change would make building owners much more accountable, as well as strengthen DCRA's ability to enforce existing vacant and blighted properties laws.

First, a quick recap of the current situation

Under current law, properties determined that DCRA's Vacant and Blighted Enforcement Unit determines to be vacant are taxed at elevated tax rates of five percent of assessed value if vacant and 10 percent if the property is found to be blighted.

But the process for classifying a property as vacant or blighted and then maintaining the property's classification is onerous; District law states that the Mayor is the only person in the city who has the authority to list a building as blighted, and there are a number of loopholes in the law that allow negligent owners to avoid elevated tax rates.


A vacant building at 824 Kennedy Street NW. Photos by the author unless otherwise noted.

Every six months, DCRA has to reassess the property and determine that it is still vacant and/or blighted. That means that when a building goes onto the list, chances are high that it will revert to the normal non-vacant, non-blighted tax rate even if the owner does nothing at all.

We estimate that there are as many as 5,000 vacant and blighted properties in the District, a number far too large for the small staff of DCRA's Vacant and Blighted Enforcement Unit to keep a handle on.

Silverman's bills do four things:

It reduces from three years to two years the maximum amount of time a vacant property can qualify for an exemption from higher taxes.

  • Currently, property owners can get exemptions from higher tax rates for up the three years by filing for work permits that cost a fraction of the potential tax penalty. In practice, these exemptions can last much longer than three years, as David Sheon and I have documented in a number of cases. There is no requirement that any actual work be done to earn the exemption.

This vacant building at 5112 9th Street has been vacant for three years, but it regularly falls off the list and its owner doesn't get taxed at a higher level consistently. Neighbors complain of loiterers and drug activity on the property.

It shifts the burden of biannual proof that the building is vacant or blighted from being the responsibility of DCRA inspectors and onto homeowners.

  • As the law stands, DCRA has to inspect every one of the 1300 properties on the list plus any new properties every six months. This bill shifts the burden off of DCRA and onto the owners of vacant properties by making them demonstrate with utility bills that the properties are no longer vacant.
It raises fines for failing to register vacant properties or allow DCRA to inspect them.
  • Accepting a fine is often easier and less expensive than registering a property as vacant. This bill reverses those incentives, making it easier for DCRA to maintain accurate lists with up to date information and to take enforcement actions when necessary.
It provides positive incentives by allowing an owner of a vacant property who follows the law and fills the vacancy within a year to receive a rebate of one year of vacant property taxes.
  • There is currently no mechanism for reimbursing owners of vacant and blighted properties who remediate blight and fill vacancies. This law will provide a strong incentive for owners to move quickly and do the right thing.

A vacant building at 615 Jefferson Street NW. Note the stop work order in the window.

The DC Council will take the next steps in July

The Council has scheduled hearings on the proposed legislation for July 14. Hopefully, we'll see the bill brought up for a vote following the hearings.

While this bill does not address all of the loopholes, it does fix the most obvious flaws. We are pleased to see this development, and urge Council to add the additional amendments needed to address the above listed issues.



Development


DC has way more vacant properties than it thinks

Editor's note: While this post has two authors, it's written from David Sheon's perspective.

The official count of vacant and blighted properties in DC is about 1,200, but in reality, there are likely many more. The reasons for the discrepancy? A number of loopholes in the system for counting these properties, and not enough staff to close them.


This vacant house might look like it's under construction, but it hasn't been touched in years. All photos by the authors.

When I first became an ANC Commissioner, I knocked on every door in my district and asked my constituents what they wanted to see different. Then, I tallied their concerns to see what issues rose to the top. The results surprised me: Issues related to vacant and blighted (which basically means it's a threat to health and safety) houses ranked second on people's list of concerns, after traffic safety.

After being elected, I compiled a list of vacant properties in my neighborhood. In my 12-block district, I found seven clearly vacant homes. In many cases, these houses were literally falling apart, full of garbage (a broken down pick-up truck from a long-abandoned construction project on one) and overgrown weeds. Neighbors confirmed the properties didn't seem to be in probate (when a property is tied up in court because the owner passed away and it isn't clear who now owns it) but had been vacant for years.

These properties aren't only eyesores; they're a threat to public safety. On many, unsecured doors and windows attract crime, but without actual residents in the houses, there fewer eyes on the street. They also deter investment.

Unfortunately, DC's system for identifying these properties, assessing penalties, and putting properties back into productive use is fundamentally broken.

It's hard to get a property officially registered as vacant or blighted

The road to remediating vacant and blighted properties starts with DC's Department of Consumer and Regulatory Affairs (DCRA). There, the Vacant and Blighted Enforcement (VBE) Unit is tasked with inspecting vacant and blighted properties and then assessing an appropriate tax rate. The idea is to raise taxes on buildings that aren't being put to use as a way to encourage the owners to sell or fix their properties.

For vacant properties, the tax rate is five percent. For vacant and blighted properties, the tax rate is an even higher 10 percent. But this is where things get really tricky, as there are a number of loopholes that prevent these taxes from being assessed.

For example, once a property is identified as vacant, a property owner can get a permit to do work on the house. The property then becomes exempt from the vacant property tax even if no work has been done. For instance, long time neighbors of one vacant property told me they had never even heard a hammer in the vacant house, even though a work permit kept the vacant building tax from applying.

Another loophole involves putting the property up for sale at a price that is several times the fair market value. The "for sale" status will also earn the property owner an exemption. At one property near my house, which was falling apart, the owner listed it for sale with a price as though renovations had been made. In the condition it was in, the price should have been about $300K however he was listing it at nearly $900K. Clearly no one was going to buy it, but this way he avoided vacant building tax.

Owners can also set up anonymous Limited Liability Corporations (LLCs), often named for the property's address, that don't actually tie back to a person. That can make it impossible to go after individual owners to recover taxes owed or penalties assessed to the LLC. One example of this are the properties owned by Insun Hofgard, who WAMU's Martin Austermuhle reported on last year. Most of her properties, including those that remain unfinished and now blight Kennedy Street, are registered under individual LLCs.

Finally, vacant lots are also exempt.

Even when the VBE does identify properties as being vacant, the law requires the unit to reinspect the property every six months and reclassify it as either vacant or vacant and blighted. The VBE is not sufficiently staffed or resourced to handle this task, and properties routinely fall off DCRA's list, even when what got them on it in the first place hasn't changed.

Why would a property owner want to keep a property vacant as long as possible? As long as DC property values are going up, the longer the owner waits, the more profitable it will be.

In our experience, the system is broken

Since 2013, my neighbor and co-author, David Gottfried, has worked to identify vacant and blighted properties and to ask DCRA to classify them as such.

Every six months, David has followed up with DCRA to ask about keeping properties on the list and applying the appropriate penalties. Despite his efforts, the properties on his own list, which were clearly vacant and often unquestionably blighted, just slipped through the cracks. On my end, only three of the seven vacant properties that I identified in my neighborhood were on the city's list.

Simply put, it's very difficult to get a property classified as vacant, or keep it that way. Even when neighbors keep very close watch and follow up diligently with city agencies, DCRA is too often failing to adequately identify vacant properties and penalize their owners. Our experiences lead us to believe that the actual number of vacant and blighted properties is much higher than the 1,200 properties on DCRA's list, and could be as high as 5,000.


Another vacant property. Here, renovations are now underway—it'd be nice if that were the story more often.

Let's give DCRA what it needs to close the loopholes

This is an important issue for the health, safety, and well-being of our communities. It is also an issue of basic fairness. Negligent property owners who degrade our communities and jeopardize our security should face stiff penalties for their actions.

We need to adequately staff and resource the VBE, remove the burden from community members and DCRA to classify and re-classify properties, and place the onus squarely on the property owners by making them show the city that a property is no longer vacant before a property is removed from the list. We also need to pierce the corporate veil afforded negligent homeowners who use LLCs, so that DCRA and relevant agencies can appropriately penalize negligent homeowners.

Some of these fixes are hard and will take time, but with others, a small change in the law could go a long way. A little bit of political will and leadership could go a long way towards making our communities safer, more attractive, and more pleasant places to live.

We'll discuss pending legislation around vacant and blighted properties in an upcoming post.

Development


My neighbor is an empty house, one of over 3,500 in the District. The DC Council wants to make it affordable housing.

Within one block of my apartment, there are three separate vacant buildings, with little sign of pending construction or development. They've been that way for years, and I live in Shaw, which is booming. DC Councilmember Anita Bonds has introduced a bill that'd let the mayor turn vacant buildings into affordable housing.


My neighbor, the empty building. Photo by the author.

DC wants to buildings to be used, not stay vacant

Vacant, blighted and condemned buildings are of no use to anyone, especially the city. While the property owner might pay taxes and penalties, there's an overall loss of revenue when you consider that occupants would be both taxpayers and consumers. And that's not to mention the negative effect empty or boarded up buildings have on neighborhoods.

Because of this, DC has laws and systems to try and get these units occupied and reintegrated into neighborhoods. The DC Department of Consumer and Regulatory Affairs has an entire unit, the Vacant Building Enforcement Unit dedicated to buildings around the District that are like the ones on my street. Its job is to compile these lists twice a year, identifying all of the vacant and blighted properties in the district, and then enforce penalties and taxes on the owners of each unit.

Here are the current numbers on vacant buildings

Just how many of these building are out there in one of the fastest growing "states" in the country? Thousands.

In her opening statement last month introducing a bill to address the issue, Councilmember Anita Bonds explained that as of November 2015, there were a total of:

  • 3,535 vacant buildings
  • 345 blighted buildings
  • 132 condemned properties
  • 67 vacant lots of 650 square feet or larger
That is a lot of potential space in a city fighting for every scrap of usable land.

To encourage owners to occupy or develop buildings, the District taxes vacant and blighted buildings at a much higher rate than occupied ones. While occupied units are taxed at around $1 per $100 of assessed value, vacant buildings are taxed at $5 per $100 and must meet certain maintenance standards. Blighted buildings (those is more serious disrepair) are taxed higher: $10 per $100 of assessed value.

When taxes don't work, the city uses liens. But what about when liens don't work?

At first, it seems illogical for properties to sit unused: DC needs more housing, neighborhoods want more retail, and property owners and developers want returns on their investments, not fines and taxes. But there are many reasons for a building to remain vacant even when developing it might serve the greater good.

Sometimes the culprit is an absent owner waiting to cash in when property values rise, often utilizing loopholes to get out of the tax penalties. Other times it is simply a case where accumulated unpaid taxes and penalties have amounted to such a high amount, the situation is stuck.

If I'm a building owner and I don't pay my property taxes, the government has the option to bundle what I owe into an investment called a tax lien that it can then sell to an investor. An investor can then come and buy that lien, making the government happy (they got their money), and now I owe my overdue taxes, interest, and penalties to this investor. If I still don't pay over a long enough period of time, that investor can foreclose on my building and take it away.

Sometimes, though, nobody buys liens. It might be that an investor doesn't want to buy the lien for a building that is falling a part and is not worth the investment. It might also be that the tax lien has become so high no investor will bite. The list of tax sales that went up earlier this year shows the wide range of liens available to potential investors, and just how high they can be: over $1 million for one particular property.


Photo by NCinDC on Flickr.

Anita Bonds wants to change that

Councilmember Bonds' bill, introduced after work with different housing advocacy groups, intends to target vacant properties which haven't or probably won't sell. The bill would allow the Mayor to transfer the rights of properties where the property tax debt is 50% or more of the assessed value of the property to a developer or non-profit. The new owner would have to meet strict affordability standards with their plan for the property:

  • For single family buildings, the new property must be affordable to buyers or renters at 90% AMI (Area Median Income)
  • For multi-unit buildings, one-quarter the new property must be affordable for buyers or renters at 80% or below of AMI, one-quarter at 50% or below of AMI, and one-quarter at 30% or below of AMI
The bill also mandates a 40-year affordability covenant on the property (ensuring the affordability rules above in the deed), and outlines a process for the selection of the profit or non-profit developers who would take over the property. Currently the legislation has been referred to the Committee on Housing and Community Development and the Committee on Business, Consumer and Regulatory Affairs for analysis. The housing committee will probably address the bill in May.

Have an opinion? Send an email to the Councilmember Bonds, the chairperson of the Housing and Community Development Committee, at abonds@dccouncil.us, or to Committee Director Irene Kang (ikang@dccouncil.us).

In the meantime, know a vacant building you want turned into affordable housing? Call 311 or email vacantbuildings@dc.gov to report.

Development


Baltimore's problem is sprawl, not a bad economy

The city of Baltimore has over 20,000 vacant row houses and 300,000 fewer residents than at its peak. Governor Larry Hogan recently announced funding to demolish whole blocks of them. A common narrative outside Baltimore is that the city is in collapse thanks to manufacturing jobs leaving, as in many Rust Belt cities. But that's not the biggest problem. Suburbanization is.


Vacant houses in West Baltimore. Photo by charmcity123 on Flickr.

Pundits often paint a picture of a place in economic decline that has never recovered from the loss of thousands of manufacturing and steel-making jobs. "Since at least the 1970s," E.J. Dionne Jr. wrote in the Washington Post in May, "the economy's invisible hand has ... been diligently stripping tens of thousands of blue-collar jobs from what was once a bustling workshop where steel, cars and planes were made."

Like Rust Belt cities, Baltimore used to rely on manufacturing and steel-making, but it has changed. The Baltimore metropolitan region's GDP is higher than Portland (Oregon), Columbus (Ohio), Orlando, Austin, Charlotte, Las Vegas, Nashville, and San Antonio. It ranks fourth in percentage with a graduate or professional degree and fourth in median household income among the 25 largest metro areas. (Washington DC is number one in both categories).

Here's the rub. While Baltimore City's population has dropped by 300,000 people since its peak census count in 1950, Baltimore County has added 550,000. Anne Arundel County over 400,000. Howard County almost 300,000. Harford County 200,000. Carroll County has added over 100,000 people.


Suburbanization into green fields in Owings Mills. Photo by Doug Kerr on Flickr.

State spending in the suburbs sapped Baltimore

Baltimore City's surplus of vacant houses is not there because of a poor regional economy or because the Baltimore region's population is shrinking. It exists because the region has built lots of new roads and highways, new schools, new utilities, and new homes outside the city, without equivalent investments inside the core city.

People and businesses have flowed to the geographic shift of new investments in surrounding counties. As this was happening, physical and social decay escalated in many of Baltimore's older row house communities, especially African-American neighborhoods.

Some of this early exodus was the result of directly racist practices such as redlining. However, shifting public investments outward, often based on theoretically race-neutral growth formulas, certainly was anti-urban and had the greatest impact on urban communities of African-Americans.

Regardless, people with choices of all races have made rational decisions to leave behind thousands of houses in poor school districts with old school buildings, high crime, pothole-ridden streets, inadequate transit, and leaky pipes.

A renaissance is around the corner for more neighborhoods

There are new positive trends that portend a brighter future for some of Baltimore's challenged row house neighborhoods. First, Baltimore City has stopped hemorrhaging net population. New city-based industries are thriving in health sciences and technology.

The Under Armour corporation is a major growth magnet with over three billion in annual revenue, and growing, every year. Lots of people are still moving out of the city, but there is a new crop of newcomers, often well-educated millennials and some immigrants.

However, they are not spreading across the city evenly. They are bypassing the most challenging row house neighborhoods.


Baltimore's booming Brewers Hill neighborhood is mixed with new apartments, offices, and fixed up rowhouses. Photo by Elliott Plack on Flickr.

Thousands of new upscale apartments and professional offices are being added downtown and in a ring of neighborhoods around the harbor, often on former industrial brownfield sites. The harbor adjacent row house neighborhoods have been fixed up and growing for two decades. It shows, that when there are amenities in the neighborhood, there is demand for row house living.


Vibrant rowhouses in Hampden west of Johns Hopkins University. Photo by Cat on Flickr.

One sign of what may be to come: the resurging row house neighborhoods west and south of Johns Hopkins University, several miles north of the harbor. Where there is a neighborhood anchor institution, good retail, and reasonable transit, some old Baltimore row house neighborhoods may reverse their fortunes in the next decade. Inclusivity will be important.

However, as in decades before, state and regional decisions on school, infrastructure, and transportation investments will play their part on whether some Baltimore city neighborhoods can come back. These decisions are particularly important for the most vulnerable.

Preservation


Baltimore will tear down whole blocks of row houses to fight blight. Is that wise?

In DC, housing is so scarce that prices are skyrocketing, especially for charming, historic row houses. Just up in Baltimore, however, they can't give many dilapidated row houses away, and Larry Hogan recently announced a plan to tear many of them down. Is that a good idea?


Image from @MayorSRB.

Baltimore officials think so; its mayor, Stephanie Rawlings-Blake, and Housing Commissioner Paul Graziano think this is something the city needs. Some advocates aren't as sanguine.

In the short run, parks will replace the tear-downs, but Hogan also announced a loan program to encourage developers to build new housing in the same neighborhoods.

What's the point of knocking down housing just to build other housing? Our contributors discussed this issue.

Canaan Merchant articulated the concern:

There is a sense that these neighborhoods will just never recover (at least in our lifetimes) and until then the abandoned houses just make things more dangerous.

But if the "plan" (vague as it is) is to build parks and affordable housing then I have a hard time separating that logic from what we said about so many neighborhoods (like Southwest Waterfront).

Meanwhile, one of Baltimore's best resources are these old row houses and tearing them down is a big opportunity cost that can never be replaced. That's why we have historic districts and why historic districts are valued today.


Photo by urbanfeel on Flickr.

Payton Chung explained the economics:

There is such a thing as property with a negative value. Think about if a smelly, flea-ridden old couch materialized in your living room—you'd pay to get rid of it, right? That's negative value.

Given the high housing prices in DC, we can sometimes forget that the capital cost of rehabilitating (or even maintaining) buildings can be so high that those buildings have negative value. Gut-rehabbing an old rowhouse just to meet code can easily cost over $100,000.

Given that move-in condition rowhouses in West Baltimore can cost $50,000, there's little economic incentive to rehab the houses unless you're comfortable throwing lots of money away. Nor can you just rehab a few of them: vacant properties really drag down the value of entire blocks, and selective demolition isn't an option since rowhouses depend on their neighbors for structural support.

What's more, even good houses at low prices won't be enough to stimulate demand for new housing. It's easy to think "oh, housing prices are cheap, therefore it's a bargain." As new arrivals to Detroit can attest, though, that's not always the case.

Not all rowhouses are created equal. The houses that are being targeted are quite different from DC rowhouses: whereas ours are typically 16-18' wide, Baltimore's rowhouses are just 12-16' wide in most cases. (It's not just a matter of platting—rowhouses have beams across their entire width, and the price of solid-wood beams doesn't scale linearly.) Those extra few feet make a huge difference in livability, especially in the ability to have hallways next to habitably-sized rooms.

Richard Layman, a historic preservation supporter, posted some thoughts on an email list and gave permission to print them.
There is a difference in what people can do in weak markets as opposed to strong markets. In a city like DC, there is demand for property, whereas in Baltimore, my sense in talking with planners over the years is that they are beaten down by the sheer volume of the problem, that they have so many vacant properties and lots, that they see demolition as a reasonable step.

The weak market problem there is stoked by too much capacity for development in Howard, Baltimore, Harford, and Anne Arundel Counties. There isn't enough demand for all those places to be successful, and the success of the counties comes at Baltimore City's expense.

But the reality in a place like Baltimore is that a demolished empty building becomes a vacant lot, no easier to revitalize, and merely a different form of blight, an exchange of one blight for another.


Photo by John Perivolaris on Flickr.

Jeff La Noue lives in Baltimore and gave a perspective from up there:

As a Baltimorean, I appreciate our rowhouse architectural character. However, there have been so many public policy decisions, including poor transit as well as the preponderance of crime and poor schools, that make many row house neighborhoods lose their favorability/marketability. As a result, many shells can't be given away and there is no market to spend any money to redevelop.

We all dream of a time when the conditions change for many desolate row house neighborhoods. However, while we wait, the rot continues. In addition, Baltimore remains relatively affordable and we continue to build lots of new housing in the booming southeast part of the city and suburbs. The oldest and least desirable housing then goes vacant as people move up to better housing and "better" neighborhoods whether they be in the city limits or not.

I certainly would love to see a nuanced demolition plan that does not knock down the most charming and viable. However, I think we need to cull of the weakest of the rowhouse herd. It is hard to leave 20 to 30,000 vacant houses just sit for another decade or more. There is not enough demand for traditional row house living right now, especially with poor transit and little neighborhood retail, to make a massive rowhouse renovation plan financially viable anytime soon.


View from the West Baltimore MARC station. Photo by Adam Moss on Flickr.

Could Baltimore be DC's next bedroom community?

So, there's negative demand for housing in Baltimore, and overflowing demand in DC. If Baltimore were adjacent to DC, we'd be talking about how it's the next hot area, but it's about 40 miles away. Could faster, better transit whisk Baltimoreans down to jobs in DC?

(Maybe that's what Hogan has in mind with his $10 billion maglev, except he doesn't want to pay for it, it wouldn't go to the distressed neighborhoods, and Hogan just cut a transit line that would have.)

What if Maryland improved MARC speeds and frequencies to make the trains Metro-like. Would Washington-area housing demand flow into Baltimore? Richard Layman doesn't think so.

If it were that simple, it would already have happened. I reverse commuted to Baltimore for a time, and yes, Baltimore markets itself as a cheaper alternative for people working in DC, but it really stinks to spend a couple hours each way each day commuting, especially if one does it by sustainable means (bike/walk/transit).

As I wrote previously, Baltimore is undercut by massive overcapacity of development opportunity in the suburban counties, and great poverty and financial needs within the city, which outstrip its financial capacity. It lacks a transit network which would recenter demand on the center city, for both commercial and residential location.

Plus, while it has cool neighborhoods, the city is large and isn't so walkable between neighborhoods as much as it is within neighborhoods. EYA has a trademark, "Life within walking distance." Baltimore isn't set up that way.

Other contributors said that there might be a few spots where this could work, but they're nowhere near where Baltimore is tearing down blocks. Jeff La Noue:
From a Washington perspective, there are tons of super cheap and good looking row houses within walking distance of the West Baltimore MARC Station. That is a place that could seemingly develop market viability, but it needs some initial investment to get it going.

Photo by Ian Freimuth on Flickr.

Payton Chung:

Yes, the property surrounding the West Baltimore MARC station is surprisingly undervalued. However, Sandtown-Winchester won't be improved by transit anytime soon, since it opens a peculiar can of worms: Winchester Street runs atop the Penn Line's B&P tunnel, halfway between Baltimore Penn and West Baltimore, and which is the subject of multibillion-dollar replacement proposals.

Commuting from Baltimore to DC would be much easier if the last-mile transit connections were better. The transit connections and densities surrounding Baltimore Penn and Camden stations leave much to be desired, and Washington Union Station isn't convenient to most workplaces in DC.

Through-routing MARC trains down to L'Enfant Plaza and Crystal City would help, as will the streetcar and [potential] future Metro Loop. So will new office developments within walking distance to Union Station, in areas like NoMa and Capitol Crossing.

It seems Baltimore faces such a mountain of problems that these demolitions may be necessary. One can't help wonder if things would have been different if Baltimore had gotten a full subway system like the Metro, which was proposed around the same time.


The originally-proposed Baltimore Metro network.

And while the presence of the federal government kept Washington in better shape than Baltimore during the worst of times, the Metro elevated the value of downtown DC. Had it never been built, perhaps Washington would still be a "donut" of attractive suburbs around a continually decaying core with rising crime and insurmountable vacancy rates.

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