Housing USA: Baltimore

6 min read

“Vacants to Value” Experiment

During an era of urban renaissance, and while sitting within one of America’s most prosperous regions, Baltimore has managed to become the nation’s biggest tragedy. In the last three years, it has grown into the most violent major city, setting a city record for murders in 2017. The heroin epidemic is glaring at street level, with an estimated eight percent of citywide population addicted to the drug. In some neighborhoods there is visible disorder, which alludes to a larger crumbling civic infrastructure, from schools that can’t provide heat in the winter, to police who won’t stop open-air drug sales. It really isn’t surprising, given these conditions, that the city broke out into riots three years ago.

And this is reflected, predictably enough, in the built fabric of the neighborhoods where people and businesses have escaped. Baltimore has 16,500 vacant buildings, which are found throughout the city, but particularly on the east and west sides. The multi-block stretches of empty formstone and brick rowhomes might be one of the city’s saddest features; areas that could embody historic, walkable urbanism instead sit hollowed out.

What is the city to do about all these structures, when the blight itself results from more deeply-rooted civic and social issues? Well, there is no easy fix, but one thing the city has tried is the Vacants to Value program (V2V).

Launched in 2010, it was the signature housing policy of ex-mayor Stephanie Rawlings-Blake. The program, which is administered by Baltimore’s Department of Housing & Community Development, offers various incentives to homebuyers and developers to fix up vacant properties. For developers, it provides a Newly Constructed Dwelling Tax Credit, where the first owner-occupant buyer after rehab gets a 50 percent property tax reduction the first year, and a ten percent reduction by year five. For homebuyers, it offers a number of different incentives, depending on their circumstances – $10,000 in downpayment assistance; a $5,000 “Buying into Baltimore” grant; a $5,000 loan through the CDBG Homeownership Program; and $6,000 through the Live Near Your Work program, which is a grant paid out equally between the city and a homebuyer’s employer.

V2V focuses not so much on the lost blocks of Baltimore, where derelict rowhomes stretch side-by-side by the dozens, but on blocks that offer the prospect of recovery. These blocks may have some units that are occupied and others that are vacant. The city’s goal is to activate the vacant ones, to make these areas more functional overall.

Code enforcement, namely of the carrot-and-stick variety, has also been a major feature of V2V. The program aims to reduce the regulatory burden for incoming buyers who want to purchase and improve a property. But absentee landlords who sit on their properties face the prospect of penalties or confiscation. As Next City’s Oscar Perry Abello wrote in 2016:

“One of the unexpected pillars of the program has been the city putting properties into receivership, obtaining court orders to force owners to make repairs or auction off properties to a new private owner. Before 2010, the city never filed more than 100 receivership cases in a year; in the first four years of the program, the city filed 1,876 lawsuits against private property owners.”

Focus on Rehab
Under current mayor Catherine Pugh, Baltimore’s blight eradication strategy has moved more towards demolition, sometimes of entire blocks. But the V2V program remains active, and its primary focus is still rehab.

Over these eight years, the program has had mixed results. Perhaps the biggest flaw—as pointed out in separate reports by the Abell Foundation and the Baltimore City Paper—is that it suffers from bad data and misinformation. Following the first four years, the city claimed that V2V had helped rehab 1,585 homes; an independent analysis found that number was 906, or possibly less. Some of the homes that the city claimed to have rehabbed through V2V turned out, upon investigation, to not even be residential properties – but were instead auto repair shops, hair salons and warehouses.

That aside, the rehabs that have occurred are helping the city – and the total number is now up to 4,200 (inside and out of V2V). An area where V2V has performed particularly well, according to a city report, are the neighborhoods directly north and east of Johns Hopkins Hospital, which have seen $35 million in current or anticipated private investment. Like much of Baltimore, these are dense, highly-urbanized neighborhoods that could theoretically attract professional-class medical workers.

They’re still too dangerous for this, but have made obvious strides in cleanliness and population since I last visited them six years ago.

V2V thus appears to be a cost-effective urban revival measure, at least when it actually does lure in investors. For as little as $10,000—which is negligible compared to other housing programs—the city is, through a piecemeal approach, reducing blight, adding foot traffic and bringing new housing onto the market.

Not a Panacea
But V2V isn’t going to be a panacea. After the program’s eight years, Baltimore has only 300 less vacant structures than it did in 2010, when the city was getting hit by the recession. For every empty building that gets rehabbed or demolished, a new one pops up due to the city’s population decline.

“The city faces two principal obstacles to putting a dent in that [vacant building] number any time soon,” writes Ian Duncan for the Baltimore Sun. “The lengthy legal process it must follow to take control of buildings, and the rate at which people are leaving Baltimore – creating new vacants.”

And that speaks to the bigger cause behind Baltimore’s vacancy problem, beyond the efficacy or not of any one program. The city has been losing population for decades now, and conditions here are arguably worse than ever before. If the city wants investment in its toughest neighborhoods, there’s only so much it will be able to do to motivate investors, via programs like V2V. To create actual market demand, it needs to restore the quality of the areas – by cleaning the streets, enforcing laws, and improving the schools. But for the Baltimore neighborhoods that already offer these qualities at some minor level, V2V is a relatively cheap strategy for incremental improvements.