Don't Fear the 'Dozer

Opinions are flying in the debate over whether or not ailing cities like Detroit should bulldoze their empty neighborhoods. John Kromer of the Fels Institute of Government adds a rational note with this op-ed, explaining what The Flint Model for shrinking cities actually entails.
Photo: John Kromer

The new policy sounds like urban renewal all over again: save older cities by bulldozing their worst-off neighborhoods. "Razing entire districts and returning the land to nature" is how a June 12 report in the London Telegraph characterizes a "shrink to survive" policy said to be under consideration by the Obama Administration.

Genesee County (MI) Treasurer Daniel Kildee, who supervises land-management activities in the distressed city of Flint, was named as a central figure in shaping this redevelopment-redux policy. "Mr. Kildee, you have been hired or asked by the Obama administration to bulldoze 50 cities," Rush Limbaugh stated in a June 17 web-site posting on "the Democrat Bulldoze Plan."

Urban-issues commentators weighed in with their concerns. "America is in peril of a Demolition Derby, financed by public dollars, striking many of our grand old cities," Roberta Brandes Gratz wrote in a June 18 Citiwire column, assailing the practice of "vast clearance" of neighborhoods to support the construction of "huge projects" such as convention centers and stadiums. In the June 22 Los Angeles Times, Gregory Rodriguez expressed fear that a "back-to-nature" federal policy of "de-urbanization" will undermine future opportunities to revitalize neighborhoods.

As a person who is well acquainted with Mr. Kildee's work, I can assure Mr. Limbaugh, Ms. Gratz, and others that they need not fear either reforestation or large-scale convention center development on viable urban tracts. Before I explain why, some perspective is needed.

Emptying Cities

Population loss has been a chronic condition in postindustrial cities for well over half a century. As national economies became globalized and the sun set on America's industrial age, businesses moved out of urban manufacturing centers, and millions of former city-dwellers followed the jobs. During the past decade, the rate of population loss has slowed in some cities, aided by the revitalization of downtowns and the resurgence of interest in traditionally designed, pedestrian-friendly neighborhoods. But no one expects postindustrial cities to return to the population levels that existed at mid-twentieth century, when Cleveland had 915,000 residents and Baltimore had 950,000 (the most recent census estimates for these two cities are 434,000 and 637,000). Older cities have already been shrinking for decades, without the help of a federal "shrink to survive" policy.

One consequence of persistent business loss and depopulation is the emergence of a growing number of unoccupied vacant residential and commercial buildings, many of which will remain vacant indefinitely. Some of the houses can be rehabilitated, and some of the former office and factory buildings can be redesigned as lofts, condominiums, art galleries, and restaurants. But many of these vacant buildings will have to be demolished. Last year, an administrator in Philadelphia's Department of Licenses and Inspections told me that city housing inspectors were identifying an average of thirty "imminently dangerous" buildings each month, an average of one a day. These structures are not fixer-uppers-they're about to collapse. Although a wholesale razing of neighborhoods would be foolhardy, some demolition activity will need to be ongoing in older cities in order to remove the most dangerous or most blighted buildings.

An even more serious consequence of business loss and depopulation is the erosion of the municipal tax base. As city leaders struggle to balance their budgets, many of them resort to auctioning off tax-delinquent properties, transferring title to the highest bidders, often without scrutinizing their background and experience as real estate investors or developers. As a result, some of the winning bidders at these auctions turn out to be speculators who convert single-family houses into overcrowded apartment buildings or allow their properties to remain vacant indefinitely.

Tax sale may be a relatively quick way for a city to raise revenues, but conveying properties to unknown bidders does not necessarily solve longer-term problems. According to a 2007 study completed by the Fels Institute of Government, some of the 782 properties that had been conveyed through Philadelphia tax sales during 2005 and 2006 were vacant or in violation of housing codes within less than two years after they had been sold.

The smartest investor-owners regard many properties in older cities as "undervalued assets" that, over time, are likely to increase in value and produce an economic success. Government officials in older cities aren't used to thinking this way. In their zeal to raise cash as quickly as possible, they squander the opportunity to manage their real estate assets strategically and maximize the prospects for both economic success and public benefit.

The Flint Model

As head of the Genesee County Land Bank Authority, Daniel Kildee has found a way to generate revenue for the City of Flint while increasing the value of Flint's real estate assets. At the start of each fiscal year, the Authority takes control of all tax-delinquent properties that would otherwise be sold at auction. The Land Bank Authority does not have to compete in bidding wars against speculators, and the City is paid all the taxes due on the properties taken by the Authority.

Then, in coordination with local government agencies and civic groups, the Land Bank Authority makes sensible, systematic decisions about the future of the properties it now controls. An empty house in move-in condition is assigned to a real estate broker, with net sales proceeds paid to the Land Bank Authority. A small vacant lot is sold to a neighboring homeowner for use as a side yard. In a typical year, 25 to 50 houses are rehabilitated for sale or rent. And some fire-damaged, structurally unsound, and severely dilapidated buildings are demolished in order to remove hazardous conditions and create cleared sites for new investment.

A growing number of local and regional leaders are exploring opportunities to replicate this model of successful reinvestment, and the Obama Administration is offering funding to governments that want to organize land banks of their own. The goal is neither reforestation nor wholesale razing of communities. Community preservation and the creation of new value are paramount. Wouldn't this rational approach to neglected-property disposition make sense in lots of disinvested communities?


John Kromer is Senior Consultant at the Fels Institute of Government, and is the author of Fixing Broken Cities: The Implementation of Urban Development Strategies.

Comments

Comments

Urban Growth Management

Louis Colombo
It would be useful to review stats regarding the change in population from the metropolitan areas in which these cities are located. If the metro population is growing, then a good program of urban growth management might be considered in terms of encouraging growth in the urban core. My experience in New Mexico is that the there are significant subsidies for development at the urban fringe - in the order of greater than $30k per single family house relative to an average new house cost of approx. $160,000. Simply eliminating these subsidies would have a great impact on the pattern of growth. Other regulatory and financial techniques are available.
In the longer term, this all points to the need for a national urban growth management policy.

Sprawl and growth management

L. Buhl
Louis Colombo is on the right track. Population statistics show that while Detroit's population has been shrinking since the 1950s, Metro Detroit's population has been growing over the decades. The problem with most of our rust belt cities is not post-industrialism as much as it is urban sprawl and, in Detroit, a serious racial divide. If there were growth management (such as urban growth boundaries) on a more regional level then the central city would probably be healthier. Unfortunately, planning for shrinkage is the only way to deal with the city we have and the city we will continue to have unless many factors change, including regional, state, and federal policies, as well as gas prices.

Urban Growth Management Political Process

Louis Colombo
Accepting "planning for shrinkage" because it is consistent for the "city we have" seems to preordain the inability to enact an urban growth plan. Prior to the Planned Growth Strategy adoption in Albuquerque, few would have considered the politics to be supportive of such an action. The effort to move in this direction is very difficult but not impossible. With Surdna Foundation support, I wrote up the political process of adopting the Albq urban growth plan, titled "Report from the Trenches". It can be read or downloaded at http://www.fundersnetwork.org/info-url_nocat2778/info-url_nocat_show.htm....

Here, surplus housing stock is a good thing

The surplus of housing here in Baltimore has been a fantastic benefit to the city in my opinion- it is relatively easy for young people to buy fix-er-uppers and even commercial or industrial properties and reinvent them as arts spaces, communal living lofts, theater venues, etc. As a result, Baltimore has an amazing art and music scene. Additionally, the census always undercounts Baltimore. My census block group - an area of about 4 blocks has HUNDREDS of people living here (hundreds of artists in coops or rental lofts and a few dozen families in row houses) and has since the early 80s. According to the 2000 census, 3 people live in this block group, when there are more than 3 people living in this apartment! similarly, the census reports a relatively small hispanic population here when in reality activists estimate 80,000 undocumented hispanic immigrants. So, while there is a surplus of housing it a) isn't a bad thing and b) isn't as much of a surplus as people think. My recommendation here (obviously not in detroit) would be to put a moratorium on demolition so we have the housing when we need it and in the mean time encourage developers to create different housing typologies than the ones that have proven unsuccessful here (i.e. single family houses, which make up most of the abandoned housing units). Stop building one kind of housing and those who want it will purchase the pre-existing surplus.

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