Addressing Baltimore’s Abandoned Housing
Abandoned housing has afflicted many Rust Belt cities since the mid-20th century as their populations declined and housing stocks aged. Many of these cities have attempted policy solutions to address excess abandoned housing due to its association with higher crime, lower nearby property values, and public health issues. In this post, we explore Baltimore's abandoned housing problem and how the city has addressed it with policy as well as a promising proposed strategy by a community organization.
Abandoned Housing: Causes and Consequences
An abandoned house refers to a vacant unit whose owner has neglected upkeep and the necessary steps to rent or sell it. Rust Belt cities that saw their populations plummet in the second half of the 20th century due to deindustrialization, middle-class outmigration, and neighborhood decline contained the most abandoned housing as of the early 2000s. Home prices and rents typically decline in shrinking cities experiencing lower housing demand, especially older units. Aging homes in these cities tend to be concentrated in lower-income neighborhoods where owners are least able to afford maintenance costs. As aging units in these neighborhoods begin to require prohibitively expensive renovations, demolitions, or tax payments for legal sale or lease, owners may prefer to abandon the property instead of risking further losses on their investment.
An abundance of abandoned housing can contribute to neighborhood decline and prevent revitalization by creating opportunities for property crimes (e.g., burglary, theft, arson), public disorder crimes (e.g., squatting, drug use, vandalism), as well as public health and safety hazards (e.g., fire, rodent infestation). Additionally, tax-delinquent abandoned properties place financial stress on local government revenues such that cities may raise property tax rates to compensate for foregone taxes and the costs of maintaining or demolishing units. Lastly, Hye-Sung Han finds that abandoned housing negatively impacted the prices of nearby properties in Baltimore from 1991 to 2010.
Baltimore's Abandoned Housing Problem
Baltimore's abandoned housing problem is the result of over 50 years of population decline, aging homes, and deferred maintenance.
Net outmigration results in a surplus of housing units, resulting in some homeowners abandoning their properties when they are unable to find buyers. Between 1970 and 2022, Baltimore lost 336,000 residents constituting roughly 37 percent of its population, which is comparable to peer Rust Belt cities such as St. Louis (-54 percent) and Philadelphia (-20 percent).
Homeowners will also be more likely to abandon their properties when required maintenance costs outweigh the expected sale price, which is more common in older structures. As of 2017, Baltimore had some of the oldest housing stock among major U.S. cities. Additionally, the older homes in the wider Baltimore metropolitan area have fallen into a higher state of disrepair than elsewhere in the country. According to Benjamin Lukas and Eileen Divringi, houses built before 1939 constitute 14.8 percent of the Baltimore metro area's housing stock with 50 percent of those units in need of repair at a median cost of $2,411 (compared to a national median repair cost of $1,566 for homes built before 1939).
As of 2022, Baltimore City had roughly 15,000 abandoned properties constituting between 7 and 8 percent of its total housing stock, representing the third highest rate of vacant and abandoned properties in the country. Johns Hopkins University estimates that abandoned properties cost the city over $100 million in lost revenue annually through foregone property taxes, income taxes, and water and sewer revenues.
The neighborhoods with the largest share of abandoned properties are majority-Black and impoverished such as Sandtown-Winchester/Harlem Park (31 percent), Southwest Baltimore (29 percent), and Greenmount East (27 percent).
Policy Actions to Address Abandoned Housing in Baltimore
Solutions to address abandoned properties include rehabilitating, rebuilding, or razing the structures. Over the years, Baltimore City government and community-based organizations have developed strategies to invest in abandoned properties with the goal of restoring private ownership, addressing repair needs, and improving neighborhood safety.
The Dollar House Program
In the early 1970s, hundreds of homes across Baltimore that were in the path of a major expressway construction project were seized by eminent domain and scheduled for eventual demolition. The road project was canceled abruptly in 1973, leaving numerous abandoned neighborhoods and derelict vacant rowhouses on the edge of downtown.
Baltimore City leadership responded by launching the Dollar House program. Properties were sold to "urban homesteaders" for $1 — provided the new owners committed to rehabilitate and reoccupy the house within a specified period of time. The city issued nontaxable bonds at 3 percent interest and then made 4 percent loans to the urban homesteaders to fund the rehabs.
The successful short-lived program is viewed nostalgically as helping to fuel the city's Inner Harbor renaissance of the 1980s. However, the program's success is attributed to some unique factors including proximity to the downtown business district, vacant houses concentrated in self-contained whole blocks, availability of low-interest city-backed loans, and dedicated technical assistance staff assigned to each rehab project. Subsequent efforts to recreate the Dollar House program have failed due to the absence of these specific components.
Vacants to Values
In 2010, Baltimore unveiled the Vacants to Value (V2V) program with the goal of accelerating redevelopment of the city's thousands of vacant properties. V2V's approach included financial incentives and expedited sales of city-owned properties; escalating fines to compel private owners to repair buildings; and court-appointed receiverships to sell to prequalified buyers for renovation. A 2015 report from the Abell Foundation determined that V2V's target strategy assisted the revitalization of some targeted neighborhoods but did not have a broader impact on other, more distressed blocks throughout the city.
The Whole Block Solution
In January, Baltimoreans United In Leadership Development (BUILD), a grassroots community coalition, released a report that found that 15 percent of the city's vacant properties are in otherwise relatively economically advantaged neighborhoods. Blocks with the remaining 85 percent of vacant properties are significantly distressed. These are neighborhoods most impacted by persistent poverty and the legacy of racial segregation. BUILD concludes that a more comprehensive strategy is required in these neighborhoods.
The proposed Whole Block & Whole Area Strategic Framework seeks to end the practice of incrementally rehabbing one or two rowhouses at a time or demolishing a portion of a block. BUILD finds that without simultaneously addressing underlying neighborhood conditions, 41 percent of these incremental rehabs risk becoming vacant again. Consequently, the strategy calls for the acquisition and control of all vacant structures and empty lots by a "special purpose entity," such as a Land Bank Authority or other quasi-governmental entity. These organizations are equipped with the resources to stabilize the entire block, which combined with early public investment, will attract reinvestment by increasing confidence in the sustainability of the entire neighborhood. Funding this approach citywide is projected to cost $7.5 billion, including the $2.5 billion in public capital, with the remaining leveraged through private investment.
Despite the large price tag, the BUILD proposal received preliminary support from Baltimore Mayor Brandon Scott at a community event in July. The Greater Baltimore Committee, the region's pro-business advocacy group, has also announced the formation of a steering committee, including BUILD participation, to further define a strategy and implementation plan.
Conclusion
Abandoned housing has been an issue in Baltimore since the 1970s which has burdened residents and been costly to the city in lost tax revenues. The city has historically targeted the issue with innovative yet incremental policies to varying degrees of success. More recently, BUILD's Whole Block Solution proposes a more holistic approach to revitalizing distressed blocks by investing in the future sustainability of individual neighborhoods.
