Four U.S. mayors discuss strategies to tackle rapidly declining neighborhoods that have been hit with vacancies and foreclosures.
Given the economic situation, U.S. municipalities find themselves with dwindling public revenue streams exactly when more programs and support are needed to address the rapid increase in vacancies and foreclosures and their deleterious effects. Last fall, public and private sector leaders from across the country gathered at the ninth annual ULI Shaw Forum to provide strategic advice to the cities, counties, and states that are hoping to make the most of their allocated funding through the U.S. Department of Housing and Urban Development’s neighborhood stabilization program. But more broadly, the forum’s participants discussed the deep and multifaceted needs of neighborhoods that are facing rapid decline.
A panel discussion at the forum included four mayors—John S. Brenner of York, Pennsylvania (currently director of development for the Pennsylvania League of Cities and Municipalities); Patricia P. Christensen of Port St. Lucie, Florida; Carleton S. Finkbeiner of Toledo, Ohio (whose term expired last November); and Joey Torres of Paterson, New Jersey—who are intensely aware of the deleterious impacts that large numbers of vacant and foreclosed properties can have on a neighborhood. All four mayors have shown their cities’ capacity to partner creatively with nonprofit organizations, state and federal agencies, and the private sector to develop a robust set of tools to address the widespread challenges facing these neighborhoods.
Can you tell us what this vacancy and foreclosure crisis looks like on the ground in your community? Carleton S. Finkbeiner: We define the neighborhoods we’re trying to address in Toledo, Ohio, as “tipping point” neighborhoods. These are surviving middle-class neighborhoods that, as a result of the decline in the automobile industry, are beginning to fall in status. Without some nurturing, these are places that could go from surviving to being dominated by rental properties that are often owned by absentee landlords who have no knowledge about Toledo.
I don’t know that we can do too much about the economy—we’re an automobile-dominated city—we certainly aren’t going to have an influence over people’s buying and selling of automobiles. The foreclosure situation is a tragedy, but it is what it is. The one thing we might be able to do is take advantage of this. Our homebuilders have been building further and further out in suburbia. This is a chance to reverse that. With brownfield and urban schools money available to us, we’re hoping to tip the scale to make it easier to build infill in Toledo. Patricia P. Christensen: Port St. Lucie is the tenth-largest city in Florida. We are a developer-developed community. We have a number of new communities in an area called Tradition, where the bulk of the homes were purchased with sub-prime mortgages. If you drive down the streets of that area today, you will find that only about 10 percent of the homes are occupied. The other foreclosure problem we have is in the older part of the city, which transpired when the city was hit by three hurricanes in 13 months. We saw the foreclosure crisis there when homeowners collected their insurance payments on the hurricane damage and then walked away from their homes. We’ve focused our foreclosure prevention efforts in the older part of the city, and to date, we’ve purchased 30 homes; ten of those homes were torn down because of extensive hurricane damage.
John S. Brenner: York is located in south-central Pennsylvania. My first challenge as mayor when I took office in 2002 was to take a look at the area’s vacant and blighted properties. Every block had one or two boarded-up properties. We realized that we didn’t even have the tools to track these properties. We worked with the University of Pennsylvania to develop a study of York’s vacant properties. We had 350 vacant properties then. We began by addressing 208 properties by inspecting them and assessing their potential for purchase and rehabilitation. Our biggest problems with vacancy are in the southern part of the county where people who work in Baltimore, Maryland, bought homes because they were affordable and now they’re finding themselves upside-down in their mortgages. Joey Torres: We have to consider that not everyone is cut out to be a homeowner. We can’t solve everything at once. We need to start working within smaller, defined areas. You need to go in and stabilize urban neighborhoods. This work is like attempting to find the leak in the dam and stick your finger in it. As one house goes, the rest of the neighborhood goes.
What are the private sector partnerships that are crucial to successfully working on neighborhoods with high vacancy rates? Finkbeiner: We’ve got to get the Realtors involved in marketing these neighborhoods. Realtors are, of course, not doing well in this economy, so they’re looking for help and new partnerships. For the first time, they’ve come to the city looking for help and support, and we’re doing a program called “Dream to Own” to provide down-payment assistance in some of our neighborhoods. We put together a consortium that includes the private sector, the nonprofit sector, and the faith-based community that meets every two weeks to solve problems collaboratively. Brenner: We have a similar group called Better York that meets every month. It includes all the business owners, the philanthropists, and the major employers in town. The Realtors and bankers are active in that group, and they’ve been very helpful to us. Christensen: We started growing relationships with our banks after the hurricane damage and before this economic downturn. We started a program after the blight caused by the hurricanes where we would declare the home a health and safety hazard. If we couldn’t get the bank that owned the property to address these safety issues, then the city would go in and drain the pool, board up the windows, replace the roof, secure the garage, and assess a non ad valorem tax on the property to recoup those costs. Originally, the banks tried to fight the charges, but when they started losing those fights in court, they started partnering with us.
Now that the crisis has gotten worse—we have over 6,000 foreclosures in our city—as soon as we determine which bank is actually the titleholder on a property, that bank goes in with a management company to do basic maintenance to secure the house. It’s been a struggle with the banks being bought out and closed.
What are the political pressures you face in trying to address these issues? Christsensen: All of our money is being spent in just one district, but it’s done with the support of all four districts. There is political pressure from residents who question why we can’t use these funds to conduct foreclosure prevention before people lose their homes. Brenner: The average person in our community doesn’t understand the complexity of these federal stabilization programs. What they do understand is the tried-and-true model of community development block grants (CDBGs). If you want the money on the street, give it to cities through a flexible tool like CDBGs and we’ll go out there and attack the blighted properties faster. Use the tools that already exist. The average person doesn’t understand the federal program restrictions. They see the vacant house down the street, and they don’t call the governor, they don’t call their representative in Congress, they see their mayor on the street or at the grocery store, and they come up to me and ask me what we’re going to do about the problem. Torres: I went to my tax assessor’s office and got a list of our vacant properties, and we plotted those out. I told our council people from the other wards that we can’t put money into every ward; we have to focus it on the areas that need it the most. In Paterson, our program calls for the purchase and then rehabilitation or demolition/construction of homes that have been vacant for at least a year. We’re just going to keep moving from block to block to address this.