Why this city ‘removes cancer cells’ of foreclosed and abandoned homes

Posted at 9:39 PM, Nov 13, 2014

NEW YORK (CNNMoney) — In and around Cleveland, nearly 6,000 foreclosed and abandoned homes are being destroyed in an effort to save neighborhoods from blight, crime and sinking home prices.

Instead of trying to rebuild on these properties, however, the city has been turning the empty lots into parks, greenhouses, even vineyards.

“For the larger body — the neighborhood — to survive, you have to remove those cancer cells,” said Frank Ford, a policy adviser for the nonprofit Thriving Communities Institute of Cleveland.

During the housing bust, Ford worked at a community redevelopment group that renovated 50 foreclosed homes in Cleveland for $180,000 each. They sold the rehabbed homes for about $90,000 apiece, taking a $90,000 hit on each.

If they had spent that money to demolish nine or 10 foreclosed homes instead and turned the land into green space, it would have had an immediate beneficial impact, said Ford.

“There’s a direct relationship,” said Ford’s colleague Jim Rokakis, a director at Thriving Communities. “If there are two bad houses on a block, people will move away and their houses go vacant. Take them down and people will stay.”

In June 2013, Cuyahoga County, which includes Cleveland, was granted permission to use more than $10 million of Ohio’s Hardest Hit Fund money to tear down up to 1,000 abandoned buildings.

The Hardest Hit Fund, which was established by the Treasury Department in 2010, was initially set up to back efforts that prevented foreclosures. The money could be used to lower a troubled borrower’s mortgage balance, for example.

But in cities like Cleveland, there were so many blighted, vacant homes plaguing whole neighborhoods that funds started being reallocated toward demolition instead.

Tearing down houses has been so effective in Cleveland, that last month Cuyahoga County issued a $50 million bond so it can demolish another 5,000 houses, said Rokakis.

The house cleaning extends beyond Cleveland.

Michigan is using $175 million in Hardest Hit Fund money to demolish homes across 16 cities, including Detroit, Flint and Grand Rapids. In Detroit alone, where there are about 80,000 abandoned properties, 250 homes are being demolished a week.

Gary, Ind., is using $6.6 million in Hardest Hit funds to demolish 700 of its 8,000 vacant homes and buildings. Meanwhile, long suffering Youngstown, Ohio, is spending Treasury money to knock down a few hundred of its 4,000 vacant buildings, according to Councilman John R. Swierz.

Many of the emptied lots will be offered to neighbors who agree to maintain the properties. Others will be planted with trees or other plants.

Youngstown, which has seen its population fall by 60% since the 1960s, has even paid homeowners to relocate away from otherwise abandoned blocks so the city can shut down neighborhoods entirely, saving on sewer, sanitation, water and other services.

Back in Cleveland, big empty lots have been re-purposed into orchards, greenhouses and food production facilities, said Ford.

Entrepreneur Mansfield Frazier even founded a vineyard, called Chateau Hough after the neighborhood, on a three-quarter acre lot where a 30-unit apartment building once stood.

In 2010, the Cuyahoga County Land Bank said it would give Frazier the land if he could make a go of the vineyard within five years. He was able to claim it in three.

Excavating and planting the land was tough, though.

“Digging down, I found everything but dead bodies,” said Frazier. “I even found a kitchen sink.”

But the whole neighborhood pitched in — as did ex-cons from a nearby halfway house, who did much of the heavy work, and college professors from nearby Case Western University.

The vineyard’s impact on the neighborhood, long known for the 1966 racial riots, has been deep, said Frazer.

Chateau Hough produced its first wines last year and Frazier expects to produce about 1,000 bottles of the 2014 vintage and double that when the vines fully mature in a few more years.

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