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Mayor Announces “Vacants to Value” Plan to Reduce Blight

Initiative is projected to trigger rehabilitation of more than 1,000 vacant buildings and leverage $70 million in private investment.

BALTIMORE, MD. (November 3, 2010)- Mayor Stephanie Rawlings-Blake joined Baltimore Housing Commissioner Paul Graziano to announce a new integrated effort to reduce vacant housing and urban blight in Baltimore. As a result of one of the largest percentage declines in population among major U.S. cities from 1950 to 2000, Baltimore is now challenged with approximately 16,000 vacant buildings, roughly 25% of which are city owned. Baltimore Housing estimates that more than 5,700 of the vacant structures are in areas with existing or emerging development demand.

Mayor Rawlings-Blake said reductions in crime and improved public schools, have made it more attractive, in recent years, for families to relocate to and remain in Baltimore. She said City government must do "everything it can to spur growth and reinvestment" by:

Streamlining the sale of vacant city property.
Strengthening code enforcement efforts in transitional blocks and emerging markets to promote rehabilitation.
Providing new, targeted incentives for homebuyers and developers who invest in vacant homes. The package of incentives includes a new $5000 forgivable loan program for City Police, Firefighters, and Teachers that purchase or rehabilitate vacant homes.

Mayor Rawlings-Blake outlined a detailed 6-point strategy to reduce blight, which is projected to cut the transactional time of selling city property by two-thirds, increase the number of vacant city properties sold, and commence rehabilitation of more than a thousand vacant buildings within first year of the program.

"The simple truth is that urban blight in Baltimore is a problem of too much supply and not enough demand," Mayor Rawlings-Blake said. "That's why the 6-point plan to address blight that I'm unveiling today recognizes and respects the role of the marketplace, and ensures that City Government is positioned to facilitate and drive targeted reinvestment. The six strategies are fully integrated, and one city agency will be responsible-improving accountability, efficiency and transparency."

Strategy 1: Streamline the Disposition of City Property

"First, City Government will get its own house in order so that we can efficiently dispose of City-owned property and get it into the hands of those both willing and able to renovate and invest," Rawlings-Blake said. The mayor announced a total restructuring of Land Resources staff and business processes at Baltimore Housing, including a new Deputy Commissioner for Land Resources and a newly-hired team of experienced real estate marketing professionals. Mayor Rawlings-Blake also said the team will launch a new website to help market and sell vacant city property more effectively.

Mayor Rawlings-Blake unveiled new policy reforms approved by the City's Board of Estimates today, including: a new uniform appraisal policy, a new sale by live auction process, consolidation of property inventory into one agency, and an expedited lien abatement process. Taken together, the policy reforms are expected to reduce transactional time by at least two-thirds.

"Markets and investors need and deserve more transparency and predictability with these transactions. With these new policies in place, they will have it," Mayor Rawlings-Blake said. "This strategy alone will increase the number of city properties marketed and ready for purchase and ultimately increase the number of city properties sold."

Strategy 2: Streamline the Code Enforcement on Transitional Blocks

Mayor Rawlings-Blake said the administration has improved code enforcement efforts on "Transitional Blocks", areas that are mostly occupied but challenged by a number of scattered vacant structures. Of the 16,000 vacant buildings in Baltimore, almost a third, 5000, are located in these areas, according to a Baltimore Housing market analysis. Baltimore Housing will implement an automated enforcement regime issuing $900 fines to promote rehabilitation of vacant structures instead of pursuing costly and slow legal battles with landowners by taking each case to court.

Mayor Rawlings-Blake said the new targeted code enforcement effort "will pressure absentee landowners and speculators to do a cost/benefit analysis and either reinvest in their properties to avoid more fines or sell them to someone who will. Because this effort is primarily targeted in areas with development demand, when properties turnover or if a landowner chooses to reinvest, there is an existing market for the properties."

Strategy 3: Facilitate Investment in Emerging Markets:

The "Vacants to Value" program will deploy expert code enforcement attorneys to facilitate investment in emerging markets near areas of strength. There are roughly

700+ vacant buildings in emerging markets, according to a Baltimore Housing market analysis. "Emerging markets are areas where smaller private and nonprofit developers believe they can make a difference." Mayor Rawlings-Blake said. "The City will work in partnership with committed and capitalized developers to leverage reinvestment, block by block, without major taxpayer subsidies."

Strategies 2 and 3 alone will promote rehabilitation of more vacant, boarded buildings the any previous blight elimination program to date and will trigger the rehabilitation of more than a thousand vacant buildings in the first year of the program, according to Baltimore Housing projections.

Strategy 4: Homebuyer and Developer Incentives

The Rawlings-Blake administration has created a new package of targeted incentives for homeowners and developers who renovate vacant properties, including an allocation of $500 thousand to a new incentive called the Good Neighbors Program, which provides a $5000 five-year forgivable loan for 100 City Police Officers, Firefighters, and Teachers who purchase a vacant property in Baltimore. This incentive will assist buyers with down payment and closing costs.

Additionally, Baltimore Housing has packaged four more homebuyer incentives, totaling roughly $1 million, for individuals who purchase vacant or newly-rehabilitated homes. "In total, the programs will provide up to 300 homebuyers a real, tangible incentive to invest in Baltimore," Mayor Rawlings Blake said. Baltimore Housing will also establish a new $1 million revolving loan fund to provide short term liquidity for small developers and contractors who rehabilitate vacant properties in emerging markets and transitional blocks.

Strategy 5: Support Large-Scale Redevelopment in Distressed Areas

Over the past decade, the City, working with private and public partners, has embarked on a number of large scale redevelopment such as EBDI, Uplands, Barclay, Poppleton, and Orchard Ridge that are transforming Baltimore's landscape for the better. Major redevelopments are important because they have a ripple effect that goes beyond their individual boundaries and spur reinvestment in surrounding neighborhoods.

"Neighborhoods that were once called the 'badlands' are now shining beacons of hope, brimming with new investment," Mayor Rawlings-Blake said. "My administration will continue to support large-scale redevelopment efforts in very distressed areas without current market demand. This is a strategy where smart planning, government intervention, and private/public partnerships are absolutely necessary."

Strategy 6: Maintain, Clear and "Land Bank" for Interim and Future Use

In areas where the scale of blight far exceeds development demand for housing for the foreseeable future, Baltimore Housing will focus on maintaining, clearing and holding-or "land banking"-vacant property for future use. The strategy includes targeted demolition, boarding and cleaning, and creative interim uses including creating new community green space where demand for housing doesn't yet exist.

Mayor Rawlings-Blake said local government and local investors alone cannot address large scale urban blight and support of state and federal government is critical. Mayor Rawlings-Blake pledged to use her position on the U.S. Conference of Mayors Task Force on Vacant and Abandoned Properties to lobby the federal government for capital support for acquisition and demolition of vacant houses and blight in American cities.

Vacants to Value Summit

Mayor Rawlings-Blake said Baltimore Housing will host a Vacants to Value Summit with national experts in urban housing issues to solicit feedback and engage the community and private sector partners interested in working with the City to reduce blight. "This is the beginning of a new effort, not the end. I welcome new ideas and tactics that will support this overall strategy going forward," Mayor Rawlings-Blake said. Details about the summit will be announced in the coming weeks.

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