Vacant Properties in Baltimore City: Practical Solutions to City Revitalization

Eleanor M. Brown

Salisbury University Maryland Department of Juvenile Services

Abigail S. Roswell

Kenyon College Maryland Department of Commerce

Kylie M. Schade

Stevenson University Maryland Department of Labor, Licensing, and Regulation

Morgan T. Smith

St. Mary’s College of Maryland Maryland Department of Veterans Affairs

Governor’s Summer Internship Program August 10, 2018

Governor’s Reception Room

Maryland State House

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Acknowledgements

Our policy group would like to thank the contributors to this policy analysis by which our paper would not have been possible. Their experience, knowledge, and guidance were instrumental to our personal growth and

development as future agents of change within the State of Maryland.

Kevin Baynes

Director, Office of Community Programs MD Department of Housing & Community Development

Roger Campos

Assistant Secretary MD Department of Housing & Community Development

Luis O. Cardona

Director, Economic Development Downtown Baltimore

Marcie Castaneda

Manager, CORE Business & Community Development MD Department of Housing & Community Development

Councilwoman Mary Pat Clarke

Councilman, District 14 Baltimore City Council

John David Evans

Director, Analytics and Strategic Planning Baltimore Department of Housing & Community

Development

Leila Kohler-Frueh

Director, Community Development Habitat for Humanity of the Chesapeake, Inc.

James Piper-Bond & John Huffington

President & CEO; Director, Workforce Development Living Classrooms Foundation

Cindy Plavier-Truitt & Diana Ellis

Senior Vice President; Chief Business Officer Humanim

Jay Price & Marcia Collins

Bureau Head, Water/Wastewater; Chief, Legislative Affairs Baltimore City Department of Public Works

Wendi Redfern-Curtis & Rashelle Caselestin

Deputy Commissioner; Data Analyst Vacants to Value

Martin Schwartz

President & Manager Vehicles for Change

A thank you to our internship placement department secretaries and mentors.

Sam J. Abed Secretary of Juvenile Services

MD Department of Juvenile Services

R. Michael Gill Secretary of Commerce

MD Department of Commerce

Kelly M. Schulz Secretary of Labor, Licensing, and Regulation

MD Department of Labor, Licensing, and Regulation

George W. Owings III

Secretary of Veterans Affairs MD Department of Veterans Affairs

Gavin Patashnick

Director, Legislation and Policy MD Department of Juvenile Services

James Palma

Senior Manager, Policy, Research, & Government Affairs MD Department of Commerce

Mike Pantelides

Executive Director, Small Business Regulatory Assistance MD Department of Labor, Licensing, and Regulation

Dana Burl Director, Outreach and Advocacy

MD Department of Veterans Affairs

A special thank you to the people who made this program possible.

The Honorable Larry Hogan Governor

State of Maryland

Hannah Schmitz Coordinator, Public Service Scholars

The Shriver Center at UMBC

The Honorable Boyd Rutherford Lieutenant Governor

State of Maryland

Dr. Laura Hussey Associate Professor, Political Science

University of Maryland, Baltimore County

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Table of Contents Executive Summary 3 Background 3 Problem Definition 4 Relevant Efforts - State of Maryland 7 Governor Hogan’s Project C.O.R.E. Initiative 7 Land Banking 8 Relevant Efforts - Baltimore City 9 1973 “Dollar House Program” 9 Vacants to Value 9 Relevant Efforts - Local Nonprofit Organizations 10 Habitat for Humanity of the Chesapeake Inc. - Homeownership Program 10 Humanim 11 Living Classrooms Foundation 11 Civic Works 11 Policy Alternatives 12 I. Increased Interagency Communication 12 II. Increased Nonprofit-Private Partnerships 12 III. Continuation of Project C.O.R.E. 13 Analysis and Implementation Issues 15 I. Increased Interagency Communication 15 II. Increased Nonprofit-Private Partnerships 15 III. Continuation of Project C.O.R.E. 16 Recommendation 17 Conclusion 17 Bibliography 18 Contacts 21

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Executive Summary The number of vacant structures and lots in Baltimore City steadily increases within

neighborhoods beyond commercial or residential revival. As of 2018, Baltimore City had approximately 16,640 vacant properties, which was an increase from 16,000 the year prior1. Vacant properties pose threats to the security and functionality of the neighborhoods in which they reside, and overall property values continue to decrease2. In this paper, we evaluate the vacant property crisis and introduce practical solutions for revitalization. We will present economically sound and socially conscious solutions along with viable policy alternatives. The first alternative suggests increased interagency communication among local, city, county, and state governmental entities regarding vacant properties. The second alternative promotes the partnership between nonprofits and private developers to revitalize areas of urban blight with low residential and commercial market value. The third policy recommendation suggests the trajectory for the next phase of Project C.O.R.E. Following an analysis of each policy alternative, we recommend increased nonprofit-private partnerships.

Background The rise in Baltimore City’s vacant properties stems from economic, political, and

socioeconomic divisions within its residents. During Baltimore City’s peak residential population in the early twentieth century, the manufacturing and shipping industry was booming. After World War II, Baltimore City became “ensnared by global forces that deindustrialized its economic engine — the steel plants — and destroyed its manufacturing sector” which led to “high unemployment rates, quickening when wealthier residents fled for the suburbs or other areas amid a citywide population exodus.” 3 Baltimore City lost 10,000 people in the 1950’s and 35,000 in the 1960’s. This led to weakened property values which exacerbated the vacant property crisis.

Then in the 1970’s, Baltimore City purchased neighborhoods for demolition in preparation for the construction of I-170, but failed to construct the aforementioned interstate, leaving the properties to sit vacant. The failed demolition of these vacant properties worsened the crisis. As vacant numbers grew, property tax revenue decreased. Because schools are funded primarily by local property taxes, the decline in tax revenue contributed to the decrease in the quality of education provided locally. Likewise, vacants began to attract crime and other problems which drove inhabitants of these failing neighborhoods to the suburbs to raise their families in a secure environment. During the 1990’s, Baltimore City became known as the “most drug addicted and most violent city in America.”4

Since the beginning of the 2000’s, Baltimore City’s Inner Harbor has undergone mass urban revitalization, transforming the vacant manufacturing sector into a center of arts and entertainment, luxury apartment complexes, and tourist attractions. Though this progress has assisted in addressing urban blight, the number of neighborhoods plagued by vacant properties

1 City of Baltimore Data. (2018). Vacant Buildings. Open Baltimore. Retrieved July 5, 2018 from https://data.baltimorecity.gov/Housing-Development/Vacant-Buildings/cext-wn76 2 Klein, A. (2017, January). Understanding the True Costs of Abandoned Properties: How Maintenance Can Make a Difference. Community Blight Solutions. Retrieved July 3, 2018 from http://www.communityblightsolutions.com/files/CBS_White_Paper_2017.pdf 3 McCoy, T. (2015, May 12). Baltimore has more than 16,000 vacant houses. Why can't the homeless move in? The Washington Post. Retrieved July 23, 2018 from https://www.washingtonpost.com/local/baltimore-has-more-than-16000-vacant-houses-why-cant-the-homeless-move-in/2015/05/12/3fd6b068-f7ed-11e4-9030-b4732caefe81_story.html?noredirect=on&utm_term=.55be86097ffe 4 City of Baltimore. (n.d.). The History of Baltimore. The City of Baltimore Comprehensive Master Plan (Final Draft). Retrieved July 24, 2018, from https://planning.baltimorecity.gov/sites/default/files/History of Baltimore.pdf

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continues to increase. Therefore, these communities face a decrease in commercial and residential market value.

According to Maryland’s Department of Housing and Community Development (DHCD), “Baltimore City has 297 distinct neighborhoods, of which 120 are in a stressed housing market.” According to Baltimore City’s 2014 Housing Market Typology, a “stressed neighborhood is one where 6% to 30% of the housing stock is vacant.”5 Baltimore City reports roughly 16,000 vacant properties which it defines as “unoccupied structures that are unsafe or unfit for human habitation or other authorized use.” 6

Problem Definition As of July 2, 2018, Baltimore City had 16,640 vacant structures.7 Baltimore City’s Building

Code “defines residences as vacant only if they are uninhabitable, not if they are merely unoccupied.”8 Several problems arise when a property becomes uninhabitable. The U.S. Department of Housing and Urban Development reports that “a vacant property becomes a problem when the property owner abandons the basic responsibilities of ownership, such as routine maintenance or mortgage and property tax payments.”9 There are four main problems that stem from vacant housing: reduction in property value of surrounding homes, increased crime, increased probability of fire, and reduced tax base for local governments.10

When a structure becomes vacant, the market value of the surrounding homes decreases. “A study of Baltimore finds that this impact is confined to within 250 feet of properties that have been abandoned for less than 3 years; after 3 years, however, the impact can extend as far as 1,500 feet.”11

Additionally, vacant structures lead to increased crime because of the Broken Windows Theory, which states “one sign of abandonment or disorder (a Broken Window) will encourage further disorder.”12 As the number of vacancies increases, there are “fewer neighbors to monitor and combat criminal activity. Boarded doors, unkempt lawns, and broken windows signal an unsupervised safe haven for criminal activity or a target for theft.”13 Vacants are associated with higher levels of illegal activity such as prostitution, drug sales, and drug usage as well as homicides and shootings.14

5 Aisenstark, A. (2016, September 12). Building, Fire, and Related Codes of Baltimore City (Rep.). Baltimore City Department of Legislative Reference Website. Retrieved July 26, 2018, from https://health.baltimorecity.gov/sites/default/files/Art 00 - Bldg, Fire.pdf 6 Aisenstark, A. (2016, September 12). Building, Fire, and Related Codes of Baltimore City (Rep.). Baltimore City Department of Legislative Reference Website. Retrieved July 26, 2018, from https://health.baltimorecity.gov/sites/default/files/Art 00 - Bldg, Fire.pdf 7 City of Baltimore Data. (2018). Vacant Buildings. Open Baltimore. Retrieved July 5, 2018 from https://data.baltimorecity.gov/Housing-Development/Vacant-Buildings/cext-wn76 8 Office of Policy Development and Research U.S. Department of Housing and Urban Development. (2014). Vacant and Abandoned Properties: Turning Liabilities Into Assets. U.S. Department of Housing and Urban Development. Retrieved July 10, 2018, from https://www.huduser.gov/portal/periodicals/em/winter14/highlight1.html 9 Office of Policy Development and Research U.S. Department of Housing and Urban Development. (2014). Vacant and Abandoned Properties: Turning Liabilities Into Assets. U.S. Department of Housing and Urban Development. Retrieved July 10, 2018, from https://www.huduser.gov/portal/periodicals/em/winter14/highlight1.html 10 Klein, A. (2017, January). Understanding the True Costs of Abandoned Properties: How Maintenance Can Make a Difference. Community Blight Solutions. Retrieved July 3, 2018 from http://www.communityblightsolutions.com/files/CBS_White_Paper_2017.pdf 11 Office of Policy Development and Research U.S. Department of Housing and Urban Development. (2014). Vacant and Abandoned Properties: Turning Liabilities Into Assets. U.S. Department of Housing and Urban Development. Retrieved July 10, 2018, from https://www.huduser.gov/portal/periodicals/em/winter14/highlight1.html 12 Kelling, George L., Wilson, James Q. (1982). “Broken Windows: The Police and Neighborhood Safety,” The Atlantic Monthly 249:3, 29–38. 13 Office of Policy Development and Research U.S. Department of Housing and Urban Development. (2014). Vacant and Abandoned Properties: Turning Liabilities Into Assets. U.S. Department of Housing and Urban Development. Retrieved July 10, 2018, from https://www.huduser.gov/portal/periodicals/em/winter14/highlight1.html 14 Office of Policy Development and Research U.S. Department of Housing and Urban Development. (2014). Vacant and Abandoned Properties: Turning Liabilities Into Assets. U.S. Department of Housing and Urban Development. Retrieved July 10, 2018, from https://www.huduser.gov/portal/periodicals/em/winter14/highlight1.html

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Likewise, vacant structures pose a structural threat to surrounding properties, specifically row home structures, due to their connecting features. With failing infrastructure, vacant structures become fire hazards. Between the years 2011 and 2015, there were an estimated 30,200 vacant structure fires per year nationwide.15 “A 2009 study from Baltimore concluded that each vacant property on a block increased annual police and fire expenditures by $1,472.”16

The locations of vacant homes are heavily concentrated in Baltimore City’s west side as well as to the east of downtown as illustrated by the darker shaded regions in Figure 1 below. These neighborhoods include Sandtown Winchester, Central Park Heights, and Harlem Park, Midtown Edmondson. This figure highlights the number of vacant blocks per neighborhood.17

Figure 1: Vacant Row Structures per Neighborhood in Baltimore City, MD18

15 Aderns, M. (2018). Fires in Vacant Buildings. NFPA Research. Retrieved July 5, 2018 from https://www.nfpa.org/-/media/Files/News-and-Research/Fire-statistics/Occupancies/osvacantbuildings.pdf 16 Winthrop, B. & Herr, R. (2009). “Determining the CO$T of Vacancies in Baltimore,” Government Finance Review, 25:3, 39. 17 City of Baltimore Data. (2018). Vacant Buildings. Open Baltimore. Retrieved July 5, 2018 from https://data.baltimorecity.gov/Housing-Development/Vacant-Buildings/cext-wn76 18 City of Baltimore Data. (2018). Vacant Buildings. Open Baltimore. Retrieved July 5, 2018 from https://data.baltimorecity.gov/Housing-Development/Vacant-Buildings/cext-wn76

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Finally, vacant structures negatively affect a city’s tax revenue. There are approximately

600,000 Baltimore City residents, a dramatic decline from Baltimore City’s population peak in the 1950’s of approximately 1.1 million residents. Although the population of Baltimore City has declined significantly, Baltimore City infrastructure has remained at the level to serve 1.1 million people. The U.S. Department of Housing and Urban Development reports that “cities that have lost half or more of their peak populations have a far larger housing supply, transportation and utilities infrastructure, and service area than they have people to use and pay for them.”19 According to conversations with Downtown Baltimore, of the 600,000 residents currently residing in Baltimore City, only 400,000 can contribute their share of the tax base. The lack of tax revenue has led to dissolving infrastructure, underfunded public schools, and a rise in vacant structures.

Relevant Efforts - State of Maryland

Governor Hogan’s Project C.O.R.E. Initiative

In 2016, Governor Hogan reported that Project C.O.R.E. (Creating – Opportunities – for Renewal – and Enterprise) would partner with Baltimore City to “remove blight through demolition or stabilization as a catalyst for redevelopment and reinvestment.”20 Governor Hogan allocated 75 million dollars from the state budget towards Project C.O.R.E., which was then combined with 25 million dollars in-kind relocation and emergency demolition funds from Baltimore City. According to the Maryland DHCD, the state leveraged 600 million dollars through Project C.O.R.E. to encourage new investment in these blighted communities.21

Additionally, Project C.O.R.E. oversees its Maryland Microenterprise Loan Program which “provides entrepreneurs with flexible financing for microenterprise start-ups and expansions within designated Sustainable Communities and Priority Funding Areas.”22 The loan “expands opportunities for microenterprise development, creates new opportunities for small business development, and sustains local economies in Maryland communities.”23 For a small business to qualify, the business must have no more than five employees, be in a designated Sustainable Community area, cannot exceed $500,000 in annual revenue, and be in the retail, manufacturing, or goods & services industries. This private-public partnership supports micro-entrepreneurs running small businesses within their communities, further expanding economic growth.

19 Office of Policy Development and Research U.S. Department of Housing and Urban Development. (2014). Vacant and Abandoned Properties: Turning Liabilities Into Assets. U.S. Department of Housing and Urban Development. Retrieved July 10, 2018, from https://www.huduser.gov/portal/periodicals/em/winter14/highlight1.html 20 Department of Housing and Community Development. (2018). Project CORE Quarterly Report. State of Maryland. Retrieved June 25, 2018 from http://dhcd.maryland.gov/ProjectCORE/Documents/CORE_QuarterlyReport_FY18_Q2.pdf 21 Department of Housing and Community Development. (2018). Project CORE Quarterly Report. State of Maryland. Retrieved June 25, 2018 from http://dhcd.maryland.gov/ProjectCORE/Documents/CORE_QuarterlyReport_FY18_Q2.pdf 22 Maryland Department of Housing and Community Development. (2018). Microenterprise Loan Program. Maryland Department of Housing and Community Development. Retrieved July 26, 2018, from http://dhcd.maryland.gov/Business/Pages/microenterprise.aspx 23 Maryland Department of Housing and Community Development. (2018). Microenterprise Loan Program. Maryland Department of Housing and Community Development. Retrieved July 26, 2018, from http://dhcd.maryland.gov/Business/Pages/microenterprise.aspx

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Figure 2: First Project C.O.R.E. demolition in the 1000 block of N. Stricker Street in Sandtown-Winchester 24

Land Banking Utilized by Maryland municipalities, land banking serves as a mechanism for addressing

and controlling urban blight while also restoring vacant properties. Through land banking, municipalities “take ownership of abandoned, tax-delinquent, and unmarketable properties and transform them into viable, tax-positive, and marketable properties.”25 Under the 2017 Maryland General Assembly House Bill 1168 / Senate Bill 0957 approved by Governor Hogan, “a county or municipality, or two or more acting together, can create a land bank authority. The land bank is able to take ownership of property that has tax or water and sewer liens on it as an alternative to the traditional tax sale system. Then, if the property is determined to be vacant or blighted, the taxing authority is authorized to forgive the tax liens, enabling the land bank to sell or otherwise transfer that property to a new owner.”26

24 Project C.O.R.E. (2016, January 5). Governor Hogan, Mayor Rawlings-Blake Partner Address Blight in Baltimore City, Announce State Project. Maryland Department of Housing and Community Development. Retrieved August 1, 2018, from https://news.maryland.gov/dhcd/2016/01/05/governor-hogan-mayor-rawlings-blake-partner-address-blight-in-baltimore-city-announce-state-project/ 25 Morrison, E. M. (2016). Bank on it: Preventing re-blight and avoiding costly litigation in modern land baking. University Of Toledo Law Review, 48(1), 137-167. 26 Blackner, E. (2017, October 4). MD law allows county to consider land banks for blight mitigation. The Sentinel Newspapers. Retrieved July 24, 2018, from http://www.thesentinel.com/pgs/news/local/item/4114-md-law-allows-county-to-consider-land-banks-for-blight-mitigation

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Relevant Efforts - Baltimore City

1973 “Dollar House’ Program” In 1973, Baltimore’s City Council launched the “Dollar House” Program as a tool for urban

revitalization within struggling neighborhoods. The program focused on City-owned neighborhoods originally purchased for demolition. The land would have made room for the intended construction of interstate I-170 which would have linked I-70 to I-95, but was stopped by then Councilman Barbara Mikulski, in response to community concerns regarding the project. Property residents were relocated by city officials for the construction of the highway, so the City was left in control of the vacant properties once plans for construction halted.

Baltimore City sold approximately 180 rundown houses for one dollar to buyers. Per conversations with Councilwoman Clark, the owners received a low-interest loan to rehabilitate the purchased property with conditions of a set residency period. This initiative focused on the Barre Circle, Otterbein, and Ridgely's Delight neighborhoods. The “Dollar House” Program was successful in terms of transferring a portion of the houses from being city-owned to bank or citizen owned. It offered low barriers to homeownership, clustered properties and provided direct loans from the city. Finally, it established a dedicated “Dollar House” Program office to support developers and architects.27

Despite the success, the program was only a temporary solution. The successfully rehabbed properties were only vacant for a brief period, instead of decades, which is the current condition for the vacant housing crisis in Baltimore City. Unless modified, the “Dollar House” Program is only feasible in targeted areas of the City.

In 2017, Baltimore City residents living in blighted communities called for a renewal of the “Dollar House” Program as a mechanism for neighborhood revitalization. On October 30, 2017, Baltimore’s City Council unanimously passed “A “Dollar House” Program for the 21st Century” resolution spearheaded by Councilwoman Mary Pat Clarke, District 14. The resolution would revitalize marginal neighborhoods with the creation of affordable housing for workers' families and neighbors.”28 The implementation of the updated program is pending.

Vacants to Value Founded in 2010 under former Baltimore City Mayor Stephanie Rawlings-Blake, Vacants

to Value is Baltimore City’s initiative for reducing blight. Vacants to Value aims to redevelop and clean up vacant properties to attract new residents and businesses that will create community amenities. In return, this raises property values, subsequently increasing the local tax revenue.

Vacants to Value highlights seven strategies for ensuring community clean-up and quick, efficient, economically-conscious redevelopment of vacant structures. First, they strive to streamline the disposition of city-owned properties meaning they want to make the transferring of ownership as quick and simple as possible. Secondly, they strive to streamline code enforcement in stronger markets. In doing this, Vacants to Value ensures code enforcement in different market conditions so houses in specific neighborhoods will sell to homebuyers who would otherwise be living in these neighborhoods. Third, Vacants to Value works on

27 Goodman, S. B. (2009, April 29). History of the Dollar Home in Baltimore. Baltimore Housing Overstock. Retrieved June 26, 2018 from https://dollarhomes.wordpress.com/2009/04/29/history-of-the-dollar-home-in-baltimore/ 28 Clarke, M,, (2017, October 30). City Council Resolution 17-0037R. Baltimore City Council. Retrieved July 10, 2018, from https://baltimore.legistar.com/LegislationDetail.aspx?ID=3128180&GUID=09DF2A71-AD6B-470F-A894-DC3D2ED573F4

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facilitating investment in emerging markets. This means they want to make up and coming neighborhoods look attractive to homebuyers, developers, and investors.

Vacants to Value also works on targeting home buying incentives to attract potential homebuyers to buy a property that might need a little more work than one in a different zip-code. In addition, they are supporters of large-scale redevelopment in distressed areas to continue City revitalization while attracting potential residents. For the blocks that are beyond commercial or residential rehabilitation, they support demolishing those properties and maintaining the lots. This is more environmentally friendly than leaving decrepit properties standing and is better for both public health and safety. When Vacants to Value can rehabilitate a block, however, they usually provide concentrated sustainable home and neighborhood improvements that both benefit the environment and improve public health.

Vacants to Value also controls their Baltimore Homeownership Incentive Program.29 This incentive program is made up of three parts: Buying into Baltimore and City Living, Community Development Block Grant (CDBG) Homeownership Assistance Program, and the Vacants to Value Booster Program. Buying into Baltimore and City Living provides a $5,000 incentive towards buying a home in Baltimore City. Furthermore, the CDBG Homeownership Assistance Program targets first-time home buyers who have a total family income at or below 80% of the area median income. Currently, that means their income falls below $44,750 for an individual income or $63,900 for a family of four. The program provides a $5,000 down payment and closing cost assistance to families who qualify. Lastly, the Vacants to Value Booster Program provides eligible homebuyers with $10,000 towards closing costs for the purchase of a formerly vacant home. In total, the Baltimore Homeownership Incentive Program works to attract families to buy properties in the city, especially vacants, to raise the number of residents in at-risk neighborhoods.

Unless otherwise cited, the following information stems from conversations with personnel at Vacants to Value. Vacants to Value’s Adopt-A-Lot Program/Community Gardens initiative transformed 790 previously vacant lots into green spaces for purposes such as recreation and urban farming. This program allows for community partners to take complete care of each lot and individually determine how they would like to use the space without having full ownership of the property.

Relevant Efforts - Local Nonprofit Organizations

Habitat for Humanity of the Chesapeake Inc. - Homeownership Program Habitat for Humanity of the Chesapeake Inc., a nonprofit based in Baltimore City, focuses

on “eliminating substandard housing locally and worldwide through constructing, rehabilitating and preserving homes; by advocating for fair and just housing policies; and by providing training and access to resources to help families improve their shelter conditions.”30 Since 2003, Habitat’s Homeownership Program has transformed vacant properties into new, affordable homes for partner families in the Washington Village “Pigtown” Neighborhood.

The program’s criteria include: ability to pay, need for decent housing, and willingness to partner. To qualify as a Habitat partner family, potential homeowners must participate in Habitat’s Homebuyer Academy, where homeowners learn the skills necessary to successfully

29 Vacants to Value. (2018). Vacants to Value- B-HiP. Retrieved July 10, 2018, from http://www.vacantstovalue.org/Incentives.aspx 30 Support Habitat Chesapeake today! Habitat for Humanity of the Chesapeake, Inc. Retrieved June 26, 2018 from https://www.habitatchesapeake.org/about/habitat-Chesapeake

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own and permanently maintain a home through a 50-hour course. During the restoration or construction stage, future homeowners invest 250–350 volunteer hours, referred to as “sweat equity,” on the building and/or renovation of their future Habitat home, with the majority of these properties being previously vacant structures. Then Habitat sells the home to the partner family at an affordable rate with a no-interest mortgage. To qualify, home buyers must earn 30 to 80 percent of the area’s median income.

Humanim Unless otherwise cited, the following information derives from conversations with Cindy

Plavier-Truitt and Diana Ellis at Humanim. Humanim “builds pathways to employment, personal autonomy, and economic opportunity for individuals who face social or economic challenges.”31 Humanim’s social enterprises, Details Deconstruction and Brick + Board, involve the reclaiming of bricks and wood from Baltimore City’s vacant structures. The tactic of the two programs benefits people from the community through training, while recycling materials from buildings with historic meaning.

Living Classrooms Foundation Unless otherwise cited, the following information derives from conversations with John

Huffington at Living Classrooms. In partnership with Project C.O.R.E., Living Classrooms Foundation operates a program called Project S.E.R.V.E. (Service - Empowerment - Revitalization - Volunteerism - Employment Training). Participants in the program acquire trade and workforce development skills through on-the-job training. This program aims to impact the “aesthetic nature of city neighborhoods” by cleaning roughly 4,000 public properties with their “Clean Team.”32 Living Classrooms’ leadership believes their programs can create stabilization in both their participants’ lives as well as communities by utilizing their workforce development skills to complete facade improvements on City blocks.

Civic Works Serving under AmeriCorps, Civic Works “strengthens Baltimore’s communities through

education, skills development, and community service” with an emphasis on job training, skills development, and community service.33 In 2015, Civic Works provided 234 AmeriCorps members with service opportunities such as: seven conversions of vacant lots to green spaces, repairing or weatherizing 436 homes, making 5,894 households more energy efficient, and growing 39,731 pounds of fresh produce.34

Policy Alternatives

I. Increased Interagency Communication We recommend increased communication between local, city, county, and state agencies

working to address vacancy. This, in turn will remove lien costs therefore, enticing developers

31 Humanim. (2018). What We Do. Humanim. Retrieved July 26, 2018 from http://humanim.org/ 32 Huffington, J. (2018). Our Programs - Project SERVE. Living Classrooms Foundations. Retrieved July 19, 2018 from https://www.livingclassrooms.org/ourp_project_serve.php 33 Civic Works (2018). Introducing Civic Works. Civic Works. Retrieved July 26, 2018 from https://civicworks.com/about-us/ 34 Civic Works (2016). Civic Works FY15 Annual Report (Rep.). Civic Works. Retrieved July 26, 2018 from https://civicworks.com/wp-content/uploads/2014/08/Civic-Works-FY15-Annual-Report-web-1.pdf

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to purchase tax sale properties for redevelopment. Increased communication would prevent the need for liens to be issued for unpaid charges allowing for speedier receivership processes.

Currently, Baltimore City’s vacant properties have an active water billing account with the city’s Department of Public Works. Unless the property owner has closed the account, a neighbor reports leakage impacting their property, Baltimore City’s Department of Housing and Community Development has placed a vacancy notice on the property, or the account becomes delinquent due to failure of payment, which causes a tax sale. According to Baltimore City’s Department of Public Works, after $750 of unpaid bills, it deems a property delinquent. Baltimore City’s Department of Finance then places a lien on the property. Baltimore City’s Department of Finance removes the lien when the property’s owner prevents the highest bidder from obtaining ownership by "redeeming" the property during the city’s annual tax lien certificate sale. Ownership is then granted when the unpaid charges are paid.

Baltimore City’s Department of Housing and Community Development communicates vacant statuses to the Department of Public Works. However, if communication is increased, it would allow for the timely closing of the water bills associated with vacant properties.

II. Increased Nonprofit-Private Partnerships

With the success of nonprofit organizations in rehabbing vacant structures and lots within Baltimore City, agencies would benefit from nonprofit organizations strengthening their partnerships with private developers. The City would benefit from gifting current City-owned properties, specifically in areas of urban blight with low residential and commercial market value, to nonprofit organizations with certain conditions agreed upon through a contract. The advancement of nonprofit programs that can result from minimal additional space would increase exponentially with more land, especially that that is subsidized. Due to the limited financial resources nonprofit organizations possess, nonprofit organizations could develop vacant properties into revived lots for multi-use purposes, spaces for transitional homes, or affordable housing, through established partnerships with private developers.

Vacant Lot Revival: If the City partnered with nonprofit organizations, they could revive many of the vacant

lots in Baltimore City. Through an open-bid proposal process, Baltimore City would grant receivership of vacant lots to nonprofit organizations. Nonprofit organizations would be encouraged to build community centers, especially if one is not available within walking distance of the blighted communities. Community centers could offer services such as case management, education, and employment readiness services, as well as food pantries and hygienic services.

Additionally, urban agricultural farming could be introduced to reduce the incidence of food deserts. The U.S. Department of Agriculture defines food desert as, “parts of the country vapid of fresh fruit, vegetables, and other healthful whole foods, usually found in impoverished areas.”35 This gives communities greater access to healthy food and increase community value.

Per conversations with community stakeholders, Baltimore City has a vested interest in remaining the owner of vacant properties throughout the city. Under the discretion of the Land Resources Division, Baltimore City currently provides long-term leases to nonprofit organizations for City-owned properties at an annual rate of one dollar. As an alternative for

35 Gallagher, M. (2010). USDA Defines Food Deserts. American Nutrition Association. Retrieved July 17, 2018 from http://americannutritionassociation.org/newsletter/usda-defines-food-deserts.

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granting full receivership of vacant lots to nonprofit organizations, we propose the expansion of this lease program.

Transitional Homes for Returning Citizens: Stable housing is vital for returning citizens with felony convictions because it provides

returning citizens security and an address to provide to future employers. It is necessary to ensure a successful community transition. Per conversations with Living Classrooms, we were advised that stable housing improves both physical and mental health and can improve the success of returning citizens.

Living Classrooms’ Project S.E.R.V.E., Humanim, and Vehicles for Change serve returning citizens and emphasize the need for transitional housing. Homes such as Henrietta Lacks House for men and the Marian House for women provide transitional home services. However, the amount of transitional homes in Baltimore City is lacking. If vacant properties are gifted to nonprofit organizations, they could establish transitional housing to aid the approximately 8,000 returning citizens coming into Baltimore City annually. Transitional housing would strengthen communities while reducing recidivism rates.

Affordable Housing: Nonprofits, such as Habitat for Humanity of the Chesapeake, have successfully revitalized

blocks of vacant properties into affordable residential housing. If city-owned vacants were placed with nonprofit organizations that have successfully rehabbed vacant properties in Baltimore City, the City would see a decrease in vacant properties and a possible influx of residents into neighborhoods that were previously empty. Baltimore City should enact procedures and regulations for the nonprofits to follow to ensure that the vacant lots do not remain vacant to further address the presence of urban blight. Additionally, procedures and regulations would assist in decreasing land banking strategies and sustain current efforts in addressing this crisis.

III. Continuation of Project C.O.R.E. Project C.O.R.E. funding should renew with a total budget of 100 million dollars and be

split evenly each year for the next four fiscal years. With the initial stages of Project C.O.R.E. completing all available emergency and full vacant block demolitions, we propose a shift in focus to include addressing business development, food insecurity, workforce development, homeownership opportunities, and demolition.

Business Development: Through the Maryland Department of Human Services initiative, Public Assistance to

Entrepreneurship (PA2E), individuals are transitioned off the Supplemental Nutrition Assistance Program (SNAP) to employment. This “8-week curriculum program is designed to train, consult, and develop business skills.”36 Project C.O.R.E. could establish a competition contest for PA2E graduates in which competitors would present business plans that meet the requirements of the Maryland Microenterprise Loan Program. Rather than a loan, winners would receive micro grants up to $5,000 per startup. Through Project C.O.R.E.’s current efforts, a 75 million-dollar investment into Baltimore City has been granted. We propose an

36 Smith-Bligen, N. (n.d.). Department of Human Services Family Investment Administration (Rep.). Maryland Department of Human Services. Retrieved July 26, 2018 http://mdhungersolutions.org/pdf/MFANN -Nicholette-Smith-Bligen.pdf

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emphasis on return-on-investment through the increased expansion of recruitment efforts for attracting small business owners into the City. This could be achieved through the renewal of the Maryland Microenterprise Loan Program. By having small businesses become established within state designated Sustainable Communities and Priority Funding Areas, community anchors will be created, increasing the tax base potential within these neighborhoods. We emphasize this need as a way to encourage increased business’ investment in Baltimore City.

Food Security: We recommend combining the Maryland DCHD’s “Maryland’s Fresh Food Financing

Initiative” into Project C.O.R.E. as a mechanism for addressing food insecurity. Currently this program finances loans up to $300,000 for small businesses seeking to offer healthy food options within food deserts and sustainable communities. We propose the program’s transition from a loan initiative into a grant program with an additional focus of attracting commercial grocery stores.

With Baltimore City’s infrastructure, certain areas of the city receive limited sunlight, so the promotion of rooftop agricultural farming could serve as an additional solution. This model would work best in the City’s neighborhoods which have already undergone revitalization.

Additionally, Baltimore City utilizes contractor soil through MSA to fill the vacant properties’ imprint. This regulation mandates the growing of grass on a vacant lot for the property to be deemed as a complete demolition. However, contractor soil is not multifaceted and does not foster crop growth. If Maryland local, county, and state entities were mandated to use organic soil for filler, opportunities to utilize the lot for options such as urban agriculture would become available. This would serve as a sustainable alternative for these vacant lots, specifically within food deserts.

Workforce Development: Per conversations with Project C.O.R.E. employees, 20 percent of C.O.R.E.’s funding is

dedicated to workforce development. Through Humanim’s enterprise, Details, returning citizens “plan the removal of the project, take it apart piece by piece, and salvage the materials for reuse and recycling.”37 Building upon this model, we propose the expansion of memorandum of agreement opportunities for nonprofit organizations seeking grants to increase their workforce development programming, not solely limited to Humanim.

We propose the expansion of The Baltimore Wood Project, collaboration between Humanim, the U.S. Forest Service, Parks and People, Baltimore City, and the State of Maryland through Project C.OR.E. This project salvages urban wood removed from abandoned Baltimore city row homes for resale, through Humanim’s Details Deconstruction and Brick + Board programs. “Humanim estimates that for every one job created by a demolition project, deconstruction creates six to eight positions while keeping thousands of pounds of materials out of landfills.”38 If Project C.O.R.E. were to increase program funding, valuable architectural products could be salvaged for resale, providing greater revenue in return.

This could include expanding the current partnership with Living Classrooms’ Project S.E.R.V.E. Currently, Project C.O.R.E.’s funding supports programs focused on providing job-

37 Humanim (2018). Details Deconstruction. Humanim. Retrieved July 26, 2018, from http://www.details.org/ 38 Wittkopf, J. (2018, June 13). Salvaging Baltimore with the U.S. Forest Service. Retrieved July 19, 2018 from http://humanim.org/news/salvaging-baltimore-with-us-forest-service/

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training experiences to unemployed and disadvantaged adults, specifically returning citizens, through demolition assistance. Per conversations with Living Classrooms, if grant funding was made available to increase workforce development opportunities for Project S.E.R.V.E. participants, Living Classrooms would continue to succeed. Most importantly, we also emphasize the need for new nonprofit organizations to establish memorandum of agreements with Project C.O.R.E. whose mission is to link disadvantaged persons with employment opportunities.

Homeownership: We recommend the implementation of Maryland’s Departments of Public Safety and

Correctional Services and Maryland’s Community and Housing Development’s proposal to create a pre-release homeownership program for returning citizens preparing for reentry into the community. This program would train incarcerated individuals on pre-release on building and maintaining previously vacant homes. Upon release, the returning citizens could purchase the homes they rebuilt and maintained for $100. This initiative would lead to an increase in the quality of life for the returning citizen population, who might otherwise face housing discrimination based upon their background.

Demolition:

We recommend increased compliance of Environmental Protection Agency (EPA) and Maryland Stadium Authority (MSA) regulations regarding vacant property demolition for local, county, and state entities. The remediation of lead-based paint 39 and asbestos40 drives costs per EPA and MSA regulations to $30,000-33,000 for Project C.O.R.E.’s vacant structure demolition. Baltimore City’s approximate cost is 13,000 dollars. Accounting for discrepancy, developers are deterred from purchasing properties from the City due to the additional expenses needed to clear the lot before development can ensue.

39 United States Environmental Protection Agency. (2017, August 30). Renovation, Repair and Painting Program. United States Environmental Protection Agency. Retrieved July 18, 2018, from https://www.epa.gov/lead/renovation-repair-and-painting-program 40 Percciasepe, B. (2017, June 12). EPA's Notification of Rules and Regulations Regarding the Demolition of Asbestos-Containing Structures, and Related Questions and Answers. United States Environmental Protection Agency. Retrieved July 18, 2018, from https://www.epa.gov/asbestos/epas-notification-rules-and-regulations-regarding-demolition-asbestos-containing-structures

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Figure 3: 2018 Project C.O.R.E. demolition41

Analysis and Implementation Issues

I. Increased Interagency Communication Per conversations with the Baltimore City Department of Public Works (BCDPW), they

are advised by the Baltimore City Department of Housing and Community Development (BCDHCD) as to which structures are vacant. However, communication lacks between BCDHCD and BCDPW and needs to increase. Additionally, BCDPW does not currently have the capacity to identify newly vacant properties due to limited funding, jurisdiction, and manpower. Increased communication between agencies lies within the local, city, county, and state entities’ capacity. Because the policies we suggest the administration stress regarding vacant properties are already being implemented, the agencies facilitating these policies must possess a modicum of the resources needed for proper execution.

41 Project C.O.R.E. (2018, July 17). FY18 Q3 Quarterly Report. Maryland Department of Housing and Community Development. Retrieved

August 1, 2018, from http://dhcd.maryland.gov/ProjectCORE/Documents/CORE_QuarterlyReport_FY18_Q3.pdf

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Increased communication between state agencies would be considered socially acceptable. Since policies already passed would be implemented to a higher degree through increased communication, only executive oversight is necessary. Additionally, this policy ensures that local and city jurisdictions operate effectively. Timely communication between DHCD and DPW would allow for the timely closing of the water bills associated with vacant properties preventing the issuance of a property lien, therefore attracting potential developers.

II. Increased Nonprofit-Private Partnerships If partnerships between nonprofit organizations and private developers were strengthened,

these entities could revitalize vacant properties for multi-use purposes such as revived lots, transitional homes, or affordable housing. Baltimore City currently controls many of the vacant properties, but does not have the capacity to redevelop. However, nonprofit organizations have both the capacity to rebuild and the strong partnerships with private developers, as well as the firsthand knowledge of their community’s needs. Private developers offer means of large-scale funding for revitalization projects as well as bringing resources such as legal counsel, architectural expertise, “bonding,” and efficiency.

As the City already unofficially provides a one dollar annual lease fee to qualifying nonprofit organizations for City-owned vacant properties, they are not accruing high revenue. With nonprofit organizations partnering with private developers, the City would see an increase in tax revenue and residents. Additionally, nonprofit organizations could combat multiple issues at once through their resources and programming capabilities. Nonprofit organizations can provide resource centers within walking distance of at-risk communities which would be socially acceptable to citizens of Baltimore City, as well as nonprofits who work to provide more for their neighborhoods.

While this policy alternative would please human rights advocates, neighborhoods, and nonprofit organizations due to the ability to give more to the community than they currently can give the space allotted, it could prove to be problematic when convincing Baltimore City to hand the vacant properties over. However, the city will be negotiating contracts with each nonprofit organization which will assist in maintaining a level of control over the situation, and the long-term benefits will affect the entire city positively.

III. Project C.O.R.E. Continuation

Per conversations with Project C.O.R.E. experts, we were informed that Baltimore City and Governor Hogan agreed to additional phases as Maryland currently has the funding capacity for its continuation. However, our policy alternative highlights possible means of expanding the program as it currently stands. Without a fiscal analysis, we cannot state for certain if Maryland has the capacity to adapt our recommendations.

This recommendation proves to be universally accepted by both key decision makers of Baltimore City and state legislators as they have agreed to the continuation and funding of Project C.O.R.E. As Project C.O.R.E. partners with nonprofit organizations, such as Living Classrooms Foundation, it is assumed that key collaborators are also accepting of the continuation as it will provide a means of improving the community. Some neighborhoods and individuals will be welcoming of the continuation of Project C.O.R.E. as it provides more means of benefiting and improving what currently exists in the City, cultivating community relationships, and providing higher value and security where it is needed most. The remaining

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individuals will resist continuation of Project C.O.R.E. since the successful partial-block demolitions requires relocation.

Unfortunately, this alternative bears the potential need for increased funding and the relocation of citizens. However, it will be socially accepted due to its ability to increase resources provided to at-risk populations, benefit the economy, and improve access to community anchors.

Recommendation Overall, we recommend increased nonprofit-private partnerships as the strongest

mechanism for combating the vacant property crisis. If vacant property turnover to nonprofit organizations increased during the next four years of Project C.O.R.E, then timely and effective vacant property revitalization would occur. While concerns over large-scale budget funding are valid, nonprofit organizations are eligible for greater grant funding accessibility while partnering with private developers. This allows for nonprofit organizations to increase their stake in the City’s revitalization through an increased focus on their clientele’s long-term success. The City would see a growth in the economy if it invests in implementing this policy alternative.

Conclusion Due to limited interagency communication, capacity capabilities, and access to resources,

coupled with a lack of complete oversight, the vacant property crisis continues to grow within Baltimore City and the surrounding areas. Despite Project C.O.R.E.’s successes in completing all emergency and full block demolitions, combined with their outreach initiatives, the next phases will prove to be integral for community partnerships and development. Creating anchors within at-risk neighborhoods will increase opportunities for business expansion, workforce development, and means of obtaining security. Policy solutions such as adding increased nonprofit-private partnerships to existing vacant property initiatives have the most promising chance of being both socially acceptable and within local, city, county, and state capacity.

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Contacts

For more information regarding our policy paper, please contact us:

Eleanor M. Brown Salisbury University Social Work and Political Science; Psychology eleanorbrown22@gmail.com Abigail S. Roswell Economics (Public Policy) Kenyon College abigailroswell@gmail.com Kylie M. Schade Business Administration Stevenson University kylieschade@gmail.com Morgan T. Smith St. Mary's College of Maryland Public Policy and Political Science (American Politics); Mathematics smithmt_@outlook.com