2015, October 11 | Sunday 3:52 pm

by Peter Samuel

City officials propose to form another outfit to fight blight – a Blighted and Vacant Properties Review Board (BAVPRB). A report to the Mayor and Board states the functions of the new board as:

(1) review at least quarterly the city’s Blighted Properties List to see if current anti-blight policies are workingBVPRC

(2) recommend particular additions to and subtractions from the blighted buildings (blighteds) List

(3) recommend extra properties for the List (overlaps with 2)

(4) review the status of any ‘condemned’ property and recommend ‘applicable strategies’

(5) get input from Neighborhood Advisory Councils (NACs) on additions and subtractions from the List

(6) monitor status of long vacant (>3 years) properties after a ‘methodology’ for such monitoring has been developedBl3Asiana

(7) make timely recommendations to the Mayor and Board on strategies to reduce longterm vacant properties (vacants)

(8) report annually on longterm vacants

(9) the Board is said to “have the ability to take a comprehensive review” of blighteds and vacants and the trends and make recommendations on “a comprehensive approach.”

The Board of seven will include a residential and a commercial realtor, a real estate attorney, a non-profit banker, and two ordinary citizens.

Some vacants OK

Vacant buildings are not all bad. A certain inventory of vacant buildings is helpful in allowing occupants to have choice, competitive prices, and the opportunity to move in immediately – and therefore make an area attractive. Ready availability of building space can reduce the pressure to be rushed into a property buy and reduce business risk allowing prospective owners to shop around for financing. So vacants are, up to a point a positive, not necessarily a problem. But longterm vacancies suggests over-supply relative to demand.

Longterm vacants can and often do become blights.

Blights rightly a public issue

Blights are a pressing political issue because neighbors hate them, and Bl5W6thLogrightly so. They ruin the look and the ambiance of places around them. They depress the livability and values of neighbors, whether businesses or residential. Casual walking shoppers will turn around if they come across blighted buildings adversely affecting businesses beyond. People living near blighted buildings feel ashamed of their surrounds and don’t invite friends and family to visit. And so they become isolated socially. Health and safety can be jeopardized by blights. They can attract vermin and vagrants.

Like other issues that generate emotion blight is a great subject for people to pontificate and posture about.

Who is to blame? What to do?

Do something politicians must.

Here the city officials are establishing a new ‘review board.’ Looking at its functions listed above a lot of its activity will be refining existing the City lists of blights, perhaps making it more comprehensive and keeping it more up-to-date.Bl1

Measuring and documenting the what of the problem may be a necessary activity but it is not sufficient. That’s the What of the problem.

The why of the problem

The big issue is the Why of the problem. Why is there blight?

The City’s review board will bring new opinions on Why to the issue – board members themselves, and neighbors via the NACs.  Notably absent from the list of opinions being sought are opinions of the owners of the blighted buildings.  What do they say about why their buildings remain blighted. Why can’t they fix them up. Surely that’s important to getting a grasp on the Why of the problem.

An economics perspective 

Buildings are usually blighted because the income they can generate after being fixed up is less than the cost of fixing them up – that’s simple and commonsense economics.  As soon as there are activities, renters or buyers for blighted buildings which will generate income to cover the costs of de-blighting, then the blight will go away via rehabilitation or reuse.

So the review board would be useful if it could systematically address what needs to be done on the demand side and on the supply side to make de-blighting pay.

Bl2What government reforms can help enhance the attraction of the area and its ability to earn a better return for the owner: Better policing? Better streets? Improved services? More local jobs? A better mix of services? Better links to jobs in the larger Washington/NoVA/Baltimore metro area? More affordable taxes?  Market-driven parking in place of coercive mandates and

On the other side of the ledger the review board could consider what local government can do to reduce the costs of rehabilitation and restoration – removing blight. In Frederick City we suffer a serious case of over-regulation, starting with the Historic Preservation Commission (HPC), moving to the Planning Commission (PC), the Board of Zoning Appeals, Building Plan Review etc etc.

HPC the blight king

The HPC is a primary generator of blight via:

- its resistance to demolition often essential for viable rehab and reuse of a blight

- its prescription of more expensive, less cost-effective features and materials

- its opposition to additions to buildings and more intensive use of a site

- its time consuming procedures

- its frequent effort to micromanage other people’s projectsBl4CmacJ

The Planning Commission/BZA complex is similarly a major obstacle to redevelopment, and removal of blight. Its maze of zoning restrictions limit the ability of a property owner to respond to customer demand, and impose major costs on anyone attempting to improve and adapt their property.

A recently published econometric study found what its authors call ”striking” results comparing heavily regulated versus lightly regulated municipalities. Lead author Matthew Turner of Brown University:

“There is a clear decrease in land values as we cross into more heavily regulated municipalities. There is also a steep decline in the share of land developed in more regulated municipalities. In short, the own-lot effect of land-use regulations is clearly negative and sufficiently large to warrant concern. More surprising, we find that prices drop slightly as we move further into the interior of more regulated municipalities. That is, land-use regulations seem to be having a negative external effect. This suggests that the regulatory burden may be high enough that it reduces people’s willingness to maintain or improve their properties. In this case, as we travel into more regulated municipalities, we are likely Bl6E5th107to be traveling into neighborhoods that are less well maintained.” (references below)

“Land Use Regulation and Welfare” by Matthew A Turner, Andrew Haughwout, and Wilbert van der Klaauw, Econometrica 82/4, July 2014 p1341

http://www.econ.brown.edu/fac/Matthew_Turner/papers/published/Turner_Haughwout_vanderKlaauw_ECT_2014.pdf

and a more digestible summary here

http://www.perc.org/articles/economics-land-use-regulations 

These kind of findings suggest major potential benefits in simplifying, consolidating and reducing regulation of city real estate. A further benefit would be the opportunity to cut the City payroll, and have many paper pushing regulators in local government redeployed from their present net value destroying activity to productive work elsewhere.

The City’s past ‘ad hoc’ committee scarcely glanced within

The City’s own Blighted and Vacant Property Ad Hoc Committee 2012-2014 generally avoided any consideration of the role of its own agencies, regulations and taxes. The exception was a passing reference in the Phase 1 Commercial Property report which cited (p7) “Fear of building codes/costs/fees/impact fees etc,” “property tax penalties” and “zoning Mapcode use list” among the causes of vacancies and blight. (Slapdash writing is indicated in many random capitalizations and the odd use of slashes instead of commas.)  The Phase 2 Residential Property report contains not a hint that any fault might be found city government.

If the new blight review board limits itself to simply finessing the blighted property list and playing populist politics, avoiding the need for substantial reform of government itself, then it will not help the blight problem. More populist politics, righteous vilification of ‘slumlords’ and more severe fines on owners of blighted buildings will mean more property abandonment, and more decrepit buildings in government ownership.

Other views

https://www.facebook.com/FrederickCityBlight

http://www.cityoffrederick.com/?NID=651

http://www.cityoffrederick.com/DocumentCenter/Home/View/1770

- editor 2015-10-11

 

 

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