In 2010, there were 10.3 million vacant homes in America. Many are vacant as a result of foreclosure, and they’re costing municipalities at a time when public budgets are already strained to the breaking point.
A new report from the Government Accountability Office (GAO) examines trends in the number of vacant properties, how they relate to the recent increase in foreclosures, the cost of maintaining and administering these properties and strategies for coping with the crises. GAO analyzed Census Bureau vacancy data and data on property maintenance costs from the Federal Housing Administration and two housing-related government-sponsored enterprises. The Office conducted case studies in nine cities selected to provide a range of local economic and housing conditions, rates of foreclosure, and geographic locations.
For many cities, vacant and foreclosed properties are more than just another costly expense. Tending to these properties costs money, but neglecting them can cost far more, and the report from GAO makes clear the scope of this problem. The Huffington Post explained the dilemma vacant properties pose:
While the upkeep and maintenance of a vacant home is technically the responsibility of either the homeowner or the mortgage owner, in practice it often falls to the town, which has to pay for basic services – like cutting the grass, boarding up windows and draining swimming pools – to keep the property from falling into total disrepair. Alternatively, the town can have the vacant property demolished [but] either way, the tab for cities and towns is often high. Detroit, for example, has paid $20 million to demolish 4,000 properties in the past two and a half years, the GAO found.
Communities incur costs in other ways as well. The GAO noted that vacant homes are often associated with crime and accidental fires, which require the attention of police and fire departments, thus tying up city resources. And cities often see their property taxes fall as vacant homes drive down the value of homes around them.
While vacant properties pose serious challenges to the communities faced with them, cities and states are already using great strategies to turn these properties into assets. Land banks are public authorities created to acquire, hold, manage and develop vacant properties. Land banks aim to convert vacant properties that have been neglected by the open market into productive use, and are already in use in Ohio and New York. Land banks are a great way for municipalities to deal with the high cost of vacant homes and support their local economy in the process.