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SG-W:/ Fwd: [migreens] How to Combat Derelict Urban Housing



This letter may not apply to much of Washtenaw County, but I'm hoping
that the thinking it demonstrates might spark some ideas of similarly
innovative approaches to sticky issues like farmland preservation or
affordable housing. Give it a read and put on your thinking caps.

Steve

---------------- Begin Forwarded Message ----------------
Date:        03/10  3:39 PM
Received:    03/11  8:17 AM
From:        John Gear, jmgear@ameritech.net
Reply-To:    migreens@yahoogroups.com

I just sent this into the Lansing State Journal in response to the
article
in today's paper about the city's struggle to deal with derelict
houses.  (Which seems likely to take us in the direction of Detroit's
worst
areas of disinvestment rather than towards any kind of renewal.)

===========
 Christine MacDonald's good article on Lansing's many derelict houses
(Mar.
10, "Fix it or flatten it") suggests how ineffective our current
approach
to preserving and maintaining Lansing's housing stock is.  Our top-down,

red-tape intensive "system" for dealing with derelict houses is really
"Don't spend an ounce on prevention, wait until it requires pounds to
cure
if it's still curable at all."  And the "cure" -- destroying housing --
is
the urban equivalent of blood-letting, as harmful as the disease.

 Decaying housing, declining population, budget shortfalls and
struggling
schools are social cancers.  Each one spreads through the body politic
and
triggers the others. Do physicians treating cancer wait for tumors to
spread throughout the body to respond?  That's how we treat decaying
housing.  Rather than acting promptly we wait until repairs cost half of

the house's value and it's in terminal condition.

 What we must do is shift from a reactive and bureaucratically-managed
system (letting housing stock decay before instituting expensive and
painfully slow city intervention) to a proactive system that creates
market
incentives for arresting further decay.  We must ensure that owners
either
restore substandard houses promptly or sell them to someone who will.

 That means reversing the payoffs (lower taxes) that reward owners for
letting rentals decay.  Basically, we need to make it more profitable to

keep a house in productive use than to let it become or remain derelict.

 How?  Charge rental property owners an escalating monthly fee whenever
a
rental unit not under active restoration is vacant for more than 45
days.
Charge $100 after 45 days, $200 after another 30 days, $400 after the
next
30 days, $800 after the next, and $1000 for every 30 days of vacancy
thereafter.  Attach a lien to the property so that it is satisfied when
the
property is sold.

 That way, instead of rewarding a property owner with lower property
taxes
as the value of a house declines, we create a real incentive for the
owner
to fix the house and put it back into service or sell it to someone who
will quickly, before renovation costs skyrocket.

 Put all the fees into a Housing Renewal Fund, which is then lent out at
no
interest to help residents buy, restore and occupy derelict houses,
turning
eyesores into owner-occupied home.  Investors could also borrow at below

market rates to fund renovations or demolish and rebuild on the same
site.

 It's an aggressive plan.  But we have an aggressive cancer and our
current
treatment is little more than aspirin administered much too late.  We
have
built-in incentives to allow housing to decay and a system that is both
slow to respond and irrational to boot since it destroys houses that
could
have been saved if we acted sooner.

 Innocent neighbors suffer from blighted homes nearby -- while those
owners
are rewarded with lower taxes as they drive property values down.  This
is
madness.  And it helps explain why Lansing suffers declining population,

higher taxes for stagnant services and struggling schools.

   It's time to break that cycle. It's time to stop hoping a
bureaucratic
process can address substandard housing effectively and to start using
market incentives to prevent problems in the first place.  When we use
the
market to encourage decent housing and penalize the substandard stuff,
we'll get more decent housing.  The only question is "What are we
waiting for?"

=  =  =
John Gear is a Lansing resident and has applied to serve on the Lansing
Planning Board.


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