Communities Come Together to Address Blighted Properties

Vacant, abandoned and blighted properties have challenged community developers, housing advocates, tenants and municipal officials for years. Recently, the Center for Community Progress (www.communityprogress.net) brought together practitioners from Massachusetts and two other states to address the challenges posed by these properties through the Community Progress Leadership Institute (CPLI), a four-day symposium held at Harvard Law School.   

Three communities from Massachusetts (Brockton, Fitchburg and Lawrence) were chosen through a competitive process to participate in CPLI last month, along with MACDC, the MA Attorney General’s office, and representatives from cities in Missouri and North Carolina.  Each Massachusetts city delegation included a representative from a CDC (Neighbor Works of Southern MA in Brockton, Twin Cities CDC in Fitchburg, and Lawrence Community Works in Lawrence), along with city officials from local departments including City  Solicitors, Community Development Directors, and representatives from departments responsible for code enforcement, public health, and tax collection.  Most of the sessions focused on the numerous challenges associated with blighted properties and creative strategies for addressing them.  These included sessions on using data and analyzing markets; property tax systems and receivership; code enforcement, and land banking.  The Institute also offered some valuable sessions on the type of collaborative leadership needed to solve these challenges. The Institute culminated in State-specific planning sessions, where all the participants from Massachusetts could discuss how to take what we have learned and shared back to our communities.

Some of the key take-aways for me included:

Understanding markets is key to identifying successful strategies for a property or a neighborhood.  Markets are a driving factor when people consider where to live, invest, or build.  All strategies to address individual properties or neighborhoods are affected by the market, but markets are not all-powerful.  There are strategies than can influence the market.  Effective strategies are driven by data that can tell you how well the market is working and what affects the market.  There are national data sources (such as the Census and the U.S. Postal Service), local data sources (such as property records and tax records), and “point-source data”- data you can collect on individual properties.  Once you have the data, you can collaborate with others, in City government and outside of it, to develop a neighborhood action plan.

Code enforcement strategies should be applied strategically based on market factors.  Strategic code enforcement involves understanding your inventory of blighted properties, using data to identify a menu of remedies, and making market-driven decisions to deploy scarce resources.  This can be effective in all but the weakest markets.  In very weak markets, a strategy of boarding up vacant buildings and cleaning up illegal dumping may be appropriate.

Court-Ordered Receivership has proven to be effective tool.  Under Receivership, a Court appoints a receiver to manage blighted properties (vacant or occupied), spend on necessary repairs, and put a lien on the properties for the costs incurred.  In a middle-market neighborhood, where properties have value, the threat alone of Receivership may be enough incentive for a property owner to make the necessary repairs.  If there are a large number of blighted properties in a neighborhood, Receivership may be the best strategy for addressing blight.  Through the Attorney General’s Abandoned Housing Initiative, Massachusetts has aggressively addressed vacant properties in a number of communities.

Property tax systems need to be efficient, effective, and equitable.    An efficient system establishes clear timelines for each stage of enforcement, including what a property owner must pay and when the owner can redeem the property. An effective system yields maximum payments and avoids abandonment and deterioration.  An equitable system provides built-in circuit breakers for targeted populations (such as elderly, disabled and low-income people), with a clear program of hardship payment plans for certain properties.  While some municipalities sell their tax liens for an immediate infusion of cash, this means losing control of the properties and foregoing the interest payments associated with tax delinquent properties.

You don’t need to have a Land Bank to do land banking.  A Land Bank is a public entity that focuses on the conversion of vacant, abandoned, and tax-delinquent properties into productive use.  It can be an effective tool where other tools fail: when code enforcement is not effective because property owners have no economic incentive to invest in repairs, and where owners who acquire properties auctioned due to tax foreclosure repeat the cycle of disrepair.  Syracuse, New York pursued an aggressive strategy of tax foreclosure, resulting in a significant payment of delinquent taxes, a portion of which were used to fund the operation of the Greater Syracuse Land Bank to acquire many of the properties whose owners continued to neglect both their properties and their tax obligations.  While Massachusetts does not have State enabling legislation to allow municipalities to establish Land Banks, many communities have Redevelopment Authorities with untapped power and potential to acquire and convert properties to productive use, i.e. to “land bank”.

It all needs to work together.  On the last day of CPLI, all the participants from Massachusetts met to discuss their priorities and how they could work together to implement the strategies discussed over the prior three days.  We discussed the need for improved data collection systems, ideas for incentivizing compliance with code enforcement, strategies for dealing with tax title properties, and how to use the State’s Receivership statute to greater effect.  Within each City, all agreed that a more systematic and integrated system for addressing blighted properties can be accomplished through the cooperation of the various local stakeholders.  Statewide, we agreed that re-convening the participants to discuss strategies and share progress would be helpful- for the three communities involved in CPLI and other municipalities statewide.  MACDC and the MA Attorney General’s office agreed to convene the group and to organize a training on Receivership, as the first steps in an ongoing process.

Each vacant, abandoned and blighted property has a story, and typically its condition results from a number of inter-related and reinforcing factors- a weak real estate market, a neglectful property owner, and/or a lack of effective government response. By approaching the problems associated with these properties in a data-driven, collaborative, and aggressive manner, many of these properties can be turned around- resulting in better living conditions for residents, stronger neighborhood markets, and more housing for Massachusetts residents.