The Vacants

There's this stretch of 9th street sort of at the fringes of my neighborhood that's preposterously littered with vacant buildings. My friend Rob Goodspeed has just put together the closest thing out there to a comprehensive map and listing of the properties. The thing of it is that this isn't really what you'd call an economically depressed area anymore. The residential blocks surrounding this stretch of ninth street have experienced a lot of getrification, and it runs from the Convention Center to the vibrant U Street in the north (and in particular to a concetration of Ethiopian restaurants and shops) and this part of ninth street ought to be an increasingly thriving retail corridor in the heart of the neighborhood.What to do with these kind of scenarios is troublesome. As Rob wrote several weeks ago:

Despite high demand for both housing and retail, a collection of vacant properties can result in a Catch-22: too many speculators can inhibit investment in a neighborhood meaning few owners make money. Without tenants, the properties decay, attract illegal dumping, are easy targets for graffiti, and a host of other problems.

Basically, if there weren't so many vacant properties, the odds of the remaining properties staying vacant would go down.

Comments

It is almost like there's some sort of... tipping point, let's call it.

Posted by Megan, not McArdle | September 13, 2007 7:03 PM

I assume we all read today's NYT piece on tearing down vacant houses in Buffalo...

Posted by Petey | September 13, 2007 7:16 PM

"I assume we all read today's NYT piece on tearing down vacant houses in Buffalo..."

Link...

Posted by Petey | September 13, 2007 7:19 PM

You could phrase it in terms of first-mover disadvantage or everyone wanting to be a free-rider. The bottom line is that holding costs are way too low.

And there are reasonably good solutions already available in the building codes for many cities. It's generally just about applying the power of code enforcement more often and fairly, and forcing auctions in more cases. Too often the true value of the buildings is what's in question - applying some government force to do the price discovery can be a good thing.

Of course now the developers will claim that they're waiting for the market to recover and can't be pressured. But there's still plenty of market demand at slightly lower prices. I say mark them to market - building codes don't guarantee that a developer gets to make as much money as they want. (but perhaps campaign contributions do)

Posted by mobtown playa | September 13, 2007 8:03 PM

Dare I say it -- the owners who keep the properties vacant for lengthy periods should be subject to eminent domain. There is no reason for these properties to be unoccupied. This is not an urban waste land.

Posted by klein's tiny left nut | September 13, 2007 8:06 PM

nah, just force an auction through receivership. it's not worth all the time and legal challenges of eminent domain, plus then the government would just hold the property for longer while it figured out what to do. the market is already there to get the property rehabbed, just use auctions to do price discovery and compensate the original owner (i.e. it's not a taking).

Posted by mobtown playa | September 13, 2007 8:28 PM

mobtown playa analyzes it correctly.

Building Codes provide ample power to force clean-up through the 'abatement' process. You don't need eminent domain. When it comes to actually eliminating "blight" -- not using it as an all-purpose make-weight for eminent domain in acquiring the land to allow redevelopment projects, as in Kelo -- there is an alternative: Abatement. Force the owner to remove the offending blight condition (that proverbial fire-trap rat-infested house). Or do it for them if they refuse and then send them the bill. That's the law.

Posted by David Sucher | September 13, 2007 8:49 PM

As Rob wrote, DC is supposed to punish owners of vacant properties by charging them a big premium on their property taxes, incentivizing them to get the property occupied. It seems that, no surprise here, DC has not gotten its act together in terms of identifying the vacant properties and making sure they are properly taxes.

If the vacancy deadlock could be broken, then owners would be more likely to make sure their properties were occupied. Once way of breaking the deadlock is to punish owners of vacant properties through tax policies. Especially in this market, I highly doubt that owners are going to decide that the addition tax surcharge they pay is made up for by the increase in property value each year.

Posted by Tyro | September 13, 2007 8:51 PM

Alright, you guys came up with better approaches.

I am always amazed at how long DC tolerates this stuff. When I first moved here back in the early Reagan years there was a property on Connecticut Avenue just north of Dupont Circle that was allowed to remain vacant for a couple of years. It was incomprehensible.

Posted by klein's tiny left nut | September 13, 2007 9:07 PM

Why vacant?
One reason: Urban real estate is often (most of it, in fact) part of a mom-and-pop market.

Posted by David Sucher | September 13, 2007 9:22 PM

All the suggestiosn here are great, and when we get a reallly enlightened goverment in a city we will see some of them implemented. This is a good thread.

But you are forgetting the massive corruption that exists in the US at the moment. Large city governemts are run for, and sometimes by, real estate developers. Its gotten to the point where they have no other justicifcation for their existance. The control by real estate interests by the local media, plus the legacy of urban machines (ballot stuffing, knocking reformists candidtes of the ballot or making it diffcult for them to exist unless they agree to be co-oped). This is almost impossible to change.

I have no idea what to do about this, but you will never see property development in U.S. cities run according to good, liberal, free market principles while I'm alive. And guess who contributes the most money to the local Republican and Democratic committees?

Posted by Ed | September 13, 2007 10:00 PM

There seems to be an assumption that there are hordes of buyers who would gladly snap up these properties and do something useful with them if only the owners would put them on the market.
What if that's not true?
What if some of this property, due to bad location (no parking, inaccessible from major roadways or due to congestion; crime ridden or poverty stricken neighbors etc.), is simply not attractive to anyone for any purpose so, quite literally, no wants it?

Posted by JonF | September 13, 2007 10:14 PM

jonF,

We are talking about properties that we are all specifically aware of in neighborhoods that are close to where we live. It's not a theoreticla discussion. The street in question is in the midst of one of the hottest redeveloping areas in DC.

Posted by Klein's tiny left nut | September 13, 2007 10:37 PM

How many of those are owned by shiloh baptist?

Posted by Adam Conner | September 14, 2007 12:38 AM

Retail gentrification usually lags housing gentrification by many years, even a decade or two.

Posted by Steve Sailer | September 14, 2007 2:05 AM

Re: We are talking about properties that we are all specifically aware of in neighborhoods that are close to where we live. It's not a theoreticla discussion.

Who said it was? I'm talking abouit proerty I know of too. In Detroit, in Cleveland, even here in Fort Lauderdale. There's property out there that you can't give away.

Re: The street in question is in the midst of one of the hottest redeveloping areas in DC.

Then presumably (other than the effects of the current slow down) it will sell in the near future and be redeveloped. Of course there may be issues (old liens, unclear title, brown field cleanup etc.) that you are unaware of that are keeping it from being sold. For example, I know a lady who would like to sell her bar in Michigan and retire. It's in a fairly hot area for new construction (edge of suburban sprawl). But it used to be a gas station, and the old gas tanks are still the ground. New owner will have to clean that up per current EPA regulations. So far everyone's taken a pass on her property and bought less encumbered property nearby.

Posted by JonF | September 14, 2007 6:24 AM

The bottom line is that holding costs are way too low.

We built an in-fill house in the 90s on a lot which had been platted in 1917. The first and subsequent owners -- 3 generations -- always vaguely planned to use it or have their children use it but never got around to it. For years they payed taxes on it and, eventually, sewer tap-on fees. Never used it. And the lost use of the money that was originally invested in the purchase? Hoo boy.

Posted by Jeffrey Davis | September 14, 2007 9:03 AM

I recall basically it is all about Shiloah Baptist. Until they develop their property, you will ahve that giant streatch of abandoned houses and it is hard to attract developmetn near it. They will not sell because they have some vague notion of putting in a retirement home.

Posted by nathaniel | September 14, 2007 9:10 AM

They will not sell because they have some vague notion of putting in a retirement home.

That's what they keep saying. It is widely suspected, however, that they want to tear down the buildings and build a parking garage for their congregation, many members of which drive in from the suburbs. There's some more info on that at shilohdc.blogspot.com.

Politics in DC is highly, highly localized by neighborhood, and Shaw has a lot of political problems, even worse than many other parts of the District, which impede the ability of the city to deal with these abandoned properties, among other issues. Prospects for the improvement of Shaw over the long term are, in my opinion, pretty bleak.

Posted by Tyro | September 14, 2007 10:03 AM