Donjek Project: Coordinating the Management of Vacant Property

Foreclosure Against the backdrop of continued reeling in the residential real estate market, New York-based Local Initiatives Support Corporation (LISC) hired Donjek this winter to develop a review of the barriers to a coordinated, large-scale response to endemic vacancy in neighborhoods. 

The emphasis of the inquiry has been on reducing the costs of vacancy in residential areas – which range from increased public safety expenses to property devaluation – by acquiring property prior to or at the time it becomes unoccupied.

At this point, fundamental challenges to a coordinated approach include:

• Policy makers, investors and housing advocates do not currently have an effective way to deal in batches of properties with unclear title, rather than on a case-by-case basis.

• We are unable to provide the kind of rapid response required to prevent vacant properties from further deteriorating, due to the scale of the challenge, lack of communication and centralized leadership. 

• The level of capital or liquidity required to deal with stress in multiple neighborhoods simultaneously is not in place.

The report focuses in particular on the land bank models exemplified by the Genesee County Land Bank (operating in and around Flint, Michigan), and the Atlanta Land Bank.  Click here to download the full Donjek report to LISC.

Photo:  Courtesy of Flickr.

Talking Infrastructure Blues, or Trading Places Part 3

Ccmap What if, during his hard travels by road and rail, Woody Guthrie had penned a song he called “Talking Infrastructure Blues”? 

Talking

In Minnesota and elsewhere, much verbal back and forth continues to be had over the high-profile and disastrous collapse of the I-35 bridge over the Mississippi River.  Just this week, conservative-turned-liberal blog magnate Arianna Huffington claimed in her speech at the University of St. Thomas that neglected infrastructure is a direct outcome of the wars in Iraq and Afghanistan.  She’s wrong.

Clearly, the wars – and the way they have been debt financed – have placed and will continue to place stress on the national budget and the dollar for years to come.  Still, it’s unfair to suggest that without American involvement in Iraq and Afghanistan, infrastructure in Minnesota and elsewhere would be the focus of long-term foresight and investment by policy makers.  In political terms, infrastructure is a more elusive issue that Huffington’s assertion suggests.

Infrastructure

It’s an election year.  I will wager very little of the coming campaign messages will (excepting mention of the I-35 bridge, of course) include calls for ramped-up investment in infrastructure.  Transportation systems of roads, rail and intermodal facilities, airports, locks and dams will be missing, as will the real estate needs of university and school buildings.  Three of the reasons why:

• The price tag for quality infrastructure gives the public sticker shock

• The benefits of quality infrastructure, while they certainly justify the investment, are dispersed among private and public parties that use it

• The cost of deferring investment is difficult to measure, though decreasingly so with evolving analytic tools.

The American Society of Civil Engineers has provided ratings of U.S. infrastructure in recent years; the latest report (2005) proffered Cs and Ds in every category, with an overall grade of D, down from D+ in the 2003 report.  Their estimate of national deferred costs is a baffling $1.6 trillion. The Urban Land Institute at the end of April released a comprehensive analysis of U.S. infrastructure that notes

2008 seemingly marks a critical juncture in a rapidly changing economic environment where new approaches to land use, infrastructure and energy efficiency will likely determine and possibly reorder the next generation of winners and losers – countries, companies, investors, and peoples.

If you would like a copy of the whole ULI report, contact me and I will be pleased to email it to you.  I should warn you, it may give you the…

Blues

Guthrie would want his song to take place in a particular place, and this being the last of three posts on particular locales, let’s return to St. Paul.  The Minnesota legislative session is required to conclude here this Monday, May 19.

Advocates including the City of St. Paul, City of Minneapolis, St. Paul Area Chamber of Commerce, Midway Chamber of Commerce and a range of transportation and environmental organizations have been laboring over the last month to restore state funding for the light rail line designed to connect the two downtowns and the University of Minnesota.  Funded with $70 million in the state bonding bill passed by the Legislature in early April, light rail was removed from the bill by Governor Tim Pawlenty.  At stake is $450 million in Federal funding contingent on the State investment.

It’s a case study of the three dynamics I described above.  Without context, a $70 million investment just sounds like a large price tag as opposed to a key step for movement of workforce, connectivity of two downtowns and a major university, and regional differentiation.  From the list of advocates cited in the preceding paragraph, it’s clear that the private and public sector each recognize the value of light rail for the region’s future, but the benefits to be gained collectively are a challenge to gauge.  And last, proponents have not succeeded in shifting discussion to the costs of failing to build light rail now, in part because they are difficult to quantify easily.

As an optimist, I am hopeful in our ability to commit to a program of modernized and well-maintained infrastructure.  It will, however, require more than a talking blues.