St. Paul's plan for empty housesby Laura Yuen, Minnesota Public Radio
Vacant homes can be a nightmare for everyone on the block. Now, local governments across the country are doing damage control. The city of St. Paul is buying empty homes in the areas hardest hit by the foreclosure crisis, with the hopes that they can be fixed up and resold. But the money to purchase these properties can only go so far.
St. Paul, Minn. — Jim Erchul drives down an East Side street, counting the number of boarded-up homes on a single block.
"One, two, three, four, five, six," he said. "There's another one going vacant."
Erchul heads the Dayton's Bluff Neighborhood Housing Services, a nonprofit development group working with St. Paul to rehab foreclosed homes.
He nods to a white house shaded by trees. The former owner, Erchul said, had signed onto a suprime loan.
"He was calling us (to see) if anybody could help him," Erchul said. "And obviously no one was able to, because you see what the consequence was. It's vacant."
There are more than 1,500 empty homes on the city's radar. That's only about 1 percent of St. Paul's housing stock. Still, officials are worried because the vacant-homes list has more than doubled since 2005.
St. Paul is spending $4 million on acquiring abandoned properties in neighborhoods like Dayton's Bluff. It's part of a broader initiative called Invest St. Paul.
The $25 million program aims to stabilize the city's poorest neighborhoods using money from the city's half-cent sales tax.
Cecile Bedor, St. Paul's planning and economic development director, said the city needed to get involved in the foreclosure crisis, even if it meant reaching into taxpayers' pockets. Neglected houses are more than a single homeowner's problem, she said.
"When you drive down that street, it impacts your feeling of safety," she said. "It impacts neighbors' desire to put more money into their own home if they see the neighborhood declining. And the community as a whole, if foreclosures lead to more vacant houses, that's fewer folks who are shopping at our neighborhood commercial outlets and those neighborhood businesses suffer as well. So there's a significant domino effect."
City Hall wants neighborhood district councils to identify which blocks to focus on first. Some groups are most interested in pockets near schools, playgrounds and senior centers. These are areas where clusters of vacant properties, if left alone, could pose the biggest risk to vulnerable neighbors.
Bedor says the next question -- whether to rehab or demolish -- is a huge undertaking.
"No one likes to tear down houses," she said. "Those are real judgment calls. One person's junk is another person's treasure. I think that's one of the issues that the neighborhoods and we struggle with: How aggressive should we be?"
And it's not like $4 million can remove or repair every blighted home in the city. In reality, that will pay for just a smattering of houses in each of a handful of targeted neighborhoods.
Bedor acknowledged that cities can't reverse the nation's housing epidemic, but they can push lenders to work with families struggling to hold onto their houses, she said. They can also put pressure lending companies to fix up decaying properties by threatening to destroy them.
Yet sometimes, the bank that owns the house is nowhere to be found. Bob Kessler, director of the city's Department of Safety and Inspections, says his office spends a lot of time trying to track down property owners. But when certified letters go unanswered, sometimes the city needs to make a call.
"Finally, two weeks after the property's been demolished, they call to find out what the status of their property is," Kessler said. "And our response is, 'Do you know the directions on how to get to the Pine Bend Landfill? Because that's where your property is.'"
Dayton's Bluff developer Jim Erchul said some homes are beyond repair. He points to a little green house with no central heating and a caving foundation. It was recently sold at an auction to an investor.
"This is literally the worst property I've ever been in, ever," he said. "Nothing good can ever come out of this property. The cost of renovating it, to a standard that would yield something good, it's just way too costly. No one's going to do it. So instead you've got these folks nickeling and diming it to use it as who knows what."
Dayton's Bluff is trying to make the best out of a bleak situation. In May, the community council will host a vacant homes tour. It's intended to play matchmaker for orphaned properties who have a fighting chance of finding a new owner.
- Morning Edition, 02/21/2008, 7:45 a.m.