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The Total Cost
of Vacant Housing?

by David Stanowski &
Jacquelyn Tarpy
03 June 2011

Everyone knows that vacant housing is an eyesore that diminishes the quality of life in its vicinity, but it is much more than just an aesthetic issue, it is a safety hazard, a breeding ground for crime and it is very costly to the local economy. Vacant housing may be the final straw that convinces someone to leave a neighborhood; which may reduce the population of a city.

Vacant housing is a major expense for local government, and costs tend to increase every year that properties remain vacant. They produce little or no property taxes, but can be a significant drain on local government coffers.

The most common reason a property is abandoned is that the cost of maintenance and taxes appear to be a bad investment to the owner. The longer a house is vacant, the higher the cost of renovation, so even if market conditions do improve in subsequent years, profitability often cannot be reclaimed. 

A neglected physical environment is a breeding ground for bad behavior which is why vacant properties often show evidence of use by prostitutes, drug dealers and property criminals. Several studies have found crime rates in areas with vacant buildings are much higher than average requiring significant police resources. Just the simple act of securing vacant buildings can be a cost-effective method of crime control for distressed neighborhoods.

Fires are more likely in vacant housing because of lax maintenance, substandard wiring, and the accumulation of debris. Squatters often burn candles, build fires, or use outdoor grills in these properties, and vacant houses are frequently the target of arsonists. 

A retired firefighter wrote in response to our first article on vacant housing, “Galveston has some of the most dangerous buildings in the country from a firefighter perspective. If they are vacant and run down, like some are, they are super dangerous and require a defensive approach to firefighting. I don’t think that many folks in Galveston (other than the firefighters) understand the potential for conflagration conditions that exist because of the close spacing, wood construction and high wind conditions that we have most of the time on the island. Vacant buildings could easily be the starting point for a conflagration. The reason this has not already happened is because of the skill and tenacity of our firefighters and a little divine intervention!”

Safety & Nuisance:
Vacant properties are an attractive nuisance to children, who may be injured while exploring them, and they are also a danger to adult trespassers and squatters. Even after demolition, many vacant lots continue to be dumping grounds; a hazardous nuisance, and an on-going cost to city government.

Tax Revenue:
Vacant-property owners are often delinquent on their taxes, because they see no reason to make more payments on a bad investment, and if they do pay, the amount is usually very small due to their low valuation. Unfortunately, their “bad investment” lowers property values, and tax collections, in the surrounding area.

The process for cities to gain title to vacant properties is often lengthy, complicated, and expensive which means they frequently cannot recoup their costs. Once they are resold, cities also cannot ensure that they will be put to a productive use.

Property Values:
Studies have found that the closer properties are to vacant houses the greater the negative impact on their value.

Insurance Rates:
The proximity of vacant housing can raise insurance rates, and even cause cancellations in extreme cases.

Neighborhood Cohesion:
People who live in areas with vacant housing may begin to feel isolated, and succumb to the prevailing attitude that no one cares; weakening the neighborhood.
The blight that vacant property creates triggers a descending spiral of decline in a city. City Council must take the historical step of creating a vacant-housing policy to address the problem in this city. They need to look at the City’s illogical and uneven code enforcement, what can be done to encourage the rehabilitation of vacant properties, and reforming the foreclosure and demolition process for those beyond hope.

It is not necessary to hire another consultant, because many cities are already way ahead of Galveston, and there is a wealth of experience that they can share.

The National Vacant Properties Campaign is one such resource.

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