Measuring the Impact of Blight Removal. Spatiotemporal Data Systems & Econometric Modeling

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Measuring the Impact of Blight Removal Spatiotemporal Data Systems & Econometric Modeling

Housing Policy: We Can Do Better Are housing policies having their intended impact on people s lives? Positive? Neutral? Negative?! This is a significant question because it concerns people s families, homes, neighborhoods, and communities.

Post-Crash Housing Policy: Stabilize U.S. Treasury: Does demolition protect nearby home values and reduce mortgage foreclosure? TARP HHF requirement for resource expenditure. Objective scientific measurement of demolition impact was necessary and within reach methodologically.

Good Science: It s all about control

Neighborhood Types Vary

Micro-Neighborhood Types Vary

Individual Homes Vary

Time Varies

Spillover Impacts from Neighbors Vary

Measuring Blight Removal Impact

Foreclosure Rates With Blight Removal Vary

Maximizing Intervention Impact? Avoiding vacancy through mortgage foreclosure prevention; Demolition of blight = vacant lot; Rehabilitation of viable homes; Vacant lot improvements; Demand and supply concerns. Is their an optimal mix of intervention given varying types of neighborhoods?

Hardest Hit Fund 2

History 3 2010 President Obama established the Hardest Hit Fund in February to provide targeted aid to families in states hit hard by the economic and housing market turndown $9.6 billion was allocated across 18 states and the District of Columbia Deadline of December 2017 Programs vary across states and Ohio offered many homeowner programs Ohio received over several allocations a total of $570 million 2016 An additional $2 billion was allocated to participating states Deadline extended to December 2020 Ohio re-opened two homeowner programs and allocated additional funds to blight elimination Ohio received $192 million

History 4 Save the Dream Ohio Homeowner programs commonly referred to SDO Seven individual programs Rescue Lien removal Ongoing assistance Modification Transition Assistance Tax Portfolio buy and modify Goal to prevent foreclosure for homeowners suffering from program eligible hardships such as: Loss of employment Disability Death of a borrower

History 5 Neighborhood Initiative Program Sub-program under Save the Dream Ohio created in 2013 to address blight 100,000 1-4 unit structures across the state Must be vacant and blighted

Impact 6 Over 25,500 homeowners assisted $447 million distributed to help homeowners avoid foreclosure Homeowners were assisted in all counties $XX remaining

Impact 7 Over 6,000 blighted and vacant houses demolished $82 million distributed to address blight Forty-four participating counties $149 million remaining

Blight to Bright 8 Clark County Lucas County

Results 9 Save the Dream Ohio Approximately 98% of participants achieved successful program outcomes Still in home Sold for profit Graceful exit Neighborhood Initiative Program Mid program study indicated that removal of a blighted unit positively impacts the property values of residences within 500 feet Positive impact includes an increase in equity which in turns lowers the foreclosure risk as a homeowner is more likely to sell their property than abandon it

Future Impact 10 In 2017, U.S Department of the Treasury approved the inclusion of certain disability hardships and increased the sustainability cap for the homeowner programs. They also approved the demolition of properties that have 5 or more units including those that are apartment complexes. We expect to help an additional 1,000 homeowners with these changes. We have already seen much excitement from communities for the removal of large complexes

Future Impact 11 Commons At Royal Landing will become X

Future Impact 12 Norton Crossing

Future Impact 13

Reclaiming Vacant Land

Trumbull Neighborhood Partnership is a 501(c)(3) non-profit Community Development Corporation serving the neighborhoods of Warren, Ohio. The mission of Trumbull Neighborhood Partnership is to empower residents and promote sustainable community development through projects and programs that increase the quality of life in Warren's neighborhoods.

Mission Goal The mission of the Trumbull County Land Reutilization Corporation is to return land and vacant abandoned properties to productive use, reduce blight, increase property values, support community land use goals, and improve the quality of life for all county residents. The goal of the Land Bank is to promote, develop, manage, and facilitate the reclamation, holding, rehabilitation, and reutilization of vacant, abandoned, tax-foreclosed, and other real property.

Start with community outreach TNP s Approach Sustainable community development should be resident driven Units of measurement may be parcels (whether it be demolition, rehab, home repair, gardening, or grass), but ultimately our work is about how people feel about living here Use field work to collect data about property and neighborhood conditions, talk to neighbors about solutions, and leverages resources to pursue revitalization.

In 2015 TNP engaged more than 250 residents in localized meetings to discuss what was important to them, what types of land reuse they would like in their neighborhoods, and what specific projects or parcels they would like to see addressed Community Outreach Jobs Warren citizens are concerned about: Education Crime Safety Blight Vacant property High grass Recreation Public art Passive green spaces

Community Gardens Peace of Hope Garden

Porter St. and The Giving Tree Garden s

Salvage Stone Walls

Community Outreach

Woodland Bike Park

Buena Vista Garden

Basketball hoops

Basketball hoops

Side lots

The Positive Impact of Blight Removal on Communities Fighting Blight in Indiana

Indiana s Blight Elimination Program In February 2014, Indiana announced it would use a portion of its HHF allocation to fight blight by rolling out the Blight Elimination Program ( BEP ). WHY FIGHT BLIGHT? Blight negatively impacts Indiana communities by: lowering property values; drain community resources; drain law enforcement and emergency resources; and jeopardizes public health and safety.

How does Indiana fight blight? IHCDA makes loans to qualifying applicants from its General Fund for the demolition of qualifying properties. The U.S. Department of the Treasury has approved the use of 75 million dollars of Indiana s HHF allocation to restructure the demolition loans from the General Fund.

75 Million was allocated to the BEP The 92 counties in Indiana were divided in to six Funding Divisions based on population. Local units of government applied to the Funding Division that corresponded with the county where the unit of government was located. Division One contained counties with a population in excess of 450,000. Lake (Gary, Hammond, and East Chicago) and Marion (Indianapolis) counties were in Division One. Division Six contained counties with a population of less than 25,000. Division Six contained thirty counties including Brown, Carroll, Fayette, Jay, Ohio, Orange and Perry. Funds were allocated to each Division based on the percentage of the Indiana s population located within the Division. Division One contained 21.595 % of Indiana s population. Division One was allocated 21.59% of the program funding. Division One was allocated $16,159,000.00. Division Six contained 13.07% of Indiana s population. Division Six was allocated $5,737,500.

BEP Divisions

BEP Recipients by Division

No Land Banks Now What? Municipalities & local units of government applied to the BEP. Entities such as non profits, CDCs, EDCs, MDCs serve as program partners holding title to the real estate during the demolition process. Many program partners retain title to facilitate the end use of the lots post demolition.

The BEP Process BEP AWARD ACQUISITION SAMPLE DEMOLITION GREENING NOTICE and Public Hearing REQUIRED INSPECTIONS OPEN DEMOLITION HISTORIC REVIEW BIDDING & AWARDS CLAIM SUBMISSION

Indianapolis BEP Project Near East Area Renewal (NEAR) 906 North Beville- The Exterior 906 North Beville- The Interior

Indianapolis BEP Project 906 North Beville NEAR constructed a new home at 906 North Beville. The home was constructed according to the design standards set forth in the St. Clair Place Pattern Book. The property sold in July of 2015. This property is now contributing to the tax base. A new family is now contributing to St. Clair Place Community

Anderson BEP Project Anderson demolished this property in May of 2015. The site is the location for a Habitat build The new home constructed by Habitat for Humanity of Madison County serves as transitional housing for families in need in Madison County

Rural Land Bank Impacts By: Bryan K. Davis Chairman Scioto County Land Reutilization Corporation

Scioto County Facts Population 76,088 (2016), High of 80,000 in 2010. -4.3% Historically high unemployment. Jan 2010-15.8% (loss of factories) Sept 2017-6.1 % Housing 34,000 Owner-Occupied 68% (lower in city, 50%) County Seat: Portsmouth, Ohio Epicenter of Opioid Drug Epidemic. Since 2007.

SCLRC Facts Started demo in May 2017. Identified our main areas of concentration by looking at economic development opportunities and blight. Port Authority and Regional ED Partner Collaboration.

SCLRC Facts Coordinated with local health departments on high risk areas. Board consist of 2 County Commissioners, County Treasurer, Township Trustee, Municipality Rep. We have demo d 45 houses, have 25 more under contract.

SCLRC IMPACT Restored properties to tax roles. Reduced foreclosure rates by 25%. Entering into payment plans. Cleaned up blight.

SCLRC IMPACT Improved health. Reduced Drug Activity. Reduced health hazards such as stray animals and vermin. Children Services Collaboration.

SCLRC IMPACT Increased cooperation. Police, health department, county/city. Reduced Drug Activity. Squatters. Crime houses. (Drugs, Homicide, Burglary) Increased pride in our community.

The Future is Bright. What s Next? Further identifying homes to be remediated. Collaboration with non-profits. Parks & Recreation. Rehabilitation of housing stocks.

The Positive Impact of Blight Removal on Communities

Robin Darden Thomas Land Bank Program Director Western Reserve Land Conservancy Thriving Communities Program

Foreclosures Mortgage Foreclosures 100,000 90,000 80,000 70,000 60,000 50,000 40,000 30,000 20,000 10,000-16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 - Cuyahoga Ohio

A more dramatic look at foreclosures the blob that ate Cleveland!

Hardest Hit Fund was established in 2010 to provide foreclosure assistance to homeowners in 18 Hardest Hit states plus the District of Columbia

Hardest Hit States $9.6 Billion

Hardest Hit Funding US Treasury allocates funds to state Housing Finance Agencies State HFA establishes which programs to offer and sets funding levels for different programs State HFA determines which entities are eligible for funding and how to allocate funds State HFA actions require Treasury approval

Uses of Hardest Hit Funds Unemployed Homeowners Second Mortgage Short Sales Home Preservation Principal Reduction Loan Modification Transition Down Payment Mortgage Reinstatement Lien Elimination Reverse Mortgage Elderly

Blighted Properties Affect Foreclosures Blighted properties: Reduce value of nearby properties As value decreases, mortgage may exceed property value (underwater mortgages) Leads to foreclosures and walkaways

What to do about Blighted Properties? Critical need to remove blighted structures, but little or no funding available Looked to Federal Government for help

Search for demo funding Approached U.S. Senators and Representatives Visited U.S. Treasury 90% of mortgages backstopped by Treasury Could lose millions of dollars on failed loans Need to remove blighted properties from neighborhood to protect property values

U.S. Treasury required proof that demolition of blighted structures reduces foreclosures

Uses of Hardest Hit Funds Unemployed Homeowners Second Mortgage Short Sales Home Preservation Principal Reduction Loan Modification Transition Down Payment Mortgage Reinstatement Lien Elimination Reverse Mortgage Elderly Blight Elimination

Hardest Hit States $9.6 Billion

Hardest Hit States Blight Elimination Programs

Access to Blight Removal Funds Eligible participants vary by state Most common participants are municipalities, counties and non-profits Two states permit for-profit organizations to apply for funding (Michigan & Mississippi) Three include land banks, with Ohio as only state limiting participation to county land banks

Summary of Funding State $ HHF $ SPENT % SPENT $ BLIGHT % OF HHF Alabama 162.5 71.0 44% 35.0 22% Illinois 715.1 588.6 82% 17.0 2% Indiana 284.7 253.3 89% 75.0 26% Michigan 761.2 650.8 85% 381.2 50% Mississippi 144.3 101.0 70% 20.0 14% Ohio 762.2 582.4 76% 238.8 31% South Carolina 317.5 250.0 79% 30 9% Tennessee 302.1 235.3 78% 10 3% Total 3,449.6 2,732.4 79% 807 23% As of 6/30/2017