... for remaining residents. ⢠Current residents can't sell because no market ... Sufficient density for retail. ⢠S
Vacant Residential Property A possible solution
Robin Dubin, PhD Chair and professor of economics
Residential density High residential density • Creates vibrant neighborhoods • Neighbors • Few vacant or boarded up houses • Retail and entertainment options • Public services provided at lower cost • Police • Fire • Garbage pickup • Snow removal • Public transit
The problem • • • •
The city of Cleveland was built for about 1M people About 400,000 current residents Foreclosure crisis made things worse Most of the vacant property and abandoned houses are located on the East Side • Result: many neighborhoods on the East Side have much lower density than they were designed for
Issues • Many empty houses and vacant lots interspersed with occupied units: vacant property cannot be redeveloped • Unpleasant living environment for remaining residents • Current residents can’t sell because no market
Possible solution • Concentrate current population into “population centers”
Advantages • • • •
Neighbors Sufficient density for retail Safety: each can have police and fire station Reduce the cost of providing public services • Safety • Garbage pickup • Snow removal • Public transportation • Vacant land can be redeveloped
Disadvantages • People have to move • Expensive
Computer program • Input: location of population centers • Population clusters will be built around these points • Find closest center for each residential parcel (both occupied and vacant) • For each center • If vacant parcel nearer center than occupied parcel, make vacant parcel occupied, and occupied parcel vacant. This is a move. • Count number and distance of moves • Given location and number of centers, program minimizes the number of moves required to concentrate population.
Example choice of centers • At least one per ward • Densest areas • Adjusted center locations to give contiguous occupied and vacant areas
Note: On the maps, red indicates a vacant residential parcel, green an occupied residential parcel, and the blue dots are the population centers.
Discussion • Density of city is not changed • Moves involve swapping of vacant and occupied parcels, so current population is accommodated • Moves are short, so people stay in their communities • Large tracts of vacant land could be redeveloped into industrial parks, office parks, parks and urban farms. • Many moves mean that this would be expensive to implement
One way this could be implemented • • • • • •
Say renovation or rebuild costs 140K per move (Mike Kucera) Sell for 70K Offer 30K for property in red areas Finance 40K through lease purchase agreement Subsidy=100K If someone outside of red area wants new house, sell for 70K, but don’t buy current house. Subsidy=70K. • Idea is to set numbers so deal is attractive to people in red areas, but not to those in green areas.
Alternate cost estimate • • • • •
40K-50K for rehabilitation Offer 30K for property in red area Sell for 60K Subsidy=10K-20K Structure must exist and be in good shape.
Implementation, cont. • Cost of all moves about 1.25 billion at 140K. Cost is 125M at 40K. • Additional cost: lead remediation • Replace lead painted windows in rehabs • Soil treatment: $2-$36/sq ft
How to proceed • Could treat as a strategic plan and only renovate in green areas • Could do a pilot project in one part of the city for about $2 million • If the relocations are successful in creating value, then private developers may jump in, reducing the cost of the program • First step: survey residents to find out how willing they are to move
