Cleveland hasn’t fared nearly as badly as some other metro areas in the housing bust, but the city limits have been losing population — over 500,000 people — over the last 60 years.
And that’s obviously a key reason why the city now has so many vacant homes.
Part of the city’s strategy has become demolition of vacant homes that are unlikely to be re-inhabited or are being vandalized or damaged.
The embedded story from 60 Minutes here and the web extra about foreclosures in formerly vibrant suburbs are quite moving. There are a number of mortgage holders who seem committed to continuing their payments out of a sense of duty, although my guess is that any number of them will eventually default.
One official argues for widespread principal reduction being in the best interest of lenders, but if so many residents are continuing to make payments, then it is not in fact in the best interest of lenders to reduce the principal.
From The rot of decomposing housing stock threatens Cleveland and its neighbors in the Cleveland Plain Dealer:
In Cleveland alone, there are probably 13,000 vacant buildings, most of them houses. This year, the city and the land bank will demolish about 1,100 houses. About 1,500 that were occupied at the beginning of this year will be empty by the end.
Countywide, the number of vacant structures is between 25,000 and 30,000.[. . .]Councilman Jay Westbrook described it as “like the plague.”
“It is the No. 1 problem facing this city,” said Westbrook. “Attacking it must become a crusade. How it is addressed will impact the city for decades.”
In the overwhelming majority of cases, rehab isn’t cost-effective. What Cleveland and the suburbs need is a massive demolition program that will save dozens of neighborhoods on the brink.
The cost? About $100 million.
And the unanimous view of everyone I spoke with is that the federal government, whose lack of action exacerbated this crisis, should help pay for it.
Vacant homes destroy property values, drive up crime rates and drive out residents.
If not taken down, they’ll kill Cleveland.