In West Baltimore, community developers have an ambitious goal to tackle a persistent problem in the neighborhoods ringing Mondawmin Mall — reducing the number of an estimated 476 vacant or abandoned properties to zero within the decade through development, investment, and working with residents and families already there.

There are good reasons why Neighborhood Housing Services of Baltimore has chosen Greater Mondawmin: Within its footprint are a transportation hub, a retail park slated for redevelopment, a university, and several parks and amenities. And the relatively manageable size of the homes — many are two stories tall with three or fewer bedrooms — means that NHS will need fewer dollars in subsidies to rehabilitate them and sell them at reasonable prices, NHS executive director Daniel Ellis said.

Ellis calls Baltimore’s surfeit of vacant homes — about 15,000 have been identified by the city — its greatest math problem. Research published by academics at the University of Baltimore shows a vacancy rate of about 4% is a benchmark for a “stable” neighborhood. Above the line, investment stops, home prices fall and residents leave. Nearly half of 55 Baltimore neighborhoods have vacancy rates higher than 4%, according to a data analysis of Baltimore property records by The Baltimore Banner; the citywide vacancy rate stands at about 6%.

Vacancies in the Mondawmin neighborhood are at 13.5%, according to a Baltimore Banner data analysis, but Ellis and NHS think a concentrated, sustained investment of $100 million over 10 years, and a commitment to keeping current residents housed, will make a difference.

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But the calculus that led NHS to choose Mondawmin inevitably leaves deserving — and more costly — neighborhoods on the other side of the equation. In Sandtown-Winchester, for example, nearly one in four homes is vacant, according to a Baltimore Banner data analysis, but it has been excluded from major public and private investment in recent years.

“We, as nonprofit investors, have to make choices every day,” Ellis said. “Mondawmin is intentional and explicit: If we had more resources, we would do more.”

Ellis and other city officials intimately involved in Baltimore’s vacant housing crisis say the neighborhoods most in need of acute fixes will likely be the last ones to win large-scale redevelopment projects. As part of its latest strategy, the city is committing millions to so-called “middle-neighborhoods.” In general, these are areas with high concentrations of lower-, middle- and working-class residents who live near major institutions, those that are already partnering with for-profit and nonprofit developers, and where the housing department can assemble a so-called “critical mass” of vacant properties.

The scope of the problem is huge and new vacant homes pop up as quickly as existing ones are addressed. There isn’t enough money to tackle every neighborhood. And Baltimore lacks tools other cities have used to manage the problem, while the tools it does have — like eminent domain, tax sale and receivership — are often slow-moving or inadequate for the scale of the city’s problem.

The result is a vicious cycle: The worst homes get worse, the same neighborhoods grow or decline, and the vacancy rates stay mostly stagnant.

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‘Depressing’

Regarded as the birthplace of redlining, Baltimore’s population, like many other American cities, is spread out across largely segregated lines. Starting in the 1930s, banks excluded certain city neighborhoods — those classified as investment “risks” — from lending. Historic disinvestment in many of those neighborhoods continues to play out in disparities across education, health, income and opportunity.

By the mid-20th century, as federal and state segregationist policies loosened and allowed for some integration, white families fled for the suburbs in droves — a phenomenon that left many houses vacant. The loss of manufacturing jobs and the development of the nearby suburbs also lured families out of Baltimore. Investors from out of state began buying up the empty properties, allowing the homes to languish as they waited for returns. Many of the same neighborhoods have experienced high levels of vacancy for more than a generation.

At its peak, Baltimore housed more than 1 million residents, but according to the 2020 census, fewer than 600,000 residents live in Baltimore today — a fact made ever more apparent by the city’s surplus of empty houses.

The majority of vacant and abandoned homes are concentrated in East and West Baltimore, city data shows, though a large portion also exists in South Baltimore’s Brooklyn and Cherry Hill. These are the neighborhoods with vacancy rates greater than 4%.

Baltimore is unique among East Coast cities and cities with populations over 400,000 people, according to researchers at the University of Baltimore: While other cities are booming, Baltimore is shrinking.

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“The consistent pattern is depressing,” said Dr. Seema D. Iyer, associate director and research associate professor at the university’s Jacob France Institute, which runs the Baltimore Neighborhood Indicators Alliance. The research unit published a 10-year census audit in February and found that the city made little progress on reducing vacancies from 2010 to 2020. And neighborhoods that did make progress primarily saw vacant houses demolished, rather than rebuilt or preserved.

The research cohort found that a majority of BNIA community statistical areas — 36 out of 55 — saw virtually no change in vacancy rates in a decade. Meanwhile, with the exception of Brooklyn/Curtis Bay, and Midway/Coldstream, most of the communities that saw increases in vacancy were predominantly Black neighborhoods on the city’s west side.

But what that data fails to capture are neighborhoods’ vibrant histories, cultures, community anchors and strategic advantages that make them worth redeveloping anyway.

In Greater Mondawmin, for example, Jackie Caldwell, a resident for more than six decades, said residents can go from pre-kindergarten to college without ever leaving the neighborhood. She calls Greater Mondawmin the “greatest community in the world” and says NHS is a partner in making it even better.

Home to about 8,600 residents, Greater Mondawmin is about 87% Black, according to a Baltimore Banner data analysis. The median income stands at about $34,000, the BNIA data shows, and nearly 44% of its children live below the poverty line. Vacancies rose in the neighborhood by more than 8% over the 2010-2020 period, U.S. Census data shows.

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At the same time, nearly a third of its residents have a bachelor’s degree or above, according to BNIA data, and there are nearly 22 businesses in the neighborhood for every 1,000 residents. And nearly 30% of all the businesses are 5 years old or younger. The space formerly occupied by Target at Mondawmin Mall (the store closed in 2018) will soon be overhauled with a new commercial, retail and community resource hub called the TouchPoint Empowerment Center.

Momentum had been swinging in a positive direction, but Mondawmin’s image took a dive, Caldwell said, following the 2015 uprising sparked by the death of Freddie Gray in police custody. The neighborhood became synonymous with ruin and chaos instead of community and connection, she said.

“We have everything here we need — it’s just, we were suffering as far as the way we were positioned after 2015. We are going to bring it back to its glory,” said Caldwell, a past president of the Greater Mondawmin Coordinating Council. “NHS has been an asset to the neighbors and the community at large because we have another partner to get things done. We are heard and we are respected.”

NHS also has a record of success. More than four decades ago, a different group of leaders helped stabilize the neighborhoods around the city.

Starting in 1975, as residents left the city, a coalition of community members, banks and savings institutions, government officials, and nonprofit organizations emerged to keep the neighborhood intact. NHS of Baltimore, modeled on a like-minded organization in Pittsburgh, worked to keep the houses surrounding Patterson Park — and later Govans, Coppin Heights and others — occupied.

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While the city focused on “essential” services, such as keeping the roads clean and the streetlights bright, lenders made loans more widely available, especially to those who had not previously held mortgages. The nonprofits and community associations maintained the vacant lots and helped existing residents stay put. And an $8 million revolving loan fund from NHS helped homebuyers keep costs down, The Baltimore Sun reported at the time.

A row of dilapidated, boarded up vacant homes along N. Patterson Park Ave. (Ulysses Muñoz/The Baltimore Banner)

A drop in the bucket

A high-profile vacant house fire has refocused efforts on the problem. Aided by federal pandemic relief money, Mayor Brandon Scott and other officials have pledged to clamp down on the volume of vacant and abandoned properties that impair the city’s well-being like rotten teeth in a mouth. But some have called the city’s commitment level into question.

On a sunny Friday in March, a little over a month after the deadly fire that killed three Baltimore firefighters, Scott pledged $39 million in federal COVID-19 relief funds to help combat the vacant house crisis. Those funds, Scott said, will support building and bulldozing, upgrades to the city’s permitting system, housing enhancements for legacy residents, and more pathways for renters to become homeowners.

Officials have identified some 15,000 properties as vacant, according to city data, though many more likely exist. In all, the number of vacant and abandoned properties, which includes vacant lots, could exceed 30,000 units, according to the Baltimore Neighborhood Indicators Alliance.

The city owns at least 8% of the vacant properties. The rest are privately owned by individuals, nonprofits, and corporations, among others.

But even the city’s own assessment makes it clear how daunting the challenge is.

The city wants to replicate the block-by-block development approach happening in Mondawmin and elsewhere in seven neighborhoods: Broadway East; Coldstream Homestead Montebello; Druid Heights/Upton/Penn North; East Baltimore Midway; Johnston Square; Southwest Baltimore; and Park Heights.

Those areas were selected “to maximize the impact of limited municipal resources,” said James Bentley, a spokesperson for the mayor, in an email. He said the neighborhoods “engaged the concept of building from strength,” with each impact investment area “near an area of strength, institutional anchors and ongoing committed investments.”

A memo written by city administrator Christopher J. Shorter estimates the first phase of rehabilitation, more than 5,100 homes, will cost $103 million, with at least $80 million needed for each of four additional phases. In the first phase, plans call for $40 million just for developer incentives.

“It cannot be emphasized enough that substantially decreasing the City’s vacant property inventory will require a significant (at least hundreds of millions) capital investment,” the memo reads.

Community developers estimate that the total cost for eradicating vacancies citywide is closer to $1 billion. The median home price in the city stands at $245,000, according to Bright MLS data, and it can often cost more than that to rehab a vacant property.

Bree Jones, founder of Parity, an affordable housing development and homeownership company in Baltimore, said she has begun making appeals to local CEOs and institutional leaders about creating a citywide fund dedicated to vacant property acquisition. From there, more could be obtained in construction, business and mortgage loans, she said, supplementing what the city is spending rehabbing vacant properties.

“Vacancy in the city is a large challenge, but it’s a solvable one, and I’m biased, but I think that’s the core issue,” said Jones, who is focusing on acquiring and rehabilitating homes in a small section of Harlem Park.

Similar to Parity and NHS, ReBUILD Metro zeroes in on individual blocks in East Baltimore, though it also co-develops rental units at apartment buildings with management companies. In Oliver, Broadway East and now Johnston Square, the organization has developed three apartment buildings and 175 single-family homes. Of its inventory, 99% of the units are occupied, ReBUILD Metro president Sean Closkey said.

“Financing this stuff is reasonably difficult,” Closkey said. “Vacancy is growing like a cancer and at a rate that is ultimately going to hull the city out or set the city up for other types of gentrification. And if you can see it before it happens, you need to intervene.”

According to ReBUILD Metro, the organization has reduced vacancy in its initial footprint by 84%: Before its intervention started in 2009, there were 243 abandoned properties in Oliver and Broadway East. Now there are about 40, but the group owns 12 of them.

Those neighborhoods have advantages that can’t be replicated everywhere: They’re close to Johns Hopkins Hospital as well as Baltimore Penn Station, and have active community groups that have taken on much of the organizing work.

Closkey says government needs to commit to fully funding vacant properties until the problem is resolved.

“When we put houses in some neighborhoods, they fall below market price,” Closkey said. “The public sector needs to resolve that problem.”

“Vacancy is growing like a cancer and at a rate that is ultimately going to hull the city out or set the city up for other types of gentrification. And if you can see it before it happens, you need to intervene.”

Sean Closkey, president, ReBUILD Metro

6/8/22—A row of vacant homes on the 1700 block of E. Biddle street are being renovated by Rebuild Metro.
A row of vacant homes on the 1700 block of E. Biddle street are being renovated by ReBUILD Metro. (Ulysses Muñoz/The Baltimore Banner)

Who owns the properties?

Money isn’t the only challenge for the city in eliminating vacant homes. Often it can be difficult — even impossible — to determine who owns properties. And with property rights so ingrained in U.S. law, even abandoned properties can be difficult to pry away from their owners.

Of the roughly 15,000 houses the city identifies as vacant, more than one-quarter are owned by limited liability companies, Open Baltimore data shows. LLCs afford members protection from debt and other penalties. And LLCs can operate in Maryland without supplying much identifying information about their agents, i.e., the people who handle tax and legal responsibilities.

There are financial and tax incentives to letting properties sit and languish, said Kristine Dunkerton, an attorney and executive director of the Community Law Center in Baltimore, which represents neighborhoods and nonprofits. Those who own several underwater properties can claim them as business losses, she said, making them eligible for tax refunds. It can sometimes cost more to follow through with a foreclosure than do nothing.

Dunkerton has pushed for statewide legislation that would require more transparency from limited liability companies that operate in Maryland. Bills introduced in the Maryland General Assembly in the 2013-2016 sessions called for company filings to include a company representative’s name, street address, telephone number and email address. On all four attempts, it failed to advance out of committee. Dunkerton tried limiting the scope of the bill to include just limited liability companies that hold residential properties in Baltimore, but that, too, failed to gain traction.

“Trying to locate who is responsible for [a given] property is a nightmare, if you can even do it,” she said. “LLCs are such a huge piece of this problem that could be fixed, at least incrementally, if the legislature would take some action.

So-called “cloudy” ownership can also befall a house when an owner dies but doesn’t have a clear beneficiary. In these cases, city officials and potential investors often try tracking down the heirs, which may lead to dead ends. In Jones’ experience with Parity, about a third of the properties she has sought to acquire have been owned by deceased individuals. Another third are held by defunct LLCs, she estimates.

Cloudy ownership cases may sometimes resolve themselves if the owner of the property stops paying taxes. Beyond a $750 debt for owner-occupied properties, or $250 for non-occupied properties, the house may wind up in the tax sale system, which allows third-party investors to purchase the lien. Homeowners must then reimburse the investor, with interest, or else risk losing the home.

In Baltimore, tax sale disproportionately impacts Black homeowners and communities. Homes owned by Black people represented 84% of the more than 4,000 owner-occupied homes initially on the tax sale list this year, and 81% of the homeowners were older than 60, according to data from the Pro Bono Resource Center of Maryland. Facing pressure from housing justice advocates and community activists, Scott removed about 2,900 owner-occupied homes from the list right before the official deadline.

A row of vacant homes sits empty on E. Preston St. (Ulysses Muñoz/The Baltimore Banner)

More, ‘better’ tools

Aside from tax sale, city officials and developers rely on two other tools to acquire property: receivership, a code enforcement mechanism, and eminent domain, in which the city can seize property for “public use” projects. The city files about 500 receivership cases a year, housing department spokesperson Tammy Hawley said, designed “to get properties into the hands of owners who will properly maintain them.”

In receivership, a court-appointed “receiver” can take temporary custody of a home with code violations and can sell the property to the highest bidder at auction. But even receivership cases have their limits: The auctions can easily price out community and nonprofit developers, not every property will be receive a bid, and even those that do get sold may wind up back in the system if a new owner doesn’t follow through.

“It’s a market-based approach, which is part of its success and a criticism,” said Pia Heslip, executive director for One House at a Time, the city’s residential property receiver. “We’ve always known we’re not a one-size-fits-all.”

One new tool could mean quicker turnaround of vacant properties in a broader selection of city neighborhoods. City officials pushed for a statewide law in 2019 to allow judicial “in rem” foreclosure, based on recommendations from the Center for Community Progress, a national nonprofit that helps cities and towns address vacant and blighted housing. The process could help Baltimore find more community-based owners and stewards, said Kim Graziani, Center for Community Progress’ senior technical assistance advisor.

The phrase “in rem” is a Latin legal term that means “against a thing.” It is a potential solution to a court not having jurisdiction over a person or property owner, allowing government officials to work around derelict owners.

When launched officially this year, judicial in rem will enable the city to remove homes from the tax sale list and foreclose on liens when they exceed assessed property values. Once the city acquires title, officials can hand-pick where they go next (already, the housing department is reaching out to nonprofit and community developers, such as Parity’s Jones, and asking them to make lists of properties they might want). They hope to condense the foreclosure timeline to a 6-8 month process; cases can take years using any of the standard tools.

City Councilwoman Odette Ramos, who has engineered many of the city’s recent housing bills, said officials have worked with the courts to create a separate docket for in rem cases. They’ve hired 12 title attorneys and paralegals just for these cases.

Ramos envisions the docket eventually processing up to 25 cases a week, or about 1,000 a year. The court is expecting to start seeing cases this summer, she added.

Empty liquor bottles and rubble sits on the porch of a dilapidated vacant home on N. Gay St. (Ulysses Muñoz/The Baltimore Banner)

Ramos and Graziani said a land bank — a quasi-governmental entity that has acquisition and transfer powers — could ideally take on the work of clearing titles and finding new, responsible owners, thereby absolving the housing department of that responsibility. But the housing department is opposed to land banks, Ramos said. Hawley, of the housing agency, did not respond to inquiries about the department’s stance.

For Jones, a land bank would solve many of the hurdles she’s encountered since moving to Baltimore a few years ago. The homes she’s sought to take ownership of come with high legal fees and acquisition challenges, making her work difficult to scale. A land bank, she said, would have special statutory powers that would ease the process: “If there’s no land bank, we effectively have to land bank for ourselves,” she said.

Jones said having an oversight board to monitor who the land bank opts to give properties to — consisting of agency officials, community figures, housing justice advocates and homeowners — would start a new, clean slate for Baltimore that could reverse some of its historic wrongs.

“The good thing about a land bank is that its only focus is acquisition and disposition, so it doesn’t have to get distracted,” Jones said. “And what’s exciting is that you start fresh, with equity at the foundation.”

For now, Ramos said in rem and its fast-moving powers could help move several properties in capital-deprived neighborhoods at once. Bundled together, this can reduce costs and help developers move forward in neighborhoods they might otherwise avoid.

She said she won’t push the city to start a land bank — at least not yet.

“The city continues to use a ‘build from strength’ lens, but I think we need to start from where we need it most, where neighborhoods have been struggling the longest,” Ramos said. “We need to interrupt that market, work with community, not make the mistakes of the past.”

hallie.miller@thebaltimorebanner.com

ryan.little@thebaltimorebanner.com

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