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Broken windows, busted real estate market

Alana Semuels May 7, 2014

Broken windows, busted real estate market

Alana Semuels May 7, 2014

Building inspector Derrick McCall spends much of his day in a noisy city truck making his way through a list of 25,000 vacant properties in Philadelphia.

He’s part of a novel new program that seeks to get landlords to do something about the city’s vacant buildings, and make the city money at the same time. His goal: to make sure every vacant home in Philadelphia has working doors and windows.

“I’ll go by a property to see the condition, to see if it has boarded doors and windows, and attempt to bring it to compliance,” said McCall, a burly man who drives a gurgling city truck through some of Philadelphia’s toughest areas.

If McCall does find a home with boarded-up doors and windows, he’ll staple a bright pink poster on the door, informing the owner that the building is in violation of a law that prohibits boarded-up doors and windows. The fine: $300 per opening, per day. Owners must go to Blight Court to fight the fine.

Building inspector Derrick McCall

Building inspector Derrick McCall pauses at a home in Philadelphia after citing it for doors and windows violations and posting a pink poster on the door to inform the owners. 

The idea: force building owners to fix up their homes and make them habitable, or sell them to someone who will.

“We can make them do something now,” said Rebecca Swanson, who runs the city’s vacant property strategy. “If we can catch them now, we can get to the point where we can save it from being something that falls into disrepair.”

The city came up with the strategy after realizing it was spending millions a year on tearing down blighted properties, but that newly decrepit homes seemed to be popping up every year. And it was costing a lot to tear down the homes – around $15,000 each, a big deal in a city constantly strapped for cash.

The initial goal of the strategy was to prevent homes from falling into disrepair, but other benefits have emerged, Swanson said. After spending the money to fix the doors and windows, landlords are deciding to spend an extra bit of money so they can fix their properties enough to rent them out. All those permits for fixing their homes and renting them out make the city money.

The city points to the neighborhood of Francisville, now bustling with new development, as an example of a place where the city’s strategy has led to a makeover for an entire area.

“We found all these tangential benefits as we’ve gone along,” Swanson said.  “Increased tax collection, improved neighborhoods, getting more revenues through licensing and permits.”

A study by the Reinvestment Fund, a group that finances neighborhood revitalization, found that the strategy led to a 31 percent increase in home prices in the neighborhoods targeted by the city. Comparable neighborhoods saw home prices rise just 1 percent.

Philadelphia has many row houses

Philadelphia has many row houses, so decay in one house can affect another quickly and bring down property values.

“Essentially, if you’re smart and you’re targeted and you’re focused, and you send a very clear market signal that blighting properties are not going to be tolerated in a place,” said Ira Goldstein, who authored the study.

Before, Goldstein said, there was a perception in Philadelphia that landlords could hang onto vacant buildings for a long time, and that the city wouldn’t do anything about them. That perception has now changed because of the enforcement strategy, he said.

But there are still some owners that the city can’t reach. Though it used a database also used by the IRS, it hasn’t been able to find all of the property owners who own vacant homes in the city. That’s why the home next to James Culler is falling into disrepair, even though he’s called and complained many times.

$300 for each boarded-up door or window

Philadelphia has started enforcing a law that would fine the owners of buildings like this one $300 for each boarded-up door or window in an effort to get owners to fix up the buildings. 

As Derrick McCall walks up the rickety concrete steps to inspect the home, Culler sticks his head out of his door and asks if the city is finally doing something about the house that’s attached to his.  Vagrants keep breaking in and he’s worried they’ll burn the place down.

“My wife done called a couple of times, ain’t nobody respond,” Culler said to McCall.

“It is in the system, to try and get the owners to repair the doors and windows,” McCall assures him. “It’s a slow process, but it does work.”

It’s a lesson other cities, like Detroit and Buffalo that have thousands of vacant properties to deal with: cleaning up blight takes time. But it does work.  Eventually. 

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