Baltimore leaders propose ‘landmark’ $8 billion plan to confront vacant housing

A coalition of Baltimore faith and business leaders and Mayor Brandon Scott’s administration Monday unveiled an estimated $8 billion plan to revive thousands of vacant and abandoned homes funded by the city, state and private donors.

The coalition, which joined forces earlier this year, proposes spending $3 billion in public funds to leverage another $5 billion in private funds. The money would be put toward rehabilitating, demolishing and beautifying at least 35,700 vacant and “at-risk” properties, empty lots and occupied homes across Baltimore, including in neighborhoods that typically don’t see much government investment.

Scott’s office pledged to invest at least $300 million over 15 years from the city, including creating a new tax increment financing district to borrow money and repay that loan with newly generated tax revenue from rehabbed homes. The spending would be structured such that it could continue even after Scott leaves office.

“The era of piecemeal work and backwards-looking strategies is over,” Scott said in a Monday statement.

Monday night, at an event to build support for the plan, Scott pledged to eradicate vacant homes “once and for all,” saying it would take 300 years to make a dent in the city’s surplus tally at its current pace of investment.

“Does Baltimore have 300 years to wait?” he asked the crowd.

Representatives from the three organizations — Scott’s office, the Greater Baltimore Committee and BUILD Baltimore, an interfaith community organizing group — hailed the agreement as historic in nature and comprehensive in form. But $3 billion is a big request with both the state and city projecting shortfalls in their multiyear budget planning.

After declaring their intent to partner on vacant housing strategies over the summer, the group tasked Public Financial Management, a consulting firm, to research the policies and financial resources needed to accelerate remediation of Baltimore’s decadeslong challenges with blight.

The group concluded that the $3 billion investment would “more than pay for itself over time,” according to the Public Financial Management report released to the coalition this month. It promised “transformative impact” for Baltimore if the group could maintain focus for 15 years.

“This investment is at a wholly different scale. It will spark a new redevelopment industry in Baltimore and will require innovative approaches and tools,” the report says.

With more than 13,000 properties in Baltimore’s official tally, vacant housing poses daily threats, headaches and problems for those who live and work in the city. Homes have fallen and crushed passersby; caught fire and killed first responders; and reduced property values in neighborhoods across the city. The complexities of remediating the problem have confounded government leaders for decades due to the expense and legal hurdles.

The advisory firm put forward a series of recommendations to address both the policy and financial hurdles, including:

• Issuing noncontiguous, or citywide, tax increment financing bonds, to fund public infrastructure costs and repay it with future property taxes generated by redeveloped homes.
• Reactivating the city’s Industrial Development Authority, an economic development arm, to issue bonds.
• Carving out new local revenue streams, including a local share of state sales tax receipts from the city.
• Using social impact bonds and other philanthropic donations.
• Soliciting $900 million over 15 years from the state.

The strategy advisement comes as both city and state leaders voice budget concerns. Just last week, state transportation officials said several projects in the state could be delayed and local transit services could be scaled back as a result of a more than $3 billion shortfall in funding for Maryland’s six-year transportation plan. And in August, Gov. Wes Moore first gave sober warnings about the state’s finances, saying Maryland could face a projected deficit of $1.8 billion by 2028 if state leaders failed to take action now.

Baltimore budget advisers, meanwhile, have cautioned that the city is facing a $100 million or more financial shortfall next year primarily due to increased state-mandated contributions toward schools. The city’s budget director told members of the City Council last week that the office projects running a small deficit in the first quarter of the current fiscal year. And city finance officials cautioned that the cost of an affordable housing bill approved by City Council earlier this month would further strain a fragile budget.

Hundreds of people packed the pews Monday night at Greater Harvest Baptist Church in Southwest Baltimore for a a call to arms for mass advocacy. Speakers again and again invoked Nehemiah, the biblical figure who rebuilt Jerusalem during the Second Temple period, which began more than 500 years before the birth of Jesus Christ.

“Do you think Nehemiah built those walls of Jerusalem all by himself? Or it was just a few people?” asked Rev. Cristina Paglinauan near the close of the meeting.

“No!” members of the crowd responded.

“No,” she agreed. “Nehemiah got lots of different groups of people, all kinds of people, all committed, all working hard together to rebuild those dilapidated, crumbling, boarded-up walls of the city that he loved.”

Speakers at Monday night’s event said the investment would turn a page on decades of false promises and misplaced priorities.

“For as long as I’ve been alive, leaders in our city have pursued a strategy of investment in Downtown with a promise to us and to our neighbors that the wealth invested there would eventually fill up the pools of prosperity so high that it will overflow uptown in the form of jobs and safety and education and wealth,” said Rev. Andrew Connors during remarks, drawing boos from the audience.

State leaders now have a chance to flip the narrative, he added: “If we can find close to $1.5 billion in lean times for our football and baseball teams, if we can find hundreds of millions of dollars for the Inner Harbor for a second time, then we all know we can find money for a first-time investment in our neighborhoods.”

City Councilwoman Odette Ramos was among those who cheered the prospect of major investment Monday.

But Ramos, who formerly led the Community Development Network of Maryland and has been sounding alarms on the city’s vacant house surplus for years, said the additional funding represents only a slice of what’s needed to address Baltimore’s challenges.

For example, Ramos said, the city owns about 1,000 of the city’s abandoned homes and about one-half of all vacant lots, and yet the inventory remains virtually unchanged year-to-year. She called on the city to increase its capacity to use its existing tools — including judicial in rem foreclosure, which can help the city seize titles and clear tax liens — in addition to creating new ones.

And even with more funding, Ramos said that more work needs to be done to ensure that Baltimore has diverse programs to meet the demands for housing — and that housing access isn’t restricted to certain neighborhoods.

“Development without displacement will take major investment in home repair for older adults aging in place and ensuring that all properties are up to code,” Ramos said in a statement. “It will take a commitment to affordable homeownership and rental options, and creativity in financing to meet our equitable development goals.”

The city also must work to find ways to end speculative practices that drive up housing costs in neighborhoods and fuel flight out of Baltimore, Nneka N’namdi, founder and chief operating officer of Fight Blight Bmore, a housing justice nonprofit.

N’namdi has called for more funding for community organizations and advocacy groups to help with unforeseen costs that can burden renters and homeowners; a citywide awareness campaign that empowers communities to spot predatory real estate practices; and a “strike team” to monitor and put forward solutions for those at risk of losing their homes.

In its analysis, Public Financial Management, the advisory group that consulted for the city coalition, argued that while the $3 billion figure may seem high, the city and state stand to lose far more if they stay the current course and fail to invest at scale.

It cited last year’s report from researchers at the Johns Hopkins University estimating the yearly costs of vacant and unoccupied housing at $200 million — $100 million from lost property tax revenues, and $100 million spent on maintenance and first-responder calls. The researchers also examined “unmeasurable” costs, including crime, public health and population loss.

Should the city tackle the problem by 2040, the consultants wrote, officials would see a larger tax base, higher property values, reduced expenditures on demolition and maintenance and more jobs in construction and building. It also could infuse cash into neighborhoods with the highest concentration of vacant properties that have been skipped by city investment in favor of “middle” neighborhoods with existing economic anchors or private investment streams.

The report also examined two East Baltimore neighborhoods — Greenmount West and Oliver — that have used a combination of public and private funding to address vacant housing at scale. With a “block-by-block” approach that systematically renovates and removes problem properties in both neighborhoods, both have more than doubled their tax bases since 2011, according to the study.

Public Financial Management also promoted the use of an “existing financial vehicle,” such as the Maryland Stadium Authority or the Maryland Economic Development Corp., or the creation of a new one, to oversee the work, which could increase potential investors’ confidence that the program would be sustainable even when new mayors take over in Baltimore or governors in Annapolis.

Left unaddressed by their analysis is what would happen should the state decline to approve the request for nearly $1 billion over 15 years, or who will lead the appeal to state lawmakers for the plan.

Scott, during remarks, said progress may not be felt overnight, or even within the next year. But that’s what the other 14 years are for, he said.

Hallie Miller

hallie.miller@thebaltimorebanner.com

Hallie Miller covers housing for The Baltimore Banner. She's previously covered city and regional services, business and health at both The Banner and The Baltimore Sun.

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