City seeking ways to deal with vacant properties

Neighbors have watched for more than two years while a house at 2738 Bryant Ave. S. was purchased to flip, languished on the market, erupted into flames and was eventually boarded.

The home stands on an otherwise well-kept street with a stroller on one porch and flower baskets on another. One neighbor said he wondered if vagrants broke into the building before it was boarded.

"Seems kind of odd, they fixed it all up and they couldn’t sell it, and all of a sudden it burned," said the neighbor, who declined to give a name.

The number of vacant and boarded buildings in the city climbed 77 percent this year over last year. City officials say the trend has mirrored a rising number of foreclosures, and they are looking to spend a multimillion-dollar federal grant on the issue to curb problems that vacant homes create.

The National Vacant Properties Campaign reports that in some cities, blocks with boarded buildings see twice the amount of violent crime and three times the number of narcotics-related police calls. The organization also reports that houses within 150 feet of a vacant or abandoned structure can experience a net loss of nearly $8,000 in value.

North Minneapolis has borne the brunt of the foreclosures and vacant homes in the city, and Southwest has a relatively small number of vacant buildings. The current tally is 17 in Whittier; six in Lyndale; four in Lowry Hill; three in Windom; two apiece in Kingfield, East Isles, and Lowry Hill East; and one each in Kenwood, Stevens Square, Tangletown, CARAG and ECCO. Southwest has also escaped the worst of the city’s foreclosure problem, but five of its neighborhoods were highlighted in a city report as being at risk of more foreclosures and abandonment.

The neighborhoods flagged as high risk included Lyndale and portions of Kingfield, Lowry Hill, Whittier and Windom.

About 15–25 percent of homes in those neighborhoods have high-cost loans, according to the city. The U.S. Department of Housing and Urban Development estimates that about 4 percent of the neighborhoods’ housing stocks could run into foreclosure problems in the next 18 months.

The city is accepting $5.6 million from HUD to spend in neighborhoods at risk for more foreclosures, such as the neighborhoods mentioned above.

One of the city’s strategies is the demolition of vacant housing. The city is working to demolish at least 50 vacant houses this year, and the city would spend another $1.7 million in federal money to demo 100 more homes in the next five years.

Following demolition, the city would hold the vacant parcels in a land bank for no more than 10 years and then offer them up for development into new housing.

There was only one Southwest building on the city’s list to demolish by the end of the year. It was the site of the burnt-out Lee’s Cleaners and Launderers store at 101 E. 26th St.

The mayor is proposing more than the demolition of problem houses, however.

Another $500,000 in federal funding would go to an affordable housing program that would help people with low incomes move into homes that have gone into
foreclosure.

A similar affordability program called Minneapolis Advantage has proven very popular, according to Mark Anderson, the city’s senior contract management specialist. Within a few weeks of the program’s inception last April, he said, all $500,000 in loan money was gobbled up. Most of the money went to pay closing costs on homes, he said, but the funding also went toward down payments on homes in neighborhoods hard hit by foreclosures. Eighty percent of the applicants that have closed on homes so far are in the heart of North Minneapolis, Anderson said. Whittier was the only Southwest neighborhood previously eligible for the program, but the new loans would be offered citywide with priority given to high-risk neighborhoods, such as Lyndale and portions of Kingfield and Lowry Hill.

Another $1.4 million of the federal money would go to parties who would rehab vacant homes for affordable housing. That prospect is a tough sell to developers that wouldn’t see much profit in the bargain, according to the city’s multifamily housing manager, but the work would be a huge boon for neighborhoods.

"Instead of having a vacant home sit there that’s always under threat of [vandalism] and who knows what, certainly to put it back into production and get someone living there is good for the neighborhood," said Wes Butler. "It’s going to be a good program."

The neighbor at the 2700 block of Bryant reports that a few parties have recently toured the block’s vacant house, and he hopes it will sell — any other house on the block would have no problem selling, he said.

"It’s just getting the right people to buy it and invest in it, and it would be wonderful," he said.

Reach Michelle Bruch at 436-4372 or [email protected]