Report touts rise in property values from blight demos

Cleaning up blight in Detroit seems to be paying off even faster than hoped for.

A new report commissioned by the Skillman Foundation and Rock Ventures, the company founded by businessman Dan Gilbert that helped pay for Detroit's Blight Removal Task Force Report last year, came up with some surprisingly upbeat results this week.

A study titled "Estimating Home Equity Impact from Rapid, Targeted Residential Demolition in Detroit" reported that each individual demolition in the so-called Hardest-Hit zones in Detroit increased the value of occupied single-family homes within 500 feet by 4.3%

And the study suggested that Detroit's current mix of demolitions, vacant-lot clean-ups, sales of side lots to neighbors, auctions of homes by the Detroit Land Bank Authority, and other tactics are boosting overall property values in these Hardest-Hit zones by up to 13.8%.

The Hardest Hit zones are defined by a federal program meant to alleviate the scourge of mortgage foreclosure in the nation's hardest-hit cities. The City of Detroit received some $100 million under the program and has devoted that money to blight-removal efforts.

Overall, the study showed an estimated increase in total home equity of more than $209 million following the blight demolitions.

Dynamo Metrics, a small firm based in Detroit and Lansing that does data analysis, performed the study in partnership with the City of Detroit. The report details can be found at DemolitionImpact.org.

This new report is just the latest entry in a growing body of national research that supports the idea that blight removal pays off almost immediately in improved property values and even in crime reduction.

Susan Wachter, a professor at the University of Pennsylvania who has studied blight remediation carried out by the nonprofit Philadelphia Green organization in that city, found that vacant-land improvements boosted surrounding home values by as much as 30%, which she called an "astonishingly large impact."

And a 10-year study conducted by the Perelman School of Medicine at the University of Pennsylvania in Philadelphia found that greening vacant lots reduced gun assaults and other types of crime in those neighborhoods. Residents living near greened lots reported less stress and they exercised more, improving health outcomes.

In one perhaps odd result, the Philadelphia research found that complaints about disorderly conduct rose once trash-strewn lots were cleaned up. But that may mean that neighbors, enjoying the benefits of blight removal, grow less tolerant of rowdy behavior and are more willing to call it in to police.

Similar upbeat findings have been reported in Cleveland when blight removal programs have been studied.

Brian Farkas, head of special projects for the Detroit Building Authority where he oversees the city's demolition efforts, said leaders are thrilled with the results of the survey showing real gains in property values from the city's blight campaign.

"I'd say we're off to a great start," Farkas said last week. "We're clearly not done yet. But we're seeing the needle move in the right areas."

In the past 18 months, the city has demolished about 7,000 blighted structures, concentrating efforts in given areas. Last week, for example, contractors hired by the city demolished 10 eyesore houses near Alter Road and Kercheval on the city's far eastern border with Grosse Pointe Park. Stacy Franklin, 44, a resident who has lived more than 30 years on Alter and saw the neighborhood decline over the years, said she was happy with the clean-up effort.

"I feel wonderful about it. Take away the eyesores," she said.

Demolition is just part of the city's war on blight. Since early 2014, the Detroit Land Bank Authority has closed on 370 properties auctioned to new owners, sold some 2,200 side lots to neighbors, and filed nearly 4,000 nuisance abatement suits against property owners, all according to the new report on property values.

It's a good record, and certainly well ahead of what Detroit was accomplishing in earlier years, but multiple challenges remain. Even at the brisk pace set by the Land Bank and Building Authority, Detroit's blight removal efforts have barely dented the problem. The more than 12,000 properties addressed so far through the various tactics represent no more than perhaps 15% of the total blighted buildings and vacant lots in the city, which total well more than 100,000 eyesore lots and structures.

So much more needs to be done, and money to do it long-term has yet to be identified. The federal Hardest Hit funds are tapped out. Mayor Mike Duggan has been lobbying Washington, D.C., to find a new source of funds.

And as the report notes, "Blight is not a static challenge. The cancer continues to grow and spread in areas where it is not being addressed."

But if nothing else, the report on Detroit's efforts supports those who believe spending some of our tax dollars on blight removal pays off not just in the long term but in the immediate here-and-now, too.

"The important thing about this study is that it got away from just thoughts and emotions to actual data driving that this is a good investment," Deb Dansby, vice president of Rock Ventures, said. "Even though it’s early on, it’s really what the city needed to be able to make the case to get the rest of it funded."

Or, to put it another way,rising property values, reduced crime, and more attractive neighborhoods are benefits that everyone can understand.

Contact John Gallagher: 313-222-5173 or gallagher@freepress.com. Follow him on Twitter @jgallagherfreep.