Mounting Costs of Demolition

Demolition of vacant and abandoned housing is a topic of growing importance, especially for legacy cities in the industrial heartland.  In some cities the controversy is over whether to mount a major demolition program, while in others the question is how to get more resources to accelerate demolition efforts.

In Alan Mallach’s new report published last week by the Brookings Institution, he makes the case for a strategic approach to demolition, and offers policy guidelines for making decisions on where and when to bring down vacant and abandoned housing.  While his preference is for preservation and rehabilitation, he also recognizes the necessity of strategic removal.  He further acknowledges that less than perfect decisions must be made, due to the lack of financing for both preservation and demolition.

Also announced last week, the City Council in Cleveland, Ohio released a brief report building the case for demolition on an ASAP basis.  It estimates that the annual cost of an average abandoned vacant house in Cleveland is $27,000, three times the cost of demolition.  With the $6 million the City allocates annually for demolition, it can take down only two of the eight houses it designates daily as solid waste for disposal.  Currently, there are 8,500 houses needing to be demolished, and in 5 years that number will increase to 13,500 if the demolition rate remains the same.

At the current pace and financing level, it will take 22 years and $4.5 billion to dispose of unusable houses in Cleveland.  That is $11,500 for every resident in the City. 

Cleveland Councilman Anthony Brancatelli took this message to a hearing of the U.S. Treasury Department’s interagency meeting on Residential Property Vacancy, Abandonment and Demolition.  He, along with Jim Rokakis, Ohio’s lead advocate for county-wide land banking, urged for increased federal funding to deal with this crisis. The sale of distressed dwellings by Fannie Mae and Freddie Mac to speculators is a major factor in the spread Cleveland’s housing blight. In addition, the City is also taking action by looking for ways to impose the cost of demolition back onto businesses that dump their blighted houses on the public.

Early signs of a recovery in the housing market are welcome, but should not obscure the harsh reality that vacant and abandoned dwellings will remain for decades and cost billions.

Post by: Kermit J. Lind, Professor of Law, Cleveland State University