Blighted Cities Prefer Razing to Rebuilding

On November 12, The New York Times published an article titled Blighted Cities Prefer Razing to Rebuilding.

Blighted Cities Prefer Razing to Rebuilding

BALTIMORE — Shivihah Smith’s East Baltimore neighborhood, where he lives with his mother and grandmother, is disappearing. The block one over is gone. A dozen rowhouses on an adjacent block were removed one afternoon last year. And on the corner a few weeks ago, a pair of houses that were damaged by fire collapsed. The city bulldozed those and two others, leaving scavengers to pick through the debris for bits of metal and copper wire.

“The city doesn’t want these old houses,” lamented Mr. Smith, 36.

For the Smiths, the bulldozing of city blocks is a source of anguish. But for Baltimore, as for a number of American cities in the Northeast and Midwest that have lost big chunks of their population, it is increasingly regarded as a path to salvation. Because despite the well-publicized embrace by young professionals of once-struggling city centers in New York, Seattle and Los Angeles, for many cities urban planning has often become a form of creative destruction.

“It is not the house itself that has value, it is the land the house stands on,” said Sandra Pianalto, the president and chief executive of the Federal Reserve Bank of Cleveland. “This led us to the counterintuitive concept that the best policy to stabilize neighborhoods may not always be rehabilitation. It may be demolition.”

Large-scale destruction is well known in Detroit, but it is also underway in Baltimore, Philadelphia, Cleveland, Cincinnati, Buffalo and others at a total cost of more than $250 million. Officials are tearing down tens of thousands of vacant buildings, many habitable, as they seek to stimulate economic growth, reduce crime and blight, and increase environmental sustainability.

A recent Brookings Institution study found that from 2000 to 2010 the number of vacant housing units nationally had increased by 4.5 million, or 44 percent. And a report by the University of California, Berkeley, determined that over the past 15 years, 130 cities, most with relatively small populations, have dissolved themselves, more than half the total ever recorded in the United States.

The continuing struggles of former manufacturing centers have fundamentally altered urban planning, traditionally a discipline based on growth and expansion.

Today, it is also about disinvestment patterns to help determine which depopulated neighborhoods are worth saving; what blocks should be torn down and rebuilt; and based on economic activity, transportation options, infrastructure and population density, where people might best be relocated. Some even focus on returning abandoned urban areas into forests and meadows.

“It’s like a whole new field,” said Margaret Dewar, a professor of urban and regional planning at the University of Michigan, who helped plan for a land bank in Detroit to oversee that city’s vacant properties.

In all, more than half of the nation’s 20 largest cities in 1950 have lost at least one-third of their populations. And since 2000, a number of cities, including Baltimore, St. Louis, Pittsburgh, Cincinnati and Buffalo, have lost around 10 percent; Cleveland has lost more than 17 percent; and more than 25 percent of residents have left Detroit, whose bankruptcy declaration this summer has heightened anxiety in other postindustrial cities.

The result of this shrinkage, also called “ungrowth” and “right sizing,” has been compressed tax bases, increased crime and unemployment, tight municipal budgets and abandoned neighborhoods. The question is what to do with the urban ghost towns unlikely to be repopulated because of continued suburbanization and deindustrialization.

“In the past, cities would look at buildings individually, determine there was a problem, tear them down and then quickly find another use for the land,” said Justin B. Hollander, an urban planning professor at Tufts University. “Now they’re looking at the whole DNA of the city and saying, ‘There are just too many structures for the population we have.’ ”

Cleveland, whose population has shrunk by about 80,000 during the past decade to 395,000, has spent $50 million over the past six years to raze houses, which cost $10,000 each to destroy, compared with $27,000 annually to maintain.

Some neighborhoods have lost two-thirds of their residents since 2000. There are so many vacant lots that the city, now home to more than 200 community gardens and farms, zones for urban farms and allows people to keep pigs, sheep and goats in residential areas. A vineyard has popped up as well.

Two miles northwest of the Gateway Arch in St. Louis, which has at least 6,000 vacant buildings, is an uninhabited deciduous forest where a sprawling 74-acre housing development once stood before the city demolished it because so few people lived there.

Philadelphia, which has 40,000 vacant lots, has promoted the benefits of lower-density living by allowing people in largely vacant neighborhoods to spread out to the lot next door — where a neighbor’s home once was. The city has been studying a plan to sell $500 leases to urban farmers. One such farm, Greensgrow, which was built on a former Superfund site, sold $1 million in produce in 2012.

Baltimore has begun to turn over vacant lots to groups of amateur farmers. Boone Street Farm, boxed in by abandoned rowhouses on an eighth of an acre, is completing its third season of growing tomatoes, spinach, sweet potatoes and other fruits and vegetables in the city’s Midway neighborhood. It sells produce to restaurants, has a table at a local farmers market and delivers $10 boxes of produce weekly to members of its community-supported agriculture program.

But even as they bulldoze thousands of vacant houses, Baltimore and other shrinking cities have continued to seek new people.

“I’m trying to grow the city, not get smaller,” said Stephanie Rawlings-Blake, Baltimore’s mayor, about the notion that the city could be fine with between 500,000 and 600,000 people. “I’m not the first to say that a city that’s not growing is dying.”

Baltimore lost nearly 110,000 jobs from 1990 to 2010, about 23 percent, and has seen its population drop from 950,000 in 1950 to 621,000 today. The city has 20,000 vacant buildings and lots, and more than one house in eight is vacant.

Mayor Rawlings-Blake wants to attract 10,000 families to the city within a decade and has reached out to immigrants, gays and lesbians (Maryland allows same-sex marriage), and Orthodox Jews who might want to buy newly refurbished three-story rowhouses that the city is selling for as little as $100,000.

At least one city that has taken a pioneering approach to confronting diminution has found that accepting shrinkage does not mean problems go away. Youngstown, Ohio, once a bustling steel city of 170,000 but now with only 66,000 people, has sought to head off collapse by tearing down thousands of vacant houses — 3,000 so far and 10 more each week.

But while the city had planned on a stable population of 80,000, more than 1,000 people move away every year, leaving behind 130 additional empty homes in addition to the city’s 22,000 vacant properties and structures. Four thousand of those homes are in dangerous condition, according to the city, but each demolition costs $9,000 and the city has yet to decide whether to close nearly abandoned neighborhoods to try to save money.

“It’s almost anti-American to say our city is shrinking,” said Heather McMahon, the executive director of the Mahoning Valley Organizing Collaborative, a Youngstown community group.

“But if we’re going to survive as a city and not go bankrupt like Detroit,” she said, “we’re going to have to figure something out.”

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About Safeguard 
Safeguard Properties is the largest mortgage field services company in the U.S. Founded in 1990 by Robert Klein and based in Valley View, Ohio, the company inspects and maintains defaulted and foreclosed properties for mortgage servicers, lenders,  and other financial institutions. Safeguard employs approximately 1,700 people, in addition to a network of thousands of contractors nationally. Website: www.safeguardproperties.com.

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CEO

Alan Jaffa

Alan Jaffa is the Chief Executive Officer for Safeguard Properties, steering the company as the mortgage field services industry leader. He also serves on the board of advisors for SCG Partners, a middle-market private equity fund focused on diversifying and expanding Safeguard Properties’ business model into complimentary markets.

Alan joined Safeguard in 1995, learning the business from the ground up. He was promoted to Chief Operating Officer in 2002, and was named CEO in May 2010. His hands-on experience has given him unique insights as a leader to innovate, improve and strengthen Safeguard’s processes to assure that the company adheres to the highest standards of quality and customer service.

Under Alan’s leadership, Safeguard has grown significantly with strategies that have included new and expanded services, technology investments that deliver higher quality and greater efficiency to clients, and strategic acquisitions. He takes a team approach to process improvement, involving staff at all levels of the organization to address issues, brainstorm solutions, and identify new and better ways to serve clients.

In 2008, Alan was recognized by Crain’s Cleveland Business in its annual “40-Under-40” profile of young leaders. He also was named a NEO Ernst & Young Entrepreneur Of The Year® Award finalist in 2013.

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Esq., General Counsel and EVP

Linda Erkkila

Linda Erkkila is the General Counsel and Executive Vice President for Safeguard Properties, with oversight of legal, human resources, training, and compliance. Linda’s broad scope of oversight covers regulatory issues that impact Safeguard’s operations, risk mitigation, strategic planning, human resources and training initiatives, compliance, insurance, litigation and claims management, and counsel related to mergers, acquisition and joint ventures.

Linda assures that Safeguard’s strategic initiatives align with its resources, leverage opportunities across the company, and contemplate compliance mandates. She has practiced law for 25 years and her experience, both as outside and in-house counsel, covers a wide range of corporate matters, including regulatory disclosure, corporate governance compliance, risk assessment, compensation and benefits, litigation management, and mergers and acquisitions.

Linda earned her JD at Cleveland-Marshall College of Law. She holds a degree in economics from Miami University and an MBA. Linda was previously named as both a “Woman of Influence” by HousingWire and as a “Leading Lady” by MReport.

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COO

Michael Greenbaum

Michael Greenbaum is the Chief Operating Officer of Safeguard Properties, where he has played a pivotal role since joining the company in July 2010. Initially brought on as Vice President of REO, Mike’s exceptional leadership and strategic vision quickly propelled him to Vice President of Operations in 2013, and ultimately to COO in 2015. Over his 14-year tenure at Safeguard, Mike has been instrumental in driving change and fostering innovation within the Property Preservation sector, consistently delivering excellence and becoming a trusted partner to clients and investors.

A distinguished graduate of the United States Military Academy at West Point, Mike earned a degree in Quantitative Economics. Following his graduation, he served in the U.S. Army’s Ordnance Branch, where he specialized in supply chain management. Before his tenure at Safeguard, Mike honed his expertise by managing global supply chains for 13 years, leveraging his military and civilian experience to lead with precision and efficacy.

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CFO

Joe Iafigliola

Joe Iafigliola is the Chief Financial Officer for Safeguard Properties. Joe is responsible for the Control, Quality Assurance, Business Development, Marketing, Accounting, and Information Security departments. At the core of his responsibilities is the drive to ensure that Safeguard’s focus remains rooted in Customer Service = Resolution. Through his executive leadership role, he actively supports SGPNOW.com, an on-demand service geared towards real estate and property management professionals as well as individual home owners in need of inspection and property preservation services. Joe is also an integral force behind Compliance Connections, a branch of Safeguard Properties that allows code enforcement professionals to report violations at properties that can then be addressed by the Safeguard vendor network. Compliance Connections also researches and shares vacant property ordinance information with Safeguard clients.

Joe has an MBA from The Weatherhead School of Management at Case Western Reserve University, is a Certified Management Accountant (CMA), and holds a bachelor’s degree from The Ohio State University’s Honors Accounting program.

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Business Development

Carrie Tackett

Business Development Safeguard Properties