Cleveland’s Teardown Runaround

By Daniel McGraw.

A few months ago, I was riding around on my bike from my old neighborhood near the Collinwood rail yards on Cleveland’s East Side to my apartment in suburban Lakewood. I passed on taking the lovely route via Lakeshore Boulevard through Bratenahl and its stately mansions built by long-ago industrialists.  Instead, I hopped on Superior Avenue through the heart of the East Side, a few miles away but a completely different universe.

I find you see more as you move slowly through a neighborhood, whether it be kids playing enthusiastically in the streets under the watchful eye of the old folks hanging out on their porches or crack addicts scrounging for money–or any other combination of urban life. You can also check out how much broken glass is on the streets and the sidewalks, not necessarily a sure measurement of how far along the neighborhood decay factor has progressed, but certainly good anecdotal indicator. This is not a pretty part of Cleveland. Positively Cleveland does not put this on a list of where the boomerangers want to come home to. It is about eight miles or so of ghetto wasteland, three-story buildings boarded up and leaning over the sidewalks; vacant lots that haven’t been cared for in years; a few convenience stores selling the 24 oz. can of Steel Reserve High Gravity 211 for $1.49;  a few bars, but not many. Hardly anything, really. Not even check cashing places. No need.

[blocktext align=”left”]You could tear down every fifth house in Cleveland and have just about enough housing to meet the needs of the current population.[/blocktext]

I took a right turn off Superior and headed down East 86th Street. This is where my now-deceased father grew up, part of the Irish-Catholic St. Thomas Aquinas parish, a neighborhood he used to remember fondly in his old age; Irish bars and little grocery stores, old biddies that kept an eye on things, and the streetcar line that would take him to department stores downtown.

At one time, there were probably about 30 houses on the street between Superior and Kosciusko avenues (the border between Cleveland’s Irish and Polish back then). During this latest visit, about 12 or so houses were left, with four boarded up. The rest of the lots were vacant, sometime two or three in a row. A few kids were playing in the street, stopping to look at me as I rode by–I imagine wondering what a middle-aged white guy on a bicycle is doing in their neighborhood.

As one looks around on East 86th Street, it becomes apparent that the City of Cleveland must do something to counteract the drain swirl going on, and the choices aren’t easy or cheap, or in some cases, racially and sociologically acceptable. The problem for Cleveland is that it has way too many streets like this one, with half of the houses vacant, and when you add them up into a macrocosm of what is going on, you find that Cleveland has way too much housing for far too few people.

How much excess housing?  According to 2010 United States census figures, you could tear down every fifth house in Cleveland and have just about enough housing to meet the needs of the current population.

Everyone agrees that there has to be houses torn down in Cleveland. How many and how quickly is up for debate. The pie-in-the-sky-Cleveland-is-coming-back crowd thinks that the overall economic malaise in Cleveland will soon reverse itself, with more jobs being added that will cause a big influx of working people moving back to the city, and cheap rehabbed housing will be a part of the economic rebound.

But when you crunch the numbers, rehabbing most old houses doesn’t make economic sense in Cleveland right now, and probably won’t ever. Because the city would have to add 100,000 people to its population to make it work.

Vacant and distressed, or ‘on vacation’?

The population loss of Cleveland proper is well known. The city has gone from having a population of about 478,000 in 2000 to about 390,000 in 2010. But when you look past those obvious numbers, a more striking statistic jumps out. Cleveland has about 207,000 housing units according to census figures, and it counts about 167,000 as being occupied.

[blocktext align=”left”]The City of Cleveland must do something to counteract the drain swirl going on, and the choices aren’t easy or cheap.[/blocktext]

So that’s about 40,000 too many housing units (they count single family homes as well as multi-family housing units). The city contends that figure is too high, claiming that the census counters often designate a house as vacant if no one answers the door. “You will find that cities all over the country have found that the census has a problem with overstated vacancies,” said Chris Warren, chief of regional development for the city.

Warren said the city doesn’t know the exact number of vacant housing units, pointing out that a housing unit can be temporarily vacant while being sold on the market, and rental units in apartments are vacant in between tenants. All the city will say is that the vacant housing units in Cleveland is “nowhere near” the census number of 40,000 vacant housing units in the city–probably about half or less.

Warren contends that one problem with census numbers on vacancies is that if homeowners are staying at their vacation homes during the spring census counting, their Cleveland homes are counted as vacant. That’s a lot of extended vacations for a city with a median income of $27,470.

But a number the city does have that is very specific is the number of housing units it classifies as “vacant and distressed.” A survey done earlier this year found that 8,366 housing units fell into that category–housing units that do not meet city code and are slated for condemnation. Of those 8,000 or so vacant and distressed homes, the city wants to demolish 4,500 to 5,000. The rest could be slated for rehab if the right buyers come forward and public subsidies can be found to fund the rehabs.

In addition to the 8,000 or so vacant housing units in bad shape in Cleveland, there are an estimated 7,000 more in Cuyahoga County. The Cuyahoga County Land Reutilization Corp. (aka Cuyahoga Land Bank) has acquired about 2,000 in the past three and a half years, demolishing about 1,300 and selling about 700 to private parties to rehab. Cuyahoga Land Bank Director Gus Frangos said he expects to take in about 700 to 800 a year, with about 500 of those housing units being demolished. About 60 percent of those will be from Cleveland.

Cleveland hopes to demolish about 800 a year in addition to those torn down by the county land bank, according to Chris Warren. So if you add the two together, between the county land bank and the city, about 1,100 can be demolished each year. That is if the funding can be found. The land bank is funded by interest on delinquent property taxes (about $7 million a year), but the city is looking for $8 million each year to tear down its 800 projected housing units it has determined should be torn down.

The city was getting some funding from the federal government’s Neighborhood Stabilization Program (to help cities deal with the home foreclosure crisis) but that program is now dead and gone. A new federal program–the Hardest Hit Program–was devised to help save homes before they went into foreclosure, but the U.S. Treasury Department has now ruled states can use some of it for demolitions. In Ohio, that would be about $60 million, but to be divided up in a state that has an estimated 100,000 homes slated for demolition.

Cleveland would need to get $8 million of that funding just to do its 800 a year. That would mean it would take Cleveland ten years to clear out the existing “vacant and distressed” housing stock if the funding can be found. That doesn’t take into account how many more homes will become “vacant and distressed” over that ten-year period.

A $90,000 shack

According to the 2010 census, the average house in Cleveland was built in 1924. And for the houses built in that time period, most were not ornate and stylish homes for the wealthy industrialists that still inhabited the city. Travelling around Slavic Village with Cleveland Councilman Anthony Brancatelli, you can see how many of the homes built back then were for recently arrived immigrants who held jobs in the steel mills. Most were just basic dwellings for the working poor.

He points to one very small house on East 66th Street. “This is about 800 square feet, and has no basement,” Brancatelli said. “There is no market for this house right now.”

The councilman is adamant that tear-downs are an important factor in the rehab market. “No one is going to want to invest money and rehab a house if it is on a street that has a lot of boarded-up houses,” he said. “And they aren’t going to rehab a house on a street where there are 800-square-foot houses that no one wants to live in.”

But even doing rehabs on a street where there are no condemned properties doesn’t add up financially in most cases either. Frank Ford, a longtime urban planner in Cleveland now a senior policy advisor for the Thriving Communities Institute, a non-profit studying the Cleveland housing market, said, “The cost to renovate a home in Cleveland won’t work in most cases, because the money you put into it you probably can’t recover.”

In a study of 50 vacant properties in the county, the average cost of rehabbing the homes with new mechanicals and a new roof and other up-to-date materials was $90,000. In another study Ford is working on with Harvard University researchers (to be completed this year), the only chance a rehab has to be done without government subsidies is in certain select neighborhoods (Old Brooklyn, for example) and only if the house is redone up to basic code and not above that.

“That would mean you would have a 20-year-old furnace in the basement that passed code and a kitchen of old appliances,” Ford said. “With the excess housing in the market that would make little sense, because the house would have to be redone again ten years later. It wouldn’t be a good investment for the community.”

Frangos said the homes slated for rehab and sold to qualified individuals or companies have not used any tax subsidies, but the land bank also factors in what neighborhoods the homes are in when deciding whether they should be torn down or slated for the rehab market. Homes on streets with many vacant properties are more likely to be the tear down list than those on streets with mostly occupied housing, Frangos said.

In general, however, most urban planning experts place the subsidy needed on rehabs in Cleveland at around $40,000 apiece to make them work. In many cases, that is more than older occupied houses it sits next to on the street are worth. But even with the elasticity of housing prices, and the inexact science of property appraisals, it is not hard to see that Cleveland’s housing market has too much product and not enough customers and that tear downs will help put that market into a better balance.

Still, there are some who think the land bank and the city are tearing down too many homes. Cleveland Councilman Zack Reed thinks the city and the county should take the $10,000 used for demolition and offer it to buyers to help fund the purchase and/or rehab.

[blocktext align=”left”]“They look at me like I am boo-boo the fool when I raise these questions about how the East Side is treated differently for these tear downs” Reed said. [/blocktext]

“I don’t think we are going through the planning process with any flexibility,” Reed said. “Houses get put on the list and they don’t allow anyone to see if we can save it. I think we should hold [the condemned homes] longer and do everything we can to get a buyer. And maybe we should use the cost of demolition as a subsidy to restore the house.”

But Frangos said the homes are held between three and eight months before demolition takes place, and the councilman and neighborhood groups are notified of the plan to tear down the house. “We can’t hold a house for a year or two while the councilman shops it around,” Frangos said. “If the councilman can find someone who will buy the property, we will gladly do that, but it just doesn’t happen.”

Reed says he’s troubled by what he sees as more homes being torn down on the predominately black East Side than the predominately white West Side, “and from my perspective, they’re tearing them down quicker on the East Side.”

“They look at me like I am boo-boo the fool when I raise these questions about how the East Side is treated differently for these tear downs,” Reed said. “But you’ll have to ask [Gus Frangos] if racism is why that is.”

Frangos said the county land bank’s demolitions for the past three-and-half years in Cleveland have been about 55 percent on the East Side, and 45 percent on the West Side. He said the slight disparity is due to older homes on the East Side and more economic distress in those neighborhoods. As for Reed’s contention there may be racial considerations made in the decisions about whether to tear down a house or rehab it, Frangos said, “I won’t dignify a question like that with a response.”

The city has a history of racial inequality in teardowns. During the Urban Renewal (or “Negro Removal,” as writer James Baldwin called it) programs instituted in the 1960s, structures deemed “blighted” in seven Cleveland neighborhoods–all predominately black, all on the East Side–were torn down. More than 6,000 acres in all were leveled, leaving for the most part vacant lots where housing and small businesses once stood. Many residents were displaced. When you talk about widespread teardown, it’s easy to see why Reed worries about history repeating itself.

70 years of leaving

In 1941, a researcher named  L.S. Robbins submitted a report to the Cleveland Chamber of Commerce about the impending doom the city was facing because of migration out of the central city. “Cleveland and many other large American cities are faced with a serious economic adjustment,” Robbins wrote. “The basic cause of this condition is due to a loss of population accompanied by a migration of commercial and residential values. If these underlying forces continue to gather momentum, and if projected into the future, they will threaten the entire structure of the community.”

Tom Bier is a Senior Fellow with the Cleveland State University College of Urban Affairs, and has long been known and the doom-and-gloom prognosticator when it comes to his specialty, urban housing research. “You can see by that 1941 report that business leaders and politicians have known about these trends that threaten the central city for decades and have done nothing about it,” he said.

The major problem, Bier said, is that people view housing in a social icon status rather than what it really is, a product that people buy and sell. “When you buy a car, you keep it for some years, sell it to someone else, and so on down the line,” Bier said. “After about 20 years or so, it isn’t usable anymore and goes to the junk heap. Houses are the same way. The life of most homes is about 100 years, and many in Cleveland are at that point now, and we need to take care of them by getting rid of the ones that aren’t functional any more.”

How to do that is up for debate. Bier suggests that the city should target rehabs in certain neighborhoods–those that have some viability because of employment centers and/or housing stock that is worth saving–and tear down more in the depressed parts of town. “The private market will eventually determine if those vacant properties are valuable for housing or other uses when they are assembled together,” he said.

[blocktext align=”right”]CSU professor Bier suggests that the city develop a plan that tears down about twice as many new housing units that are built. [/blocktext]

Case Western Reserve University professor of economics Robin Dubin has suggested that the city devise a plan where some residents are relocated to areas of the city that are in better shape than where they live. The thought is that the high cost of city services on a street that has only two occupied homes is detrimental to the city in the long term, and the tearing down of those houses will help equalize the housing market.

Dubin was unavailable for comment on this story, but her plan presented to local urban planners a few months ago was short on specifics, and divided the plan into a ward-by-ward approach instead of the city as a whole, according to those at her presentation.

Ken Lanci, who is running for Mayor of Cleveland, agrees that it might be a good plan to look at. “If we can get those homeowners who live on a street that has abandoned homes and vacant lots and offer them an equal value home in a much nicer neighborhood, it would be good in many ways,” Lanci said. “Because right now, if we don’t address the excess housing, we will have more and more vacant homes to deal with in the future.”

“[Mayor Frank] Jackson is a caretaker on this issue; he isn’t doing anything,” Lanci continued. “But as those of us with experience in business know, if you run things as a caretaker, eventually you become an undertaker.”

Jackson’s chief of staff Ken Silliman said the current mix of tear-downs and rehabs will continue and moving people is off the table and “we completely and unilaterally will not even consider abandoning any neighborhoods. The mayor’s vision is to identify each neighborhood for their strengths and use them to strengthen the city as a whole, and address their weaknesses to make them stronger.”

Mayor Jackson was approached to discuss these issues for this story, but he deferred comments to Warren and Silliman.

Detroit has undertaken a plan to possibly down-size the city and relocate residents from distressed neighborhoods and basically shut down those areas from city services (about one-third of the city, or 45 square miles). But under the Detroit Works Project plan made public earlier this year, forced relocation is said to be “neither right nor possible.”

Instead, Detroit is opting to promote a “house-for-house-swap” plan, which would allow residents to more or less pick and choose where they would like to move to, what house they would like to move into, and when they would want to do it.

There is also the issue of politics that gets in the way of urban planning. In states like Ohio, with a Republican governor and Republican-dominated legislature, programs that keep the Republican-leaning suburbs running smoothly tend to win out over programs to fix the problems in the Democratic-leaning cities.

“Prudent urban planners have been long arguing against sprawl development because of the cost–the cost of roads and other infrastructure and the expense of delivering services to wide geographical areas without population density,” said Jim Rokakis, director of the Thriving Communities Institute.

“Republicans control public spending in Ohio, and you would think they would pay more attention to a more efficient and cheaper way to deliver services to the citizens of this state,” he continued. “And the longer you do nothing, the longer you leave these houses just standing there vacant, the more likely the problem will exacerbate and spread.”

[blocktext align=”left”]“The longer you leave these houses just standing there vacant, the more likely the problem will exacerbate and spread.”—Jim Rokakis[/blocktext]

Former Lt. Gov. Lee Fisher, a longtime Ohio Democrat and current president of CEOs for Cities, a non-profit urban policy advocacy group, also echoed that the state needs to do more in adopting urban policies that do more in updating infrastructure, assembling properties for economic development, and creating new housing stock that appeals to the younger crowd that is moving into cities more. Teardowns of are a part of that policy, Fisher said.

“I’ve represented urban and suburban and rural areas during most of my career [in the Ohio state legislature] and it is very shortsighted to view investments in urban areas not benefitting suburban and rural,” Fisher said. “But under the current political climate, it is very hard to get legislators to see beyond their own district.”

So at this point, it is unlikely that the City of Cleveland’s housing market will be changing drastically any time soon to address the market inequalities. CSU professor Bier suggests that the city develop a plan that tears down about twice as many new housing units that are built. “A large part of the market moving into the city–both the people in their 20s and 30s and the empty nester baby boomers–don’t want an older home that has to be rehabbed, and may be so old-fashioned in its design that it won’t work for them no matter how they try to modernize it,” he said.

As for the private real estate developers, they are waiting and watching, which is what they always do. “On the one hand,” said Peter Rubin, president of The Coral Company, “the laws of supply and demand are going to have an effect. But housing is so much divided into niche markets that depend on price points and location and single family or multi-family. Some will be affected by excess housing in the Cleveland market, others not so much.”

“But generally, you cannot do rehabs in Cleveland without subsidies,” said Rubin, whose company has done big projects in Shaker Square and University Circle. “And having the excess housing makes it harder to put new housing products in the pipeline. So there have to be subsidies and tax breaks for those as well.”

And politically speaking, being the neighborhood councilman who is known for tearing down things rather than building them up is not often the best career move. “In some ways, we have permitted some council reps to have their own agenda on these planning issues, and in doing so, there is not enough emphasis on seeing the big picture when it comes to housing economic issues,” said Cleveland Councilman Brian Cummins.

For Slavic Village’s Brancatelli, the entire region needs to realize that Cleveland’s housing issues affect them. “This isn’t Detroit, but if the core of the city is unhealthy, it drags the rest of Northeast Ohio down with it,” he said. “The folks in the suburbs have to be aware that we need help to take care of the mess that was caused by the foreclosure problems and by the industrial economic changes. And that means we need financial help to do the things to make the city strong again.”

“Right now, we have to kill off a large number of our housing units that aren’t part of the future,” Brancatelli said. “And killing them off now is cheaper and healthier for the city and the region than waiting and doing it ten years from now.”

Daniel McGraw is a Cleveland journalist and author.