City 'affordable housing' fund destroys more houses than it builds

A cluster of vacant rowhouses in the 1600 block of North Gay Street succumbed to the metal claw of an excavator this month, as yet another batch of unwanted city homes turned to rubble.

Once the East Baltimore tract is cleared, nothing will be built there. It will be turned into a community-managed open space, providing a patch of green for residents of nearby senior housing units and tenants at the restored American Brewery building.

The $215,000 demolition is among the most recent projects funded by the city's Affordable Housing Program. The $60 million program was created six years ago, after then-Mayor Martin O'Malley dangled it as a carrot in his successful effort to persuade a skeptical City Council to support a new Hilton convention center hotel downtown.

But while the city-owned 757-room hotel opened in 2008 to fanfare, the housing fund has largely faded from public view. Some current council members weren't even aware of it until The Baltimore Sun inquired.

The Affordable Housing Program has spent three-fifths of its original budget so far. And despite the program's seemingly straightforward name, the bulk of that $36 million has gone toward tearing houses down, not putting them up.

"It was really a blight elimination program," Housing Commissioner Paul T. Graziano said. "There was some confusion about the money being used for development of new housing. In fact, that was not the primary purpose of the money."

Still, Graziano says razing eyesores does support affordable housing. Demolition yields "an immediate benefit for the communities" by improving a neighborhood's appearance. It improves public safety because vacant houses attract crime. And eliminating blight carries "the added benefit that it creates sites available for future investments," he said.

While Graziano and other housing officials point to an array of new development aided by the program, Councilwoman Mary Pat Clarke is upset the city hasn't moved faster on a $3.3 million project in her Northeast Baltimore district — even though four years ago Graziano went to the Tivoly Avenue site to publicize the program.

To Clarke's frustration, funding was cut from the city budget last year, then put back in this year. "This neighborhood is not a priority, except with the people who live here," she said. "It is not a city development priority. We're going to make it one, if it's the last thing we accomplish."

Graziano understands Clarke's impatience but says there are reasons that other, larger-scale projects on the list have progressed more quickly. "It's a very tough block," he said.

The program has cleared the way for development in several parts of the city, the housing agency says. Residential housing has been built at Orchard Ridge, on the city's eastern edge, where the Claremont Homes public housing complex stood. Last month 80 new and rehabilitated homes were finished in Barclay. In Johnston Square, renovations have started on East Preston Street, with construction of a 74-unit apartment building set to begin early next year.

The biggest beneficiary has been a project to overhaul the site of Uplands, a failed low-income housing complex in Southwest Baltimore. More than $15 million has been funneled into land acquisition and demolition for its revival, and 104 units of affordable rental housing are being built. Plans call for more than 700 units of mixed-income rental and owner-occupied housing.

"I'm elated to see vertical development going on on the site," said Councilwoman Helen L. Holton, whose district includes the sprawling parcel.

Holton was one of several council members who backed the Hilton hotel deal after the Affordable Housing Program was put on the table, along with sweeteners like a new gymnasium at the Edgewood Recreation Center, also in her district. (She says her eventual support for the hotel was not related to those inducements.)

The community group BUILD, which aggressively pushed for the fund's creation in 2005, agrees with Graziano's emphasis on demolition, given that nothing new can be erected in a spot until blight is addressed, said Rob English, the group's lead organizer.

He noted that the fund supported a project in the East Baltimore neighborhood of Oliver that BUILD did with the Reinvestment Fund, a Philadelphia-based developer. "From that work we've constructed 40 brand-new homes and a mix of rehab in Oliver," he said. "It's a start."

English was surprised, though, to hear that $24 million still hasn't been spent. According to data from the city, $7.7 million of that is out of the budget entirely — a casualty of the city's budget crunch.

English said he expects the city to fulfill its original commitment, saying, "We look forward to seeing how that money is invested to rebuild blighted neighborhoods."

The city faces an enormous challenge to deal with blight. A new report from the U.S. Government Accountability Office quotes Baltimore officials as saying it would take $180 million to demolish all of the abandoned, unsafe buildings that scar the city.

Holton sees the Affordable Housing Program as a small if important piece of a massive puzzle. "We could quadruple that amount and that would just be a really good start given the size of the problem we have to address," she said.

The law that created the Affordable Housing Program specified that the money could be spent on certain purposes, including acquisition and demolition and the relocation of residents from homes slated for demolition. It also allowed Graziano to give developers financial incentives to preserve or create affordable housing. Certain households could receive rental or home-buying assistance.

The money comes from several pots: federal Community Development Block Grants, city bonds and income from the city's decades-old investment in the Hyatt Regency Baltimore on Light Street.

"The truth is the city did appropriate significantly more money than was previously there for this effort," Graziano said.

He said his agency has tried to be strategic. Some money is held in reserve, waiting for a project to reach the next phase. Though the housing slump has hurt developers' ability to finance construction, he said clearing parcels now makes sense so that sites will be ready when the market improves.

For accountability, the city law requires the housing commissioner to give the mayor and City Council an annual progress report on the program. Graziano says he has never done so but has kept elected officials informed through the larger capital planning process.

After The Sun inquired about the lack of reports, Graziano sent a four-page summary earlier this month to Mayor Stephanie Rawlings-Blake and the City Council. It hails "exciting progress" on a number of projects supported by program funds.

But there's barely any mention of the project in Clarke's district. It's a blighted handful of blocks known as the Tivoly Triangle in the Coldstream-Homestead-Montebello neighborhood.

Four years ago Graziano visited Tivoly Avenue when the city demolished around a dozen houses. At the time he said the $3.3 million redevelopment in the neighborhood would "eliminate vast pockets of blight and allow people to live in a decent place."

Since then the city has acquired 28 more properties and is working to acquire others that will eventually be razed. But no further demolition has occurred. Clarke says, if anything, the city has worsened the short-term blight because houses now sit boarded up.

Graziano denies that the slow pace has held back redevelopment. "There's absolutely zero market right now" to pursue new housing there, he said. The city should continue with acquisition and demolition, he said, then "go back and reassess where the market is when we finish."

But Mark Washington, executive director of the Coldstream-Homestead-Montebello Community Corp., disagrees with that logic: "One of the responsibilities of government is to help facilitate the creation of a viable market."

"I respect the commissioner a great deal," Washington said. "He has not let this project completely fall off the radar. But I don't think it is his top priority."


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