Can Baltimore bring back the 'dollar houses' of the 1970s?

In the 1970s homesteaders who gave a chunk of the lives to make Otterbein a reality.

For decades Baltimore’s urban landscape has been blighted by thousands of vacant, boarded up houses, many of them concentrated in some of the city’s poorest neighborhoods. Former Mayor Stephanie Rawlings-Blake tried to address the problem with her “Vacants to Value” program, which funded the demolition of many crumbling structures while giving developers and urban pioneers incentives to rehabilitate others, and Gov. Larry Hogan bolstered the effort with his Project CORE. But those programs have only produced partial success, not least because the net increase in newly renovated houses was never fast enough to keep pace with the growing glut of vacant and abandoned ones.

That’s why Councilwoman Mary Pat Clarke’s recent suggestion that Baltimore revive the “dollar houses” program of the 1970s — a city-sponsored affordable housing initiative that offered incentives for urban pioneers to reclaim substantial swaths of the city — is so attractive to those who remember its earlier success. The dollar house program was largely responsible for the urban revival that occurred in parts of downtown Baltimore City during those years. The City Council is slated to consider the matter this week, and members should by all means explore whether such a program would be feasible today. But they should be aware that some significant conditions have changed since former Mayor William Donald Schaefer and his housing commissioner, Robert C. Embry, engineered the concept decades ago.


At its core, the idea behind the dollar house initiative was relatively simple. At the time, the city owned a large number of mostly vacant, boarded up dwellings that had been slated for demolition to make way for a proposed new highway on the west side of downtown. But the road project never materialized, leaving the city stuck with scores of uninhabitable houses that were a money pit in terms of maintenance costs and lost property tax revenues. Mr. Embry came up with the idea of offering those properties to the public for a dollar if the new owners would promise to fix them up and live in them for a specified period.

Yet it wasn’t enough just to sell the houses; the city also had to make sure the new owners were financially able to rehab the properties they bought, and to do that it came up with an ingenious financing scheme. Basically it worked like this: the city would borrow money by issuing non-taxable bonds at 3 percent interest, then lend the money it raised to the urban homesteaders at 4 percent so they could fix up their properties. To protect the city against people defaulting on their loans, the city required them to show they had sufficient income to repay the debt and hold up their end of the bargain, just as they would have to do with a new house or car. For prospective homeowners it was an attractive deal because it didn’t require a substantial down payment, and it enabled them to buy more house than they might otherwise have been able to afford.


And the city didn’t stop there. Since most of the people who participated in the program had no idea how to renovate a house, the city set up a special office downtown to match prospective homebuyers with contractors, architects and other building trades professionals who could carry out actual the work for the new owners. Meanwhile the city supported residents’ sweat equity by planting trees, landscaping streets and preserving historic features such as brick sidewalks and other amenities.

No one seems to know exactly why the program was discontinued in the mid-1970s, after Mr. Embry left the city to serve as Assistant Secretary of the Department of Housing and Urban Development in the Carter administration. Today he says he’s not sure whether the program could be revived because the tax laws that allowed the earlier initiative to thrive have changed considerably in the decades since. Also, the communities that were revived through the program were relatively compact geographically and the newcomers comprised a critical mass of residents focused on creating a distinct neighborhood identity. It’s not clear that today’s conditions, in which the thousands of city-owned vacants are scattered and typically interspersed with occupied properties, offer fertile ground for a similar initiative.

The dollar-house program has become a part of Baltimore’s mythology of the can-do Schaefer era, and that spirit, as much as the specifics of the initiative itself, is worth reviving. Put aside all the details about financing and logistics, and it is a story of individuals working to rebuild their city brick by brick. It may not be possible to achieve the same success in the same way, but the council should try to find a way to give city residents the same sense of ownership and empowerment that the dollar-house program did 40 years ago.