On one side of a Park Heights street, a $43 million plan to overhaul an elementary-middle school was well on its way. On the other side stood nine vacant houses, some little more than partially collapsed shells.
Baltimore housing officials had been trying to find a developer to fix up the two-story rowhouses for years, with no success. So, they decided to try something the city never had done. Officials secured $775,000 in public money and began to renovate the empty houses in the 4800 block of Pimlico Road themselves.
“Time was running out,” said Wendi Redfern-Curtis, who oversaw the project as a deputy housing commissioner. “We really didn’t want those vacants across from the school.”
Crews from Baltimore’s public housing agency finished work in the summer on the city-owned houses in Central Park Heights. Now, the city is offering them for sale at $110,000 each, a steep discount designed to entice buyers.
As the city struggles to make a dent in Baltimore’s 16,000 vacant buildings, officials say the DIY plan shows the lengths they’re willing to go to if it means they can fix up a whole block at a time. But the experience so far underscores how hard it is to turn around even a single block in a struggling neighborhood. Challenges include crime — a woman was found shot dead on the block in June — the borrowing ability of potential buyers, and a mix of occupied houses and vacant buildings in various states of ownership.
Despite the infusion of money, when the renovated Pimlico Elementary-Middle School opened this fall, none of the rehabbed houses had been sold and five others remained vacant.
The houses had been trapped by an economic reality that results in investors shunning many of the city’s vacant buildings: It costs more to renovate them than what they can sell for, even with subsidies. That math also helps perpetuate a lack of affordable housing that forces many low-income renters and homeowners in Baltimore to live in substandard conditions.
Alan Mallach, a fellow at the Center for Community Progress in Washington, said some cities have tried to rehab vacant houses themselves or work in close partnership with a nonprofit organization doing the rehab. Mallach used the DIY approach to develop housing for homeless people when he ran the Trenton, N.J., housing department, although he hired private contractors. A public land bank in Detroit has a program similar to what Baltimore is trying called “Rehabbed and Ready.”
Mallach said Baltimore could apply the DIY approach to a handful of blocks a year. But he cautioned there’s no guarantee the Pimlico Road project will kick-start a rejuvenation of the neighborhood.
“It’s not like it’s a science, [where] you do X and you get Y,” he said.
Redfern-Curtis, who the left the department in August for the private sector, said the experiment was necessary — although not something the city will necessarily try again — because there is next to no incentive for private developers to look at many parts of the city.
“This was a matter of last resort here,” Redfern-Curtis said. “The numbers don’t work, quite frankly. So, there’s no reason somebody other than some benevolent person would go and do the rehab.”
Redfern-Curtis’ team secured funds for the project in the city’s 2017 capital budget. The houses, built in 1925, cost about $150,000 each to rehabilitate.
The city also paid to rebuild the shells of houses a private developer agreed to work on, which would reduce some of his costs by turning over buildings with new roofs, stairs and floor trusses.
And it helped pay for cosmetic improvements to occupied houses on the block. The occupied houses on the block are valued at $15,000 by tax authorities.
Retired security guard Melvin Lemon’s house is between two of the renovated homes.
“We complained about those houses for a long time,” Lemon said. “Neither one of them had a roof and when it rained or snowed, it slowly seeped to my basement.”
The city designated one vacant house on the block as abandoned in May, in the midst of the rehab project. Others are in the middle of the lengthy legal proceedings needed to turn them over to new owners.
Ernst Valery, the developer who agreed to buy and fix up some of the vacant structures improved by the city, said he has struggled to find a buyer for the one he’s finished because the one next door remains empty.
Redfern-Curtis said the project’s costs are justified. Because the houses are sandwiched between others that are still occupied, it would cost about $25,000 to demolish the vacants and about the same amount to prop them up so they don’t collapse. The rehabilitation project will cost slightly more per house, but Redfern-Curtis said it also will result in a family getting a new home.
“We get more than one good outcome here,” she said.
With an extra $10,000 subsidy under the city’s Vacants to Value program for the purchase of a formerly vacant house, Redfern-Curtis estimated that someone who buys one of the houses could have a mortgage payment as low as $750 a month. That’s less than the rent for a two-bedroom apartment at the privately owned Palmer Court apartments behind the houses.
In the weeks since the rehab work was finished, the housing department has been looking for homeowners. A spokeswoman said one potential buyer is in the process of having finances reviewed.
The job of marketing the two-bedroom houses falls to Teresa Stephens and her team. When she stepped inside after the rehab work was complete, she saw black, stone countertops, floors finished to look like pale hardwood and walls painted light gray. Outside, mansard roofs were painted cheerful colors and the sidewalk was newly poured.
Stephens, the marketing manager for Baltimore’s housing department, conjured the homes’ future.
“The affordability, the access to a great school, the thought of a new family starting fresh,” she said. “Is that corny? I’m sounding corny.”
Mayor Catherine Pugh’s administration is pursuing several options to develop more affordable housing in the city and battle decay in impoverished neighborhoods. Her team is launching a $55 million Neighborhood Investment Impact Fund to put money into distressed areas and has agreed to raise taxes on property sales to put $20 million a year into a new Affordable Housing Trust Fund.
Pugh mentioned the Pimlico Road project when she held a news conference last month to tout a deal between her team, the City Council and activists to put money in the trust fund. She said the city must convince communities it’s there to help.
“There’s folks who've lived in these neighborhoods for 40, 50 years and, you know, they've given up hope,” Pugh said.
Valery, the developer, said he was drawn to working on the block in part because it offered a chance to sell people quality homes at a price they could afford. He described typical affordable housing deals involving complicated tax deals, in which millions of dollars in fees and profits are made by big firms. By directly subsidizing one house, Valery said, the city is investing in its residents.
“It’s an opportunity to make all these folks homeowners at half the price,” he said.
This week, Valery said he had an interested buyer — a parent with a child who would attend the school across the street. He said Healthy Neighborhoods, an organization that promotes home ownership and administers loans, is reviewing the buyer’s mortgage application but has had questions about the credit score.
The president of Healthy Neighborhoods did not respond to a request for comment.
Valery said its decision should be easy because the interested buyer is just the kind of person the organization purports to help.
Lemon, who moved to the block almost 25 years ago, is hopeful one will sell soon.