An idea we’ve been mulling over, and apparently there are plenty of people out there who think it’s a great idea, so we’re not sure why it hasn’t been implemented…other than the fact that it makes sense, and things that make sense don’t go far in our fair city these days.
Bring back the dollar house program, and get rid of the city’s SCOPE program.
Two neighborhoods in South and West Baltimore were rehabilitated through the city’s Dollar House program: Barre Circle and Otterbein. These neighborhoods have prospered and the homes have increased exponentially in value. Originally, both neighborhoods were built for and occupied by a mix of prosperous business leaders and blue-collar workers, giving way to blighted slum conditions after WWII. Slated to be demolished in the 1970s with the expansion of Interstate 95, residents and city officials came together to save these two historic communities, under an urban homesteading plan commonly known as “the dollar house program”. The long and short of it – residents were able to purchase the homes for one dollar, provided that they live in the homes and make them liveable. Today, both neighborhoods contain a mix of rental housing and owner-occupied homes — some of the owner-occupied homes are lived in by original dollar-house purchasers and people who lived in the communities before they were slated for demolition. Their ties to the two neighborhoods are strong, and both neighborhoods have active community associations.
We feel that the most important aspect of the dollar house program was the residency requirement. These homes were purchased by the people who would live in them, not by people who would rehab and sell them. Residents make strong neighborhoods, an overload of investors does not. Which brings us to Project SCOPE.
Project SCOPE was designed to encourage investment in marginal communities by selling off vacant blighted properties, through real estate brokers. Its downfall, in our opinion, came when the overwhelming majority of the homes were purchased by “investors” — as many as 85% of the homes, in fact. Whatever money the city gained through the initial purchase of these homes, it will be losing in tax dollars when many of them are sent to foreclosure. With the average Baltimore City annual tax bill of approximately $4000, the potential loss is great. Also, it would seem that the majority of the homes (28) were purchased in one neighborhood (Reservoir Hill), and only one to eight homes each were purchased in other neighborhoods.
On the surface, taking away the residency requirement and opening the purchasing opportunities to investors doesn’t seem to have helped Reservoir Hill, where property values have declined almost 11% since the program’s inception. Granted, their overall property values are higher than a lot of neighborhoods in Baltimore, but we also suspect that has to do with the fact that they are sometimes lumped in with Bolton Hill — a neighborhood that has done a fantastic job of revitalizing its housing stock, with a good mix of renters and homeowners, and its proximity to MICA, public transportation, and downtown.
The bottom line is — programs that open doors to homeownership are the programs Baltimore City should be implementing and pushing hard. Programs that encourage homeownership will revitalize this city much faster and more sustainably than programs that are geared towards investors and realtors. Looking at the housing statistics (length of ownership and home values) of the two Dollar House communities goes a long way to prove this.