Vacant houses cost Atlanta millions a year, solutions not easy or cheap: Ga. Tech report

By David Pendered

Blighted and vacant properties in the city of Atlanta come at a great cost in terms of services such as police and fire, lost property taxes, and the way they pull down values of neighboring properties, according to a new report by a Georgia Tech professor.

Vacant housing

Vacant houses, such as this one pictured in 2013 near Washington Park, cost Atlanta millions a year in services, lost property taxes, and depreciation of surrounding houses. File/Credit: David Pendered

Dan Immergluck specializes in research on real estate markets and related public policy. Working on a contract with Atlanta, Immergluck sought to put a price on what the report describes as, “distressed vacant properties and the blight that accompanies them….”

The results are stunning. The policy implications present a dilemma.

The estimated direct cost of providing services to these properties ranges from a “more conservative” $2.6 million a year to a “less conservative” $5.7 million a year.

These services include code enforcement, police and fire dispatch costs, and the Department of Corrections’ Clean and Close Project. The later involves inmates of the city jail who clean a vacant property and board its doors and windows.

In addition to the cost of services, the one-time property value loss imposed on properties within 500 feet of a distressed or vacant property ranges from a “best reasonable” estimate of $153.2 million to a “very conservative” estimate of $55.4 million.

The report emphasizes that these estimates are conservative.

The estimates don’t reflect all known costs. Some information was unavailable because no one tracks it.

For example, data on court system costs were not available. The Fulton County Tax Commissioner was not able to provide adequate data for measuring the effects of unpaid property taxes. Estimates of spillover costs on multifamily rental and commercial properties couldn’t be done because there aren’t any reliable studies of these sorts of properties, according to the report.

Burned structure

Vacant properties like this burned structure in the English Avenue neighborhood, pictured in 2014, drag down property values of neighboring houses by as much as $153 million, a new report shows. File/Credit: Donita Pendered

However, when the data is present, Immergluck’s research slices it to the core.

A section on the spillover effects on houses located within 500 feet states:

  • “On a per‐property basis, this estimate means that each of the 2,411 distressed vacant properties reduces the aggregate value of homes within 500 feet by a total of $63,000.”

Another section observes the costs of providing police services. It presumes one officer is dispatched on a call. One estimate is based on the direct cost to dispatch an officer whose salary and fringe benefits are $27.21 an hour. A second estimate adds in the fully loaded costs, to include the cost of the Atlanta Police Department’s administration, contracted services, supplies, and other costs.

  • The mid range estimate of 15,204 dispatches to vacant properties had direct staff costs of $413,701 and a fully loaded cost of $706,601.

The policy implications address one method of handling vacant buildings – demotion.

Immergluck, service costs

A new report on Atlanta’s vacant houses shows these costs incurred by city taxpayers to service the structures. Credit: “Cost of Vacant and Blighted Properties in Atlanta”

Immergluck pointed out that tearing down structures that are distressed hasn’t been a panacea in some other cities:

  • “The City of Philadelphia, in particular, after engaging in major demolition campaigns in earlier years, has found that large numbers of poorly maintained vacant lots create their own sets of problems for communities.”

However, cities that have stepped up with money to maintain the vacant lots have seen benefits, according to the report:

  • “Recent research on greening programs aimed at greening and maintaining these lots show large positive impacts on neighboring property values…. These effects are due both to the elimination of the negative impacts on the neighborhood of a neglected vacant lot, but also due to the positive amenities provided by well‐maintained greenspace.”

This section of the report ends with Immergluck’s suggestion to Atlanta officials:

  • “Therefore, if the City of Atlanta increases its efforts towards demolishing distressed, vacant homes, especially those posing the greatest negative impacts on local communities, it should plan for greening and maintenance activities and costs going forward. Otherwise the investment in demolition may not result in a substantial rate of return in terms of increased property values and tax revenues.”
Dan Immergluck

Dan Immergluck

Immergluck, distressed houses

Atlanta’s distressed houses are concentrated west of Midtown and south of Downtown. Credit: “Cost of Vacant and Blighted Properties in Atlanta”

 

David Pendered, Managing Editor, is an Atlanta journalist with more than 30 years experience reporting on the region’s urban affairs, from Atlanta City Hall to the state Capitol. Since 2008, he has written for print and digital publications, and advised on media and governmental affairs. Previously, he spent more than 26 years with The Atlanta Journal-Constitution and won awards for his coverage of schools and urban development. David graduated from North Carolina State University and was a Western Knight Center Fellow. David was born in Pennsylvania, grew up in North Carolina and is married to a fifth-generation Atlantan.

9 replies
  1. junehodges says:

    As a native greybeard who still has the (well kept) family home in the metro area that is directly affected (negatively) by the economic  phenomena detailed by Mr Immergluck, I can certainly attest  to the cost, both personal as well as city wide. I jokingly told a friend recently that nothing says ‘welcome to the neighborhood’ like sheets of plywood nailed over windows and doorways. And sadly, it’s often downhill from there. Once a roof begins leaking and there is interior damage, total abandonment is often not far behind.  Too often, out of town ‘investors’ (never having laid eyes on their property) suck what they can from rentals, putting a bare minimum into repairs and upkeep.  When the house finally succumbs to the ravages of uncaring tenants and the elements…..it’s time to move on to other revenue sources for these ‘landlords’.  I have seen it happen again and again.
    Sad.Report

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  2. Christina Cummings says:

    The communities where these properties are need economic development and investment strategies that offer jobs to residents and incentives to small businesses. These communities have been historically cut off from jobs and resources. Before we go bull dozing communities, have a plan about helping residents stay and investing in their current infrastructure and economies. I’m not a fan of blighted communities, but seriously think about a plan for the people affected by this. They are only starting to pay attention to these areas now because of the belt line project. And large development firms see big pay days ahead.Report

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  3. Joe Seconder says:

    Look at my hometown, Detroit for plenty of examples. Hate to be so blunt, but if there’s a whole street with only a couple of people living on it, and the rest of the homes are abandoned, then pay to move those folks off that street. Tear down all of the remaining homes. Turn off the water, sewer and utilities. Rip up the road and let the whole place revert back to nature. Plant urban farms for the nearby residents to become self-sufficient in obtaining locally sourced fresh produce, chickens, etc.Report

    Reply
  4. junehodges says:

    “Historically” speaking , many of these communities were once thriving middle class areas…..I know because I grew up in one.  Home owners took pride in their properties and would be loathe to allow their home to become a neighborhood eyesore.  After graduating from the area high school (long since bulldozed)  many of us headed off to college, military service , or both. (my case) The community’s business section was thriving….now it’s just a pale shadow of its former self…..I believe a large liquor store may probably be the most prosperous business there today. I remember shoe stores, laundries, pharmacies, fabric shops, several grocery stores, print shops, movie theaters and professional offices….all .long shuttered. This area is some miles south of the ‘Beltline”.  Granted, there are still many of us who work diligently to maintain our properties (and help to prop up the local tax base), but sadly, a lot of the properties are owned by companies and individuals who now live elsewhere, and couldn’t give a plug nickel as long as the rent check comes in the mail each month.  I believe (responsible) home ownership  is the key….and.if that can be accomplished house by house, brighter days may lie ahead.  There has been some new business development here in the last decade, which is promising, and public transport (both rail and bus) has been present here for decades which allows residents to access jobs in other parts of the metro area….if they are inclined to do so.Report

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  5. Andrew Burney says:

    It takes one house at a time. I have rehabed 4 properties in the Bluff area of west downtown Atlanta without any government incentive or aid. I believe in the neighborhood and I live in it, and would purchase and rehab more but my personal funds have dried up. I don’t know of any program that is geared towards helping small investors such as myself improve troubled communiies. There are many other investors that would love to do the same but find themselves in the same situation as not having the finances or support to help build up their own street and neighborhood. If there is a program i would dearly like to know what it is. I do NOt believe it is that difficult to fix. What is a problem is the city allowing certain investors to accumulate and hold a large number of derelict/unlivable properties until the golden payday comes along. The properties do not get maintained, repaired, and even basic maintenance such as keeping the grass cut goes undone.Report

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  6. Susan Wynn says:

    Yes. Yes. And yes. The ONLY reason that the City of Atlanta is addressing this as an issue is because of the belt line and the audience that it has attracted. There are no discernible plans for a financial infrastructure for the southwest belt line neighborhoods, especially in comparison to the east side beltline and the “new” west areas.Report

    Reply
  7. Vicki Mack says:

    We need so much help in Oakland City. We had an estimated 407 abandoned and/or vacant homes and lots in 2014. That number has not changed much since then and that is unacceptable. We hope the city will use a combination of solutions including greening programs, lot next door, and receivership programs to eliminate the blight.Report

    Reply

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