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.
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.
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 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.”