Friday, October 8, 2010

Cincinnati must learn to compete for Preservation Investment

"Cincinnati must learn to compete for Preservation Investment". What does that mean you ask? Well it means in a competitive marketplace of people who restore and love old houses , we need to try to attract those people to our city rather than somewhere else.

Why? Well it makes economic sense. A vacant property sitting with a VBML valued at 10,000 might generate a couple of hundred dollars a year in tax revenue. On the other hand restore that house and you may have raised its value to 150-250K and the tax revenue it generates for the city and county is much higher. You have eliminated "blight", you are repopulated the neighborhood. That means typically a lowering  of crime and in the process of that restoration you have created and maintained countless jobs, Plumbers, electricians , painter, you have kept local building material suppliers in business. The family that lives there shops at the local grocery, they buy things and they pay income taxes.

Other cities, cities understand Historic preservation as an economic development tool and use their architectural resources as a way to generate jobs, increase their tax base and grow their neighborhoods.

Cincinnati on the other hand throws up R&R (Roadblocks and redtape) . They consider they are the 'smartest people in the room' and they have decided that no one will invest in Urban neighborhoods like Fairmount , Price Hill,  West End and other areas.  Those are city "cash cows, where the city can get lots of federal monies for "blight abatement' and  be able to use some of that money to pay salaries and keep their friends the demo contractors in business. They want to keep the VBML because it is a 'revenue stream'.

Ponder this? In the last 14 years that the VBML has been in existence here, cities like Indianapolis and Louisville have turned around a vast majority of their Urban neighborhoods, they have increased their tax base and their Urban neighborhoods population. Cincinnati now has over 2500 properties on the VBML/Condemn list. These properties are doomed for demolition because no one will buy them to restore. Aside from the red tape with the city, and the high cost of liability insurance , if you can even get it, banks will not loan on these properties because of the VBML or condemn status.

Cincinnati is the only city I know where "Condemn" is the result of escalation of a VBML which is usually a escalation of a repair order. NOT a structural condition. There are houses on the list that have no structural problem , but are there because they are in, a foreclosure process and a repair order gets escalated to VBML, then Condemn. Appraisers for lenders, look at condemned structures as reducing the market value of a community. This means that many existing home owners cannot get loans and cannot get insurance, because the city action results in "governmental redlining' of neighborhoods. The goal of most cities is to have as few 'condemned' structures as possible to keep property values up. We seem to want to have more so we can get more federal dollars for demo.

In fact other cities are competing for restoration and preservation minded people.Look at Baltimore for example, a similar city, similar architecture, similar problems but a totally different approach:

The city offers renovation/rehab loans, Lead abatement loan programs, Below rate market rehab loans, deferred loan programs for low income home owners, small grant loans for repairs, SCOPE/Project 500o Project (Selling City Owned Properties Efficiently) puts vacant and underutilized properties on the market and into the hands of responsible Buyers, and a Senior roof grant program that provide roofs to seniors so they can stay in their homes.

Their approach is multi level, Loans and Grants to bring new people in, resources and a number of programs to retain lower to moderate income home owners and seniors and provide them with tools to maintain their homes. It is an approach that 'fosters' neighborhood development as opposed to the City of Cincinnati's approach which is to put it on a list for eventual demo and in the meantime drag down everyone property value and if you do want to come here you have to pay fees and bonds and jump through this hoop and that.

We need a new approach and new ideas, what we have been doing IS NOT WORKING!


St Charles said...

We need to call the Construction unions and let them know what is killing jobs in Cincinnati. Maybe the union lawyers can do something to break the stranglehold of the VBML

St Charles said...

You need to add State tax Credits to the list that stack on top of Federal Historic Tax Credits This is the most effective tool to get historic neighborhoods restored