News & INSIGHTS

An influential coalition of Baltimore’s religious leaders has an idea for a new, quasi-governmental agency that would focus solely on vacant housing and oversee billions of dollars in public money — and Mayor Brandon Scott supports the concept.

Scott spoke at a Thursday morning news conference organized by Baltimoreans United In Leadership Development. More than 100 people crowded along a block of vacant rowhomes on West Saratoga Street for the event, where BUILD announced that the organization and Scott’s administration have agreed on three key points following months of dialogue:

• It will take more than $7.5 billion of public and private money to solve the city’s vacant home crisis;

• the city will need to create “special purpose entity” to specifically address this crisis;

• the city and BUILD will work in partnership on this crisis.

“I am committed to working with BUILD,” Scott told the crowd. “We will figure out the best way for this special purpose entity to exist so that we can invest this money into our neighborhoods for Baltimore and for Baltimoreans, to solve this issue once and for all.”

Baltimore has tens of thousands of vacant homes and lots. A report last year said the vacant housing crisis costs taxpayers more than $200 million annually in direct spending and lost tax revenue. They are magnets for crime and Baltimore’s vacant homes catch fire at twice the national average.

The Rev. Brent Brown said he’s seen firsthand how the vacants on Saratoga Street have drawn drug dealers and violence to the neighborhood. Thursday’s news conference took place across the street from his church — the Greater Harvest Baptist Church. A large tree grew through the roof of one rowhouse nearby.

The Rev. Brent Brown, pastor of Greater Harvest Baptist Church in West Baltimore, speaks at a news conference attended by Mayor Brandon Scott and local clergy for Build One Baltimore. They were highlighting the issue of vacant houses in Baltimore. The BUILD organization announced a plan to raise $2.5 billion for the renovation of vacant homes in the city. February 16, 2023 (Barbara Haddock Taylor/Baltimore Sun)

“I’ve had the awesome privilege to serve as senior shepherd here for almost six years now,” Brown said. “Yet the sad reality is that these houses behind me have stood vacant for almost that same amount of time.”

In some neighborhoods, as many as a quarter or third of homes sit vacant. The traditional housing market in these areas is practically nonexistent, often leaving only investors interested in rental income or speculators betting on a future rise in property values. This creates a downward cycle of disinvestment.

BUILD has been renovating vacant homes in a few East Baltimore neighborhoods for more than a decade now through its development arm, ReBUILD Metro. The organization claims that the vacancy rate and the homicide rate in those areas have plummeted as population and median home prices have risen — all while avoiding displacement in predominantly Black neighborhoods. For legacy Black homeowners, that means less violence and more wealth.

Now BUILD wants to take this model citywide.

Their plan, outlined in a 113-page report, is to restart Baltimore’s housing market block by block, similar to restarting a car with a dead battery. For the engine to turn over and the alternator to start generating electricity on its own, someone needs to hook up the battery to a power source and give it some juice first.

In this case, the juice is money. A lot of money.

The BUILD report estimates that it will take $2.5 billion in public money to jump-start Baltimore’s housing market. Much of that money will go toward covering the so-called appraisal gap. The appraisal gap occurs when the renovation of a vacant home costs more than the home is worth on the open market, so there’s no financial incentive to repair that home.

If Baltimore can bridge that appraisal gap, BUILD estimates that the $2.5 billion public investment will attract about $5 billion from the private sector. Under BUILD’s plan, that $2.5 billion in public money would come from selling bonds.

Cities, counties and states regularly sell bonds to finance major construction projects, such as schools and infrastructure. Those bonds are repaid over time, similar to a bank loan. A $2.5 billion bond issue to finance vacant home renovations would be unprecedented for Baltimore, which has annual revenues of roughly $3 billion.

BUILD’s proposal is for the city and state to create some kind of quasi-governmental agency — much like the Maryland Stadium Authority that financed and owns Oriole Park at Camden Yards and M&T Bank Stadium — that could issue its own bonds.

“We need a special purpose entity. An entity that can raise the capital, appealing to investors on the bond markets and engaging the state to make this happen,” said the Rev. Andrew Connors of Brown Memorial Park Avenue Presbyterian Church. “This entity would structure this strategic investment — $200 million a year for 12 to 15 years — in a way that is community-led, locally accountable and does not displace neighbors.”

The organization didn’t explain how any bonds would be paid off, though Connors noted that newly renovated homes and revitalized neighborhoods would generate more property taxes in the future.

“This is an investment that would have enormous returns for the city,” he said.

Few other details about the special purpose entity were discussed at Thursday’s news conference, but some of its responsibilities would overlap with an existing city agency: the Department of Housing and Community Development.

No one from the agency attended the news conference, though Scott did praise the agency and the work of Housing Commissioner Alice Kennedy. Housing spokeswoman Tammy Hawley said in a statement that the agency has worked well with BUILD in the past.

“We look forward to continuing to work with BUILD and all our community partners to tackle the challenge of blighted and abandoned properties in Baltimore City,” the statement said.

Scott ended his remarks by emphasizing there will be no “quick wins” when it comes to the city’s vacant housing crisis.

“I know this is crazy for someone in political office to say: This problem and this entity and this work is going to outlast my time in elected office, and it should,” Scott said. “Because if we don’t start this work now, someone will be standing here outside of Greater Harvest 20 years from now talking about the same problems. We have to do that work now.”