News & INSIGHTS

Four Baltimore ministers representing Baltimoreans United In Leadership Development (BUILD) have made a persuasive case in calling for dramatic action to remove the blight of vacant properties in Baltimore’s neighborhoods. The presence of these vacant structures results from years of redlining Black neighborhoods. The vacants are a cancer for the people living near them: They are dangerous to both physical and mental health. People get killed in and around them.

Another basis for finally ending this chronic condition is solid economics. Rehabbing these vacants is likely to more than pay back the cost of doing so. Sound analysis supports this claim.

During the past few years, four studies have addressed the housing demand, the economic and fiscal impacts of reclaiming these houses, and the ultimate goal of getting more people to live in Baltimore.

First, as the ministers state, Mary Miller and Mac McComas at John Hopkins University’s 21st Century Institute have measured the costs of our current vacant houses — both the direct costs to the city and the loss of taxes because these properties are unoccupied. They conclude that the annual cost of this combination of lost taxes and direct costs is $200 million per year. So, unless we go to scale and eliminate these vacants, the taxpayers of Baltimore City will lose a billion dollars over the next five years.

There is hope for a solution. A study by one of the best housing market analysis firms in the nation, Zimmerman-Volk Associates, was conducted for Live Baltimore in December 2020. The report is bullish on the market strength in Baltimore. Combining newcomers and existing Baltimore City residents, ZVA focused specifically on the market for new and renovated housing and reports that “between 5,300 and 7,100 households would rent or buy new or significantly renovated homes each year over the next five years, if rehabbed.”

These numbers mean that Baltimore could reverse its population loss and become a population gainer like other East Coast cities. What’s needed? First is quality, attractive renovated housing; second is good, safe neighborhoods; and third is sustained marketing that positions Baltimore City as a desirable place to live in the minds of potential residents.

The third study, by Econsult Solutions Inc. was for the Baltimore Development Corp. in August 2020, with input from the Baltimore City Department of Finance. This report takes ZVA’s data and looks at the likely economic and fiscal impact of their projected population increases. The report states: “The added residents would bring $1.97 billion per year, supporting nearly 11,000 full time jobs and $655 million in employee compensation.”

ESI also concluded that the increased taxable personal income and additional property taxes paid to the city would be $127 million annually, plus another $170 million to the state. This revenue is in addition to the $100 million cost savings documented in the Miller/McComas report. Even though some of this revenue will be needed to cover rehab and new infrastructure costs, the benefits outweigh the costs.

The fourth report, by czb estimates that about $2.5 billion in public funds are needed to rehab the vacant house inventory in Baltimore. That sounds like a lot of money. Yet, ESI is telling us that the result of this public investment will be close to $2 billion per year from new household spending to Baltimore’s economy.

And there is another economic effect — the jobs and income from the actual rehabilitation of the vacant properties. According to the czb estimate, the overall investment needed to rehab the vacants in Baltimore is $7.5 billion ($2.5 billion public investment leveraging $5 billion in private investment). How much construction is that? It’s the equivalent of building 14 20-story buildings in Baltimore — or more than one per year for the next decade. That’s a lot of jobs, a lot of payroll taxes, and a giant stimulant for the local economy.

So, what are we waiting for? These professional calculations make a persuasive case that it makes great economic and fiscal sense to finally tackle and solve the vacants problem plaguing Baltimore City.

Finally, in addition to moral and social justice reasons for ridding the city of vacants, there is one additional reason:

How can we possibly make dramatic investments to increase the attractiveness of Baltimore — such as bold improvements to the Inner Harbor or downtown — while so many of us live with the presence of 15,000 or more vacant houses? The vacancy malady mutes our collective ability to celebrate Baltimore and take the daring actions to make Baltimore a stronger regional hub, national tourist destination and thriving economy for all Baltimoreans.

Paul C. Brophy is a principal with Brophy & Reilly LLC who specializes in neighborhood revitalization. He is also a senior adviser to the Robert W. Deutsch Foundation. He lives in Baltimore.