Photo: David S. Holloway / Getty
Homelessness has been on the rise in America’s cities since the start of recession, but it’s not for lack of housing. According to some reports, there are now an estimated five vacant properties for every homeless person in the U.S., many left empty as the result of the foreclosure crisis.
Actually putting this property to good use, however, is harder than it seems. Or maybe, given the legal complexities of owning property, it’s exactly as hard as it seems.
There are some models for converting vacant housing into space for the homeless. Under the Title V program (part of the McKinney-Vento Homeless Assistance Act), the federal government requires that empty or “underused” properties that it owns be made available to homelessness advocacy organisations. Every week, a list of the available properties are printed up in the Federal Register. Non-profits (along with state and local agencies) can submit a proposal for how they’d like to use the space. The only rule: it must benefit the homeless.
If the Department of Health and Human Services approves the application (they have 25 days to do so), the property is transferred. Between 1988 and 2003, 91 such properties (worth some $105.4 million) were handed over to help the homeless. One of them, in Little Rock, Arkansas, was a former VA hospital converted into an apartment complex for homeless families. The facility also offers job training and child care includes over 40 units of housing. “The cost of real property can be prohibitive to any homeless service provider,” says Tristia Bauman, the housing attorney for National Law centre on Homelessness and Poverty. “With this program, [organisations] are able to engage in work they might not otherwise have been able to do.”
There’s also the 1994 Base Closure Act, which converts closed bases into homeless housing (run by a local redevelopment authority).
It’s a decent model for state and local governments, but converting privately owned homes is much, much more complicated. A large chunk of the current vacant housing stock is made up of homes that were foreclosed upon, meaning they’re now owned by banks. Banks, of course, don’t want to hang onto vacant properties any longer than necessary lest they get stuck with additional property tax bills, and it’s tough to act as a landlord for thousands of homes across the county.
Some banks have solved this by bulldozing foreclosed homes and giving the property over to the city. Bank of America, for example, donated 100 lots in Cleveland after bulldozing the properties; they’ve made similar contributions in Chicago and Detroit. Other banks have done this as well. According to the New York Times:
JPMorgan Chase has donated roughly 3,300 homes to nonprofits or municipalities since 2009, according to a bank spokesman. Last year, Citibank donated 205 properties.
Wells Fargo gave 100 properties to the Cuyahoga County Land Reutilization Corporation. Municipal governments like Cuyahoga County prefer the empty land, in a lot of cases, because they can assemble bigger parcels for development or park use. And banks say it’s more economical to knock the houses down than fix them up.
This frustrates many homeless advocates. Picture the Homeless, a New York City-based advocacy organisation, issued a 2012 report calling on the city to convert its vacant housing stock into affordable housing. The group also wants the city to mandate that residential buildings vacant for more than three years must be turned over to the city and converted to affordable housing.
There have been pushes to do just this. In her 2009 State of the City address, New York City Council Speaker Christine Quinn unveiled a plan to convert unsold condos into affordable housing. “These vacant apartments now represent our best asset in the fight for affordable housing,” she said at the time. Quinn launched the Housing Asset Renewal Program, a $20 million pilot program to transform unsold condominiums and stalled residential construction sites into affordable housing units. But no deals were ever made.
It comes down to a housing philosophy. Though the city has the right to take over properties in tax foreclosure (in the 1970s and 1980s, it took over tens of thousands of spots this way), it prefers to rely on private developers to buy and refurbish the properties. The city acts as a facilitator, says Catie Marshall of New York’s Office of Housing Preservation and Development, pulling these properties together and making sure builders know about them.
This strategy makes sense for other cities, too: they don’t want to be strapped down refurbishing and selling property. And the parcels banks want to give away often house the worst, most decrepit homes. Instead, the best many municipalities can do is offer land up to people who know what they’re doing and hope for the best.
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