Wednesday, November 12, 2008

Blight motion will be considered in upcoming Cincinnati budget

Cincinnati city manager Milton Dohoney Jr. thinks that a City Council motion aimed at stepping up the demolition of blighted buildings is unworkable, but should be kept in mind as the City prepares its 2009-2010 budget.

In October, Councilmember Chris Monzel proposed that City administration expend the maximum allowable amount of available resources to acquire and demolish blighted structures.

Sources of funding could include City capital funds, Community Development Block Grant (CDBG) funding, and Neighborhood Stabilization Program (NSP) funding.

Dohoney says that he sees two main concerns with Monzel's proposal - the addition of property acquisition to the hazard abatement process, and the impact that may have on the allocation of resources.

"Adding an acquisition component to the current Hazard Abatement program would result in a decrease in demolitions by approximately one-half to two-thirds," he says. "The cost of purchasing a building and land and then paying for the demolition and the maintenance and taxes on the land is far more expensive than the expense incurred by the current hazard abatement program."

Currently, the City's hazard abatement program puts a lien on property for the cost of demolition.

In 2008, the City appropriated $1,000,100 for the demolition, and they expect to appropriate even more in the 2009 budget cycle.

The average cost of a demolition is $14,000.

The "purchase and demolish" model has been used in Westwood.

One multi-family apartment building targeted for demolition had an owner contract price and City appraisal of $200,000.

With the costs of demolition and property maintenance, the figure approached $250,000, or five times what it would cost the City under the current hazard abatement program.

"A purchase and demolish program would also force the City into owning scattered vacant land and parcels and force the taxpayers into paying for the grass cutting, litter removal, and taxes on these sites for years to come," Dohoney says. "This type of policy without identifying a use or plan for the land could become problematic."

In addition to these concerns, Dohoney says that reallocating resources could damage other housing programs that they fund, such as People Working Cooperatively's Emergency Home Repair Program.

"The Administration believes that keeping citizens in their homes by assisting with fundamental home repair is a preferred alternative to allowing that home to become uninhabitable and leaving the City to bear the cost of loss of a housing unit and tax base as the building is eventually abandoned and demolished," he says.

Additionally, the City would be out of compliance with the U.S. Department of Housing and Urban Development if they fail to spend at least 25 percent of NSP funds to house people whose incomes are no greater than 50 percent of the area median income.

Some of the remaining housing funds will be used for blight removal, and some to rehabilitate foreclosed homes.

"The Administration strives to strike a balance between blight abatement through prevention and rehabilitation in both CDBG and NSP funded activities."