What should be done with vacant property?

MinnPost’s Jeff Severns Guntzel is mapping every vacant property in Minneapolis, a worthy effort in light of a shift in attention from the mortgage market meltdown to what will happen with all of these empty buildings in Minneapolis and elsewhere.

On CNBC, this morning, one “analyst” had this idea: knock them down, says Joseph LaVorgna, Deutsche Bank’s chief economist.

“If we have excess housing, why not pay to remove the excess supply from the market, the marginal supply goes up, people feel wealthier, and it deals with the problem, “LaVorna said.

“It shouldn’t count on taxpayer dollars to do any of it, ” CNBC’s trader/ranter Rick Santelli countered. ” He says if the idea has merit, the owners of record — usually a bank — should pay.

Most experts figure the housing market won’t rebound until the “excess supply” of foreclosed houses are off the market, either because someone buys them or someone destroys them.

(Video: Craig Stellmacher)

  • Wow, I think that’s a bit harsh.

    Perhaps the city could buy them and rent them to low(er) income individuals that need good housing? Between my roommate and I we bring home a little over $2000/month and more than half of that is going to rent.

  • Jim Shapiro

    Screw the experts. Convert them to homeless shelters.

  • bsimon

    This isn’t a new issue & should be covered by existing laws on the books. Perhaps it was a couple years ago now; but if I’m not mistaken, St Paul recently went through a round of demolishing homes that it viewed as being beyond repair.

    I assume cities & towns with older housing stock have already been through enough boom & bust cycles to have laws on the books that deal with nuisance properties. Perhaps newer boom suburbs haven’t yet had to deal with the problem & thus are faced with establishing new policies.

  • John P,

    I like the idea ryanspublicfeed put out there, but I can see all sorts of complications that would need attention.

    If the city is the landlord, I imagine all sorts of obligations come with that, like maintenance, safety, and lots more.

    It may result in more city government, but if the rents paid for that it could actually be a money maker and increase employment.

    It seems worth exploring to me.

  • V

    See what that brings over the long term. That’s a Detroit neighborhood in 1949 and 2003.

  • Sam

    There’s a house around the corner from me in the Seward neighborhood of Mpls that got foreclosed on late last year. Even from outside, you could see it was in terrible shape, and I figured it’d sit vacant until it got condemned and eventually knocked down. Instead, whatever lender owned it put it on the market as is, asking just $20,000 (it had previously sold for $140K in 2004.) It was implicit that whoever bought it would have to put a lot more money than that into making it habitable again.

    According to city records, there’s been no official sale yet, but a couple has signed an “acceptance of responsibility” for the property, and there’s been a steady stream of workers all over the house for the past couple of months. There’s new siding in place, and it looks like the inside is getting a down-to-the-studs makeover as well. Presumably once they’re done and the house passes inspection, the couple will be the proud owners of a good house in a great neighborhood, the neighbors won’t be living next to an eyesore or a vacant lot, and the lender will be well rid of a worthless asset.

    That seems to me like a much better plan than “knock ’em down.”

  • Drae

    The market will naturally deal with the empty houses – if folks would just have the patience. Either new homeowners will come along or a developer will find the land a good deal and knock the houses out anyways.

    Cost to tax payers: $0.