August 5, 2015 [Bob Sandrick, special to cleveland.com]
CLEVELAND HEIGHTS, Ohio – On North Coventry Road, just a stroll from the famed Coventry Village, Cleveland Heights may try something it has never tried before – rebuild a neighborhood.
North Coventry, which runs from Mayfield Road north into East Cleveland, is dotted with empty residential lots. That’s because the city has been partnering with East Cleveland and Cuyahoga Land Bank to tear down more than 60 dilapidated, vacant houses.
Since late 2013, about 55 North Coventry houses have been leveled. Because of the large number of bare lots concentrated in one area, the city may sell the land to a residential builder or developer.
“It’s new ground, an aberration that came up due to the recession,” said Rick Wagner, housing programs manager for Cleveland Heights. “We want to clean up the blight, then look at redevelopment.”
The project is one of a variety of measures cities have taken to deal with older, deteriorating homes that have either been foreclosed on, abandoned or both.
More than 22,000 homes in Cuyahoga County were vacant last fall, years after the end of the housing crisis. The severity of the problem varies — it’s worse in the inner ring suburbs, especially on the east side.
But county government, through its new Property Demolition Program, has pledged $50 million — its biggest sum ever — to tackle the blight. In April, the program awarded Cleveland Heights $556,000 to tear down 49 vacant and dilapidated houses. Shaker Heights was given $885,000 to demolish 20 houses and commercial buildings, including the former Qua Buick dealership on Warrensville Center Road.
In North Coventry, about $2 million for demolitions came from the state and the Cuyahoga County Prosecutor’s Office. It was part of the settlement of a 2012 federal lawsuit against five mortgage providers that loaned money without vetting borrowers.
“It’s new ground, an aberration that came up due to the recession.”
All of these programs, along with an improved housing market, are making a dent.
According to U.S. Postal Service data, analyzed by the Northeast Ohio Community and Neighborhood Data for Organizing and the Western Reserve Land Conservancy, the number of vacant homes in Cleveland Heights dropped roughly from 834 in 2010 to 709 in 2014.
In Shaker Heights, the number of vacant homes fell from roughly 305 in 2010 to 215 in 2014, according to NEO CANDO. The number dropped from 151 to 87 in University Heights and from 56 to 47 in Beachwood.
Cleveland Heights demolished 15 homes in 2008 and as many as 31 in 2012. Last year, the city knocked down 21.
The city doesn’t have to own a deteriorating house to bulldoze it. If the owner doesn’t respond to violation notices or show up in housing court, City Council can formerly declare the house a nuisance, which under state law and municipal code allows the city to demolish it. The city tacks the demolition cost onto the property owner’s tax bill.
Helping fund the demolition program is a one-time $2.3 million grant from the federalNeighborhood Stabilization Program. The city received the grant about five years ago and is still using the money. In addition to demolitions, the city obtained, rehabilitated and sold another 14 houses, thanks to the grant.
The Cuyahoga Land Bank also pays for house demolitions. Cleveland Heights first partnered with the land bank in 2011 in the DeSota Avenue neighborhood, where 16 houses have been taken down so far.
The land bank and city have shared demolition costs of larger commercial buildings, including the old Medic Drug at Noble and Glenwood roads and the former Clark gas station at Noble and Roanoke Road.
Sometimes, cities like Cleveland Heights can take ownership of a house, then repair and sell it. Here’s how:
If a property falls into tax foreclosure, the Cuyahoga County Sheriff’s Office tries to auction it off. A property that doesn’t sell is forfeited to the state of Ohio.
The county Fiscal Office offers the property at two more public auctions. If the house doesn’t sell at the first auction, the county can reduce the price to rock bottom at the second – or transfer the property to its home city.
Once Cleveland Heights obtains a property, the city’s informal Vacant Lot Committee, made of Wagner and other administrators, decides what to do with it. The city can tear down the house, divide the lot and give the land to neighbors.
The city might also rehab a house, using federal money and following federal guidelines. The city hires the lowest-bidding contractor, which must correct all violations, install modern appliances and make the house energy-efficient.
“It’s as good as a new home,” Wagner said.
Then the city sells the house, at market price, to an owner-occupier.
Shaker Heights also rehabs and sells vacant homes through the city’s Shaker Renovator Program.
Kamla Lewis, Shaker’s director of neighborhood revitalization, said 19 houses have been renovated through the program since it started in 2011. Most have been sold, and three are now on the market. The renovator program has added more than $4 million of new residential tax value, Lewis sad.
“It was one of the key Shaker programs aimed at leveraging private investment into the housing stock,” Lewis said.
But the process in Shaker is a little different than in Cleveland Heights.
For example, CAP Construction LLC is now renovating a vacant house on Winchell Road. The city obtained the house after it fell into tax foreclosure. Lewis said the structure is sound but the interior was a mess, with several violations.
But the city didn’t hire CAP; it sold the house to the firm for $1.
In exchange, CAP must correct all violations. The company must install new electrical lines, water pipes, heating and air conditioning systems, insulation, windows, landscaping and a security system. CAP must also rebuild the back porch.
The estimated cost of the renovation is $100,00-$125,000. When CAP is done, it must sell the house to an owner-occupier, under the company’s contract with the city.
CAP owner Anthony Paciorek, who has done five previous home renovations for Shaker, said people ask him if he’s going to flip the house – fix it on the cheap and sell it for a handsome profit. But the city contract won’t allow shortcuts, and that’s fine with him.
“I love doing it,” Paciorek said. “We’re doing the job like I’m moving my own family in here.”
Staying in front
Lewis said Shaker Heights, through interaction with residents, saw the foreclosure crisis happening long before it was declared.
In the early 2000s, when city inspectors issued housing violation notices, they became acquainted with the property owners. City officials learned some of these residents had mortgages involving subprime loans with high interest rates and unreasonable repayment terms.
So in 2006, Shaker performed a foreclosure and lending study. It showed that subprime loans were closely connected to refinancing and foreclosure. Alarmed city officials, seeing vacant houses on the horizon, believed they had to do something.
“Early action from the city was critical,” Lewis said.
The city already had some housing programs in place, including:
- A homeowner education program. The city teaches homeowners how to handle, or stay out of, foreclosure.
- A tenant-screening program. Many landlords don’t know that tenant-screening companies exist. The companies evaluate a prospective tenant’s ability to pay the rent and take care of a rental property. The city solicits proposals from tenant-screening firms and finds discounted rates for landlords.
- A nuisance-abatement program. If gutters are hanging off a house, of if the grass is high, the city will repair and landscape, whether the house is occupied or not. The city bills the property owner directly, and if that doesn’t work, adds the cost to their taxes. To pay for the program upfront, the city borrows by issuing bonds.
- Point-of-sale inspections. Before a title is transferred, an inspection must identify all violations, and either the seller must correct violations before the sale or the buyer must assume responsibility.
As a result of the foreclosure and lending study, the city:
- Created a landlord-training program. Landlords learn to manage their properties, screen tenants and comply with fair housing laws and eviction procedures.
- Passed a vacant-property ordinance. Criminals damaged or moved into some vacant houses. Neighbors complained but police were helpless – legally, they needed the owner or owner representative to say the criminal had no permission to be there. So City Council passed an ordinance saying that if the city declares a house a nuisance, and the owner is absent, the city has custody of the property and can protect it from, and prosecute, invaders.
- Enacted a nuisance property law. If the owner doesn’t correct violations, the city can tear a house down and –like Cleveland Heights – give the land to neighbors. In one case the city obtained a lot and sold it to Heights Christian Church, which installed a community garden and labyrinth.
- Hired a vacant property monitor. This full-time worker checks vacant properties for bushes that need trimming, grass that needs mowing or paint that is flaking. If the problem isn’t fixed, the property goes into the nuisance abatement program.
- Established a foreclosure-filing fee. If a bank forecloses on a house, it must pay the city $150 — $300 if the money comes in late. The paper work gives the city a person it can contact to make sure the bank cares for the property while it’s vacant. The city then tracks the property and, working with the bank, determines if the house needs demolished.
“We have a history of being proactive,” Lewis said.
University Heights, on its website, touts itself as the “city of beautiful homes.”
Eric Tuck-Macalla, building commissioner for University Heights, says the low number of homes in distress – only five or six properties in the city, he said – supports that title.
Nevertheless, those five or six homes are a concern for Macalla, who started with the city a year ago. He recently established a nuisance abatement program for University Heights.
Through the program, City Council can declare a house a nuisance, which allows the city to cut the grass or pick up garbage. If necessary, the city hires a contractor to make repairs, or the city can tear down the house.
So far, two University Heights residential properties have been declared nuisances. The Cuyahoga Land Bank tore down one of those houses.
Sometimes a company or investor buys a vacant house. Macalla doesn’t worry about the company flipping the property; he’s just happy the city has a contact person because it increases the chances the lot will be maintained.
Beachwood officials did not return calls. The city had 47 vacancies during the fourth quarter of 2014, according to NEOCANDO.