Consultant erred in analysis of Cleveland's long-term cost of blight, Councilman Brancatelli says (Plain Dealer)

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Consultant erred in analysis of Cleveland’s long-term cost of blight, Councilman Brancatelli says (Plain Dealer)

Correction: A graphic published originally with this story incorrectly said that the city of Cleveland pays the economic costs when distressed houses that should be torn down are permitted to stand. The graphic, in its headline and in the text that accompanied the illustration, should have said that not demolishing such homes can result in each home representing $27,000 in “economic costs,” according to a consultant’s report, including maintenance for the home and lot and many other costs, such as loss of tax revenue, increases in crime and more. The Plain Dealer regrets the error.

Correction: Safeguard Properties, a company that specializes in dealing with abandoned homes, spends about $200 a month per house on routine maintenance, which includes grass cutting, snow removal, routine inspections, debris removal and similar services. Properties may incur additional costs to address vandalism, severe storm damage or other special circumstances. A story on Wednesday’s Page One incorrectly described the cost.

A consultant for Cleveland City Council erred in stating that it costs $75 a day to keep a vacant property in Cleveland boarded up, mowed and free from vandalism, a councilman said Tuesday.

In the week since Councilman Tony Brancatelli cited the figure in a meeting with U.S. Treasury officials in Washington, neither Brancatelli nor the consultant has been able to provide a breakdown for the $75-a-day calculation.

It costs a private company less than $10 a day on average to secure a vacant property in Cleveland.

A spokeswoman for Valley View-based Safeguard Properties, a company that specializes in dealing with abandoned homes, said in an interview Tuesday that the company spends on average $1,000 to initially secure a vacant house in Cleveland and about $200 per month for routine maintenance, such as mowing the lawn and keeping it free from debris. (Note: An earlier version of this story incorrectly included cleaning up vandalism in that average.)

Brancatelli — who joined a Cleveland contingent in Washington D.C. for the Interagency Meeting on Residential Property Vacancy, Abandonment and Demolition —  said the council-commissioned report was incorrect when it claimed that those expenses could cost the city as much as $4.5 billion over the next 22 years.

The report, prepared by consulting firm Gaylord LLC, concludes that physically securing one of the city’s 13,500 vacant houses costs an average of $27,000 a year — $540,000 over two decades — while it awaits demolition.

That calculation, according to the report, excludes additional costs to the community that accompany blight, such as the increase in crime, loss of population and tax revenue, drops in home sales and overall declines in business.

The report listed more than a dozen sources for its conclusions, but none explained the calculation. And contrary to her own report, Becky Gaylord, president of Gaylord LLC, wrote in an email last week that her figure does “include fines, taxes and other assessments — not just maintenance.”

“This is not the kind of thing that [can] be sourced immediately,” she wrote, responding to requests for clarification of the $75 calculation. In a later interview, Gaylord said the expenses her report listed were merely examples, intended “to illuminate the kinds of things that are included,” and should not be taken as a comprehensive catalogue of costs.

Brancatelli said in an interview that the report failed to make clear that the calculation  included deferred costs. He cited a 2012 report by Enterprise Community Partners Inc. and the Pew Research Center stating that those holding costs on vacant property could land anywhere between $25 and $100 a day. But that report, which was listed among Gaylord’s sources, failed to explain what that pays for.

Brancatelli said the report’s overall message is accurate — that the city faces a glut of vacant and blighted housing and is desperate for an infusion of federal dollars to meet its demolition goals.

“We don’t want the government to feel like it can be let off the hook because we received money from the settlement,” Brancatelli said, referring to the city’s recent $8 million slice of a nationwide settlement with mortgage lenders, earmarked for demolition in the aftermath of the foreclosure epidemic. “We’ve got to raise awareness of this problem and raise money.”

A Plain Dealer story about Gaylord’s report drew criticism from readers, who were quick to point out the flawed calculus on and in e-mails. Some wrote that they sympathize with the city’s housing problem but feel misled by the report’s conclusions.

“Including ridiculous estimates like this ($75 a day) in his presentation blew any chance Councilman Brancatelli had at establishing Cleveland’s credibility on this issue,” wrote one reader, who uses the handle “cosmosmaster” on “Extrapolating that figure 20 years out to the $540,000 figure cited goes from the ridiculous to the sublime.”

Robert Olsson, 57, of South Russell wrote in an email last week that he, too, read the report with incredulity.

“Seventy five dollars a DAY to maintain a condemned home?? Really?” he wrote. “I don’t spend $75 a day on the home I live in!! … We’ve got a lot of unemployed people who would love that job at $27,000 per year. I’ll take care of 5 or 6 if they want.”

Council paid Gaylord’s company $20,000 for the report and her advocacy.

Read it from the source.