Empty neighborhoods fill Rust Belt

CINCINNATI (AP) — Meet the forgotten housing crisis.

While most attention has focused on the wave of foreclosures sweeping mostly middle-class, suburban Sunbelt neighborhoods from California to Florida, the nation’s emptiest neighborhoods have remained concentrated in the same place for nearly a generation: the mostly minority, poor, urban neighborhoods of the American Rust Belt.

An analysis by The Associated Press, based on data collected by the U.S. Postal Service and the Housing and Urban Development Department, shows the emptiest neighborhoods are clustered in places hit hard during the recession of the 1980s — cities such as Flint, Mich.; Columbus, Ohio; Buffalo, N.Y.; and Indianapolis.

“I’d move in a heartbeat if I had somewhere to go right now,” said Cindy Olejniczak of Buffalo, raking trash from the lawn of a boarded-up house to keep it from blowing into her yard. Roughly every third home in her neighborhood is vacant. Not even pizzerias will deliver to the area now.

“It’s almost like you wish they would just level the whole neighborhood,” she said, “and start rebuilding again from scratch.”

Federal lawmakers have designated nearly $6 billion over the past year for local governments to do just that — buy and either rehabilitate or demolish foreclosed and abandoned homes.

The AP’s analysis, however, shows the money will only make a modest dent in the problem. As of March 31, there were about 4 million homes that have been empty for 90 days — a slight increase over last year’s figures and about 3 percent of all U.S. homes.

The federal money will be distributed based on a complicated formula that considers local rates for foreclosures, high-cost mortgages and vacancies. There won’t be enough money to completely fix places such as the neighborhood in western Columbus that is the nation’s emptiest. A mostly vacant apartment complex with chained-off parking areas shares a drab stretch of asphalt with a strip club, payday lender and abandoned retail stores. About 70 percent of the neighborhood’s housing is empty.

The number of abandoned homes scattered throughout the nation’s 65,000 neighborhoods concerns federal officials because of the potential to prevent the economy from recovering. Empty housing feeds upon itself. Experts say as more houses stand vacant, property values and tax revenues drop. The drop in property values lead to fewer buyers, which lead to more vacancies.

“It becomes a vicious cycle,” said Jennifer Vey, a researcher with the Washington-based Brookings Institution. Vey said people have been shoved out of the Rust Belt by the collapse of the manufacturing economy for more than a generation now, and drawn to the temperate Sun Belt by more jobs and a lower cost of living.

The cycle makes residents in hard-hit neighborhoods feel as abandoned as the vacant buildings that surround them.

In some sections of certain areas such as Cincinnati’s Over-the-Rhine neighborhood, roughly two of every three homes are vacant or used by squatters. The area is more than 70 percent black and poor, with unemployment often around 50 percent. It’s a place where simmering resentment and frustration boiled up into three days of rioting in 2001 after police fatally shot a young, unarmed black man fleeing arrest on traffic warrants.

The neighborhood, which took its name from early German immigrants, is highlighted by its 19th century Italianate architecture. On a cool morning on Elm Street, people sat on front stoops, chatting amiably with each other and greeting passers-by on what at first glance looked like a thriving, friendly residential block. But a look up at windows with only darkness behind them and doors with “No Trespassing” police orders gave it a Potemkin village feel.

“All those are empty,” said Joe Griffin, 50, who is homeless and spends nights in a shelter and public park.

Cities across the region are trying to reverse the tide, buying and either rehabilitating or bulldozing empty homes. Even with billions of federal dollars pouring into cities, civic leaders such as Steve Leeper, director of a Cincinnati development group, say fixing lead paint, asbestos, decay and other problems takes a long time.

So far, his nonprofit group, backed by local businesses, has spent $84 million to rehabilitate Over-the-Rhine housing.

“A 20-year vacancy is just brutal on a building,” said Leeper, maneuvering past construction workers inside the dusty shell of what’s planned as the future home of luxury condominiums.

Already, there are a more than dozen new shops, restaurants and small businesses in Over-the-Rhine, and more than 80 percent of the first new condos have been bought, at an average price of $150,000. Sales have been strong in 2009, Leeper said, particularly among first-time home buyers who don’t have the problem of trying to also sell suburban homes in the down housing market.