Housing Roundtable

The Baltimore Housing Roundtable

The Housing is a Human Right Roundtable is a space where homeowners, renters and the homeless have come together monthly since 2014 with non-profit developers, community associations, religious institutions, policy experts and university faculty to examine Baltimore’s housing challenge, craft human-rights based solutions, and facilitate a campaign to forge new city policy.   

Baltimore’s Housing Challenge

Baltimore is seen by most as a city with affordable housing, but its poverty puts most of its residents on the edge of homelessness.   Over the last year, 4,000 persons were without housing, another 4,380 faced this risk under threat of foreclosure and 150,000 tittered on its edge for non-payment of rent.[1]   When these numbers are totaled and compared to census figures, it appears that almost 65% of households in Baltimore are homeless or at risk of homelessness annually.[2]   The number of evictions and foreclosures annually filed equals 52% of the housing units in the City.[3]   These figures square with those reflecting housing burden costs in the city.   Fifty-three percent of renters and 40% of homeowners pay more one-third of their income for housing.[4]   One-third is the proportion considered “affordable.”

The prospect for an increase in incomes is not promising.   Wages, adjusted for inflation, have flat-lined over the last 30 years.  The exit of manufacturing jobs have left most city residents toiling in the low-wage, non-unionized service sector of retailing, food service, and care service.  These sectors are plagued by ever-changing work schedules and legal arrangements that make jobs more temporary, part-time, and contingent.  Those with criminal records face discrimination regularly, and are forced to engage in day labor or employment through temporary staffing agencies. 

For those unable to work, needs-based public assistance and disability compensation rarely are indexed for inflation, and eligibility for aid is a bureaucratic obstacle course.  

In short, those who walk our streets, sit in rent court, or face foreclosure are simply those whose incomes fail to keep pace with landlords, sellers, and developers trying to profit in the private housing market.   In short, the market is always under “speculative” pressure, which pushes what look to be even relatively low rents of house prices higher.  

Baltimore’s Housing Solution

Clearly, the majority of our city residents need higher wages and higher incomes.  But because of the nature of the speculative housing market, increased incomes paradoxically may also drive property values and housing costs higher, as will the development needed to increase job opportunities.   This may keep residents struggling with housing costs, as well as involuntary displace others from longtime neighborhoods and the City. 

One key solution is the creation of vibrant and ample “non-speculative” housing sector.   This sector contains a range of permanently affordable housing options, from Public Housing to limited-equity co-operatives, and Community Land Trusts.  Some non-speculative models allow a modest equity return for a seller of housing, but pre-determined affordability formulas limit sale prices, thereby keeping housing perpetually affordable. 

The most non-speculative model, public housing, has declined dramatically and is being privatized.  As the chart below indicates, by 2020 the number of public housing units in Baltimore City will be lower than Post WWII levels. 

“Section 8” Housing vouchers, which allow holders to pay no more than 30% of their income for housing are helpful, but do little to combat speculative pressures in the housing market.  Section 8 landlords can always evict their tenants and sell the housing when property values increase. Additionally, there is evidence that housing vouchers add to speculative pressure, actually giving landlords an incentive to increase rents.[5]

While non-speculative models, other than public housing, are usually touted in areas where property values are rapidly increasing, the Community Land Trust (CLT) is a non-speculative model that offers unique tools for neighborhoods in need of revitalization.  CLTs become new community institutions—a non-profit corporation run by CLT residents, neighbors, and public officials—that own land and can influence development in the community.  CLTs bring residents together, outperform other first-time, low-income homeowner programs, and retain housing-related public subsidies within the community rather than allowing them to be pocketed by someone exiting.[6]   CLTs are in operation in Cleveland, Philadelphia, and other challenging real estate markets like Durham, N.C. 

Baltimore’s Opportunity

Baltimore’s opportunity lies with what many consider its most glaring weakness—vacant housing.   Estimates of vacant properties in Baltimore City range from 15,000 to 40,000.[7]   Regardless of the actual number, vacant housing decrease equity for nearby or adjacent homeowners,[8] discourage landlords from keeping rental properties up to code,[9] and mystify homeless persons who wait interminably on subsidized housing waiting lists as they scramble for a declining number of shelter beds. 

To date, Baltimore has looked primarily to the speculative housing market for help in solving the housing challenges the market created and the vacant housing.   City policies attempt to incentivize housing profit, in an attempt to draw outside private capital into the city.   The City forgoes $95.7 million annually via a host of property tax credits and exemptions designed to attract private investors, and regularly sells its “tax liens” in hopes that speculators will renovate vacant housing.[10]   The Mayor hopes to attract 10,000 new city residents by 2020.[11] 

But the profit motive has not been incentive enough to demolish vacants that are structurally unsound, nor lure many developers to renovate others.   According to census figures, Baltimore’s current vacant housing count is roughly equivalent to the 1980 figure.[12] 

Rather than incentivizing outside investors to solve the problem of vacants, the City should look first to its own residents, incentivizing and empowering them to take control of vacant properties through CLTs.  With city assistance in transferring property and providing seed money through municipal bond proceeds, the City can provide motivated neighborhood residents with concrete tools to be change agents.   Vacant properties can be demolished, renovated, and converted to green spaces through a process that brings the community together, and builds community wealth.  These CLTs can build a robust non-speculative housing sector in Baltimore, one that can co-exist with a speculative market, yet provide permanently affordable options for residents who face market challenges.  Needless to say, demolition and renovation employment is ideal for those with criminal histories. 

The Tools

City policy could support CLT development of vacant properties by four means

  • Property Acquisition—the City’s “Vacants to Value” program or the city-charter authorized (but never created) Land Bank Authority should assist and facilitate vacant property acquisition for communities.
  • Financing –the City’s Capital Budget should include regular community development bond issues for community controlled vacant property demolition and renovation.
  • Governance –the City should incentivize CLT governance structures that are diverse and combine community, financial, and government expertise.
  • Planning – the City should work with CLTs to implement community master plans, develop such plans where absent, and provide assistance in community decisions on housing demolition, renovation, and the development of green space.

[1] 4,000 homeless, Balt Homeless Census; 148,189 rent court filings, Zafar Shar: 4,380 foreclosure filings, BNIA foreclosures 2013 http://foreclosures.bniajfi.org/filings-ratified-sales.php   Total of 158,387,

[2] Balt Census Households 2009-2013 = 241,455.  http://quickfacts.census.gov/qfd/states/24/24510.html

[3] Evictions 148,189 + Foreclosures 4,380 = 152,569 vs. Census Housing Units, City = 295,737.  Census facts. 

[4] National Low Income Housing Coalition, Out of Reach, 2011; Baltimore Housing 2010-2015 Consolidated Plan p. 29. 

[6] Jacobus, Rick and Davis, John Emmeus, “The Asset Building Potential of Shared Equity Home Ownership,” January 2010.

[7] Newman, Low End Rental Housing, pp.8-10, available from Abell Foundation. 

[8] (stats in Philly indicate a decrease in value of roughly ___%)

[9] 32% of housing in Baltimore is considered substandard, Abell Study. 

[10] Property Tax Expenditures, Summary of FY2015 Budget, ____. 

[11] Baltimore Sun, December 6, 2011, Mayor’s Goal: Bring 10,000 New Families To City In A Decade. 

[12] Census 1980 – Census 2010