It was broad daylight, and a guy was standing in the middle of Ross Street with a gun.
The Beall’s Hill neighborhood bordering Mercer University was in the midst of a redevelopment that would involve the demolition of a decaying housing project, the rehabilitation of dozens of historic dwellings and the construction of new mixed-income homes.
Alison Souther Goldey, the Macon-Bibb County Land Bank’s executive director, was showing her assistant the area where the bank was making its first big push to acquire land and revitalize the area.
“She never went back out with me,” Goldey recalled. “I think people today see the progress there and never saw that.”
The rebuilt Beall’s Hill neighborhood has been held up as a success story in fighting blight and revitalizing a part of town that many had written off as unsalvageable. A key component to the transformation of Beall’s Hill, a 32-block area mostly between College and Tattnall streets, was the power of the land bank.
“I don’t think anyone would have considered moving into that neighborhood (before),” Goldey said. “The beauty of the neighborhood is now you have a mixed-use, mixed-income neighborhood. There are people living in that neighborhood who have been there for over 40 years who were the hard-core, let-me-stick-it-out people, … and now we have those people living next door to Mercer professors. We have mixed races, mixed incomes and probably one of the best neighborhood associations in the country.
“Those people have banded together and shaped that neighborhood, and it really shows what can happen when all take an interest in a neighborhood on the decline with houses that are blighted and vacant.”
The land bank’s biggest power is the ability to forgive delinquent property taxes on land it acquires. This can mean new life for vacant or abandoned property where unpaid taxes might exceed its value — all but assuring a lack of interested buyers.
“We decided to be very strategic in the properties we acquired,” Goldey said. “We’ll work mostly with nonprofits because that is how the law is written. Our first priority is to acquire properties that are underutilized, tax delinquent and try to put them back into a productive use status.”
Frank Alexander, an Emory University law professor and co-founder of a nonprofit focused on blight solutions, was involved in the creation of the Macon-Bibb Land Bank. He said land banks are a good way to address blight, but there is not a one-size-fits-all approach.
“They are certain tools, legal strategies that become common in our menu of options we were looking at,” Alexander said of the Center for Community Progress. “We try to work with cities or states to first understand the problems and the causal elements in the problem and then create the tools to help them address the problem.”
Those tools available to communities battling blight include land banks but also improved code enforcement and effectively dealing with property tax delinquency. These are all tools being used to some degree in Bibb County.
CODE ENFORCEMENT
Alexander said the priority of housing code enforcement should be the worst properties, those he calls “unoccupied and the unoccupiable.”
“Those properties are the ones causing the greatest threat to health, safety and welfare, to the children on the street,” he said. “Those properties are the ones causing the greatest financial harm to adjoining property values. Those homes are the ones causing the greatest increase in fire department calls, police department calls.”
This is where Bibb County’s code enforcement office is shifting its efforts. The recent consolidation of Macon and Bibb County moved code enforcement to the new government’s Department of Business and Development Services. That office is using a new computer system to better track problem properties and those awaiting demolition. The office also is focusing its resources on properties that might be rated a C, D or F in a new grading system, with F being a property that should be demolished.
“A difference we’ve made there is we’re canvassing the neighborhood with a team of inspectors … versus just the one inspector who was assigned to that area. We’re trying to get everything canvassed faster, and the inspectors are just writing up properties that are the worst,” said John Baker, who recently took over management of code enforcement. “If it’s a dilapidated structure that needs to be demolished, … those are the ones we are focusing on and processing the fastest. We’re still finding new ones, either through abandonment, vandalism or fire.”
Alexander, a national blight expert, also said governments should take a different approach to owner-occupied property, where the goal there should be to support the homeowner.
“At the other end of the spectrum, where I’ve got unoccupied junk, abandoned stuff, then I do everything I can to force compliance or to force a transfer of the property,” he said. “My mantra particularly with the Georgia Legislature is very simple as to vacant, abandoned property: You either fix it up and bring it into compliance with our housing and building codes, or you if don’t fix it up, (and) we the city will board it up, rehab it or bulldoze it. And then you must pay for that. And if you’re not going to fix it up or pay for it once the local government has done it, then you’ve got to give it up.”
PROPERTY TAX DELINQUENCY
Unpaid property tax can be an early indicator that a property will fall into disrepair and possibly abandonment. The county can take tax delinquent properties to auction on the courthouse steps. But a few years ago, the Tax Commissioner’s Office noted that many of those properties weren’t selling.
“Of course, we knew the problem was blight, but we wanted to quantify it,” said Tom Cherry, an administrator in the tax office.
Between December 2009 and March 2013, the county noted 251 of the 342 properties taken to auction for delinquent property taxes didn’t sell. The majority of the unsold properties were valued under $35,000 and offered at a fraction of their assessed value.
“In the grand scheme of things, that isn’t a lot of money in relation to the value of the property. And you look at why it didn’t sell, and the answer is blight,” Cherry said. “It’s just so run down, people are not wanting to buy the property.”
As it now stands, the tax commissioner must start the bidding with the amount of unpaid taxes plus costs associated with filing the lien and advertising the property for sale.
“A lot of times what we find is it’s not that no one wants the property; it’s that the cost of acquiring the property exceeds the value of the property, and that’s the whole issue,” said Bibb County Tax Commissioner Thomas Tedders. “I’m charged with collecting the tax amount, whatever the mathematical equation computes that to be and whatever the collection costs are added to it. That is what I’m charged by law to collect, unless I’m told by someone higher than me to do something different.”
At the request of the former county government, the Tax Commissioner’s Office started looking for solutions. The ideas included having the Board of Tax Assessors lower the value on the property to the amount it’s really worth. In many cases, Tedders said an owner who abandons a property doesn’t appeal the assessed value, which is based on things like square footage, age and location.
“But (the assessors) may not have actually looked at it in the last year and now there’s no door, there’s no windows, it’s missing a roof and walls, but it is still being valued as it were an inhabitable house,” Tedders said. “It is because the owner hasn’t appealed or notified (the assessors) of anything different. We’ll get in touch with them sometimes and they’ll say, ‘Well, that house is falling in.’”
Another proposed solution from the Tax Commissioner’s Office was to forgive the unpaid taxes and start the bidding on delinquent properties at the levy costs, which only run about $325.
“There is one train of thought among the other tax offices across the state … that if the governing entity takes anything less than what the mathematical equation computes those taxes to be, that they are then granting a gratuity to that property owner, which by law they are not supposed to do,” Tedders said. “There is a whole other train of thought that says a true auction is where you say, ‘I am auctioning off this item or property. Do I have a bid?’ And it’s whatever a bid is.”
The Bibb County Commission was interested in this idea, but no action was taken before consolidation in January.
For now, the Tax Commissioner’s Office makes strategic decisions about properties to pursue for auction so the county is not “throwing good money after bad,” Deputy Tax Commissioner Wade McCord said.
“A property’s value is its value,” McCord said. “An assessment by the tax assessors is what they value it at under their parameters, and what someone will pay for it is, of course, what (potential buyers) value it at. “When all those are not in line or … where someone has just abandoned it or doesn’t have the means to keep it up or pay the taxes, it’s disjointed, and it’s hard to get a piece of property that’s not desirable back on the tax rolls,” he said. “And that is our goal, to put it back on the tax rolls.”
The Tax Commissioner’s Office also said it has had some success with individual properties when neighbors want them.
“You may be interested in that property, if for nothing else than to get it cleaned up so it stops problems at your house,” McCord said.
But more often than not, the cost of acquiring the property is more than even a neighboring property owner wants to bear.
“They’ll say, ‘That’s not worth that to me,’” Tedders said. “And so they don’t” buy it. This means unpaid property taxes continue to accrue, and the properties deteriorate further.
DEMOLITION
There are mixed thoughts on demolition as an answer to dealing with blight.
“Local governments, particularly in a time of recession, are very reluctant to spend their limited dollars demolishing houses, regardless of the common agreement that they are burned, can’t be rehabbed and it’s a threat to the kids on the street,” Alexander said. “They don’t have enough money to do the demolitions.”
He said the Center for Community Progress, which helps governments seeking blight solutions, has some empirical evidence to show a positive return rate on money invested in demolition and cleanup.
“When I first did this with Flint, Michigan, … we borrowed $3 million and spent every bit of that on demolition,” Alexander said. “Over the next 12 months, the properties within 500 feet of the demolished house had increased in property value by an aggregate of $113 million.”
Removing the worst properties, he said, can have an immediate positive benefit on the neighborhood in terms of fewer police and fire calls and a potential bump in value to surrounding property.
Alexander said the key reason governments can’t afford demolition is because the liens for those costs typically are in line behind any other liens on the property. This means unless the owner tries to sell and the property has some value, those costs typically remain unrecovered. But Georgia law allows local governments to give code enforcement liens the same priority as tax delinquency liens, meaning properties can go to a tax auction for unpaid demolition or code enforcement bills.
“I am not aware of local governments in Georgia that are aggressively moving to take advantage of that authority,” Alexander said.
Bibb County’s property tax collection is about 98 percent — one of the best in the state — meaning there are owners paying taxes on blighted properties.
“They will pay the taxes in hopes of not losing the property and in hopes of someone coming along and buying the property,” Tedders said.
There is no way to know if a code enforcement lien would hold the same sway. Demolition costs run about $10,000 while property taxes on a blighted property might be less than a few hundred dollars a year.
“So you’ve got a piece of property that’s got $1,200 in delinquent taxes, the property is only valued at about $30,000 or $40,000 and now you’ve just slapped a $10,000 lien on it,” Tedders said. “So when I start the sale, I have to start the bid at $11,200 plus levy costs … for a piece of vacant land.”
CONSENSUS
The one common thread to all of the ongoing efforts to deal with vacant, abandoned and blighted properties is to concentrate those efforts on larger areas.
“If you can get a street or a neighborhood and take the blighted properties out of it, then you have an opportunity for redevelopment. It should be more desirable to somebody than a single lot that’s next door to another blighted house,” said Tom Buttram, who oversees the Macon-Bibb County Department of Business and Development Services. “And that is going to be part of our focus. … Let’s find a way to get a pocket somewhere where everyone agrees is the worst and see what we can do.
“The key is finding someone who wants it on the back end,” Buttram said. “If there is not a willing taker, then we’re either spinning our wheels or we’re going to sit with a lot of vacant lots for a long time.”
The Macon-Bibb Land Bank employs this approach as it acquires land, which happens through donations, tax sales and purchases.
“We made a strategic decision not to just take anything that anybody wants,” Goldey said. “What we want to do is go out there and make a difference. And one important thing with the way we operate is critical mass. To get one property over here on this street that somebody doesn’t want and to go five streets over and get another piece of property over here that somebody doesn’t want, we probably can’t turn it over to a developer. Who is going to be interested in it?”
Since its inception in 1997, the Macon-Bibb Land Bank has acquired more than 450 properties and put 80 percent of those back into a productive use. This includes a number of parcels in Beall’s Hill.
“We’ve acquired over 100 properties in that neighborhood,” Goldey said. “We’ve been there since about 2000. I know the neighborhood like the back of my hand, every street, every house, every structure.”
She said land banks in other states will take any donated property, but money is an issue. The local land bank operates as an independent authority but receives all of its funding locally.
“We have a limited amount of funding, and if we started acquiring all of these properties and holding thousands of properties, where is the funding going to come from?” Goldey asked. “We still have to keep the properties up to code. We still have to cut the grass. We have to pay the insurance. So you’re kind of shifting that over to the taxpayer now. So I try when I look at a piece of property to say, ‘OK, what is the highest and best use for that property?’”
To contact Debbie Blankenship, call 301-5770 or email [email protected].
