Empty Homes Network

The Empty Homes Network has returned from Chicago, having thoroughly enjoyed the National Conference highlighting vacancy, abandonment and derelict properties right across the US, hosted by the Center for Community Progress.

The huge, three-day event was attended by over 1000 delegates from all walks of life and professional backgrounds. From ‘code’ enforcement officers, housing specialists and government employees at local and state level, through to philanthropists, community leaders and those who live within the heart of communities positively affected by the return to use of vacant properties.

A wide variety of sessions covered the packed schedule, ranging from community engagement, financial support and incentives through to tackling the race-divide in housing policy across US cities, the event as a whole was incredibly interesting, and not least thought provoking when considering the holistic issues effecting communities and society in America as whole.

How bad is the problem in the US?

Reports suggest there is something in the region of 16m homes lying empty and vacant across the US, based on national census data. An eye-opening figure to say the least, the numbers look even more shocking when considering the vacancy rates across some states reach as high as 23% of all dwellings. During one session, a speaker highlighted a town in Illinois where 26.5% of all houses currently sit empty.

Coupled with this, an increasing rate of homelessness suggest there are somewhere in the region of 326,000 people currently without a home across the country, meaning there are roughly 49 houses sat empty for every homeless person.

What are the major differences between the approach in the US compared to the UK?

After attending one or two of the sessions on the first day, it was quite clear that whilst the numbers may appear drastically different to those in the UK, the approach, passion and willingness to tackle and resolve issues at local level were the same. First though, was to understand and compare the terminology used….

Foreclosure (repossession), Imminent Domain (compulsory purchase), Red Lining (A process whereby banks would segregate areas of cities based on the risk associated with mortgaging properties), Land Banking (A mechanism for local authorities to take over properties that wouldn’t sell after foreclosure), Ghost/Zombie Properties (empty homes) Leans (Charges on a property) and Heir Properties (Probate Cases) to name a few.

There are also the huge difference in the legal process when it comes to local and national policy. In the US, State Law sets the tone and parameters for the local authority, and as long as those parameters are kept within, Council’s are afforded the opportunity to invest, innovate and create programmes to suit their local needs. Federal (national) policy, doesn’t tend to govern local authority or state programmes, so therefore the ability to innovate and implement on a national scale is limited.

The financial capabilities, offers and funding made available by state and local government, are astronomical by UK standards. Millions upon millions of dollars are ringfenced for vacant property work and community building, with the Mayor of Chicago opening the Conference by outlining their previous year’s investment of $30m to tackle vacancy, abandonment and community building, in Chicago alone.

The US also adopt a large land banking programme, which supports the local authorities in returning properties to use. Not in the same way that housebuilders ‘land bank’ in the UK, in the US, the term Land Banking is used where an organisation takes on the ownership of an empty property in partnership with a local authority, having been foreclosed due to mortgage or tax deficiencies (non-payment), and subsequently left unsold through public auction. Over 250 Land Bank organisations operate across the US, and provide a sustainable vehicle for returning thousands of properties back into use across the country.

The prominent and evident difference of the conference however, was the involvement of local communities, spearheaded by community groups and leaders, to take on the issue of vacant properties, and see them brought back into use, developed, or demolished and used for community benefit.

However their involvement is key for a number of reasons. After foreclosing on a property and regaining ownership banks are not legally bound to maintain a property, and therefore many houses are left to rot and deteriorate without recourse or consequence. Added to this, the housing market (especially since 2007), has continued to remain incredibly fragile meaning that huge amounts of negative equity, and property values mean that houses simply go unsold.

What other issues affect the ability to tackle empty homes?

Predominantly, the housing market, house values and equity within properties, make for a turbulent pot when attempting to deal with vacant and derelict homes. Whilst we have similar issues in the UK, it is more evident in the extreme in the US. For example, you could buy a property for $25,000, and spend $50,000 to get it up to a habitable standard. The property would subsequently be worth on $35,000 due to the market forces and area you’re in. Conversely, why would a bank want to spend $10,000 on demolishing a property that they’re owned $25,000 on, for the plot of land then to be next to worthless? A hugely complex and difficult scenario to tackle.

Added to this, the American population can be incredibly transient and amenable when it comes to moving around the country to live, and find work. For instance, Detroit has seen a significant drop in recent decades in its population and was once a thriving town with industry at its heart. Ultimately, a place without people inevitably leads to vacancy, abandonment, and a fall in the desirability to reside in an area.

What did we learn?

Primarily, that within the context of housing, the differences between the US and the UK in ownership, coupled with an often transient population, that communities that surround empty homes who remain in situ, play an enormous part in their return to use and the overall betterment of the areas they call home. Whilst it may not be replicable to such an extent in the UK, there are definitely lessons to be learned in terms of gaining support, involvement and opinion, from those who live with empty homes around them.

The financial capabilities and programmes of financial support for local government in the US are huge in some areas. However, by comparison, so are their numbers of empty homes. The economy, jobs, housing market and political landscape, all play a huge part in the rise or fall of empty homes numbers, and makes for a fascinating insight into how the country as a whole functions, often quite differently to ours.

Are there any approaches we could replicate for use in the UK?

Comparatively, the US and the UK appear to be on the same path when it comes to their approaches and processes when tackling empty homes, with both countries seeing it as a significant problem within the overall housing agenda. However, despite the differences in economics, politics and legal processes, there could be some areas where we could benefit from adapting their models and ideas.

Land banking as a process, would be incredibly hard to replicate in the UK because of the comparatively strong housing market. In most empty home cases in the UK, a property has an owner, the owner holds money in the property as equity or cash, and that money can be realised through selling, renting or leasing. Land Banking effectively takes a property that is worth nothing, and where nobody is willing to purchase or take on the property, uses it for the benefit of local people and organisations. Whilst this may not work for private, individual owners because of the cash or equity held in a property, there could be the potential to use a similar model for publicly owned property, such as those owned by the NHS, emergency services and armed forces. This is something that the Network will continue to explore.

On a national level in terms of the UK, a comprehensive and sustainable financial model to support empty homes work is significantly lacking. Whilst those who lead the portfolio of housing for central government has changed almost annually in recent years, a significant period of sustained exposure and campaigning on the issue from the government would go a significant way in setting the tone and message, that vacancy and abandoned property in this country simply cannot be tolerated or continued. Against a backdrop of slow house building, and only a limited amount of land on which to build (something else the US has in abundance), we have to promote the use (and re-use) of what is currently there, and do all we can to make the best use of it.

Resources

A select few of the presentations from the RVP Conference 2022 have been made available in the information library of the Empty Homes Network website here.