Housing Complex

Can’t Go Home Again: How a District program to fight blight preserves vacant lots, instead

Pastor William Spence just wants to buy the building next door–but he can't. (Darrow Montgomery)

Pastor William Spence just wants to buy the building next door–but he can't. (Darrow Montgomery)

Near the corner of Sherman Avenue and Girard Street NW, there’s a narrow house with a dilapidated porch and a mailbox with a sign reading “PRAYER BOX.” Every Sunday morning, the interior resounds with a joy that belies the shabby façade.

“We thank you for the future, father!” cries a young man at the front of a small congregation, smiling, swaying back and forth to the beats of an electric keyboard and bass. “We know the best is yet to come, father! No storm can move us, father, no situation can move us, father. No weapon may move us today. For we are planning right here today father. Cover us father, as we are moving ahead right father...”

The churchgoers at Harvest Life Pentecostal Church—grandmothers down to toddlers—are on their feet, dancing between the makeshift pews, throwing in the occasional “Jesus!” The music, the wailing, and the amplified sermon are almost deafening in the tiny space. When the service finally concludes, parishioners sit outside chatting, while Pastor William Spence buzzes around checking in on his flock.

From across the street, the scene stands in stark contrast to the decrepit hulk of a building that shares a wall with the little church, like Jekyll and Hyde. It has no roof, and only gaping holes for windows.  The church has wanted to buy the attached building for a decade to use as a community space—and they almost did, in 2001, when the property went into tax foreclosure. But just when Spence had almost acquired the deed, the District snatched the property up for its new initiative to combat vacant properties.

So much for combat: Seven years later, nothing has been done with the shell of a house, except that the Department of Consumer and Regulatory Affairs declared it blighted last January. It’s drained the Harvest Life congregation, which can’t get a loan to fix up its own half of the building while attached to such a dangerously deteriorating structure. Rats and mold infest the basement, which is now destabilizing the church’s foundation, says Spence.

The monstrosity on Sherman Avenue is perhaps the worst example of the troubled Home Again program, launched in 2002 with the best of intentions. The Department of Housing and Community Development is now phasing Home Again out—but many properties are still stuck in its portfolio, mired in litigation and bureaucracy, sticking neighborhoods with blight that otherwise might have been cleared up long ago. Which is, of course, exactly what the program was set up to avoid.

“One of the thing that just hurt our hearts,” Spence says, “is that there were people in the community that had come to believe that we owned that property. That is what it has done to us.”

The District’s battle with vacant properties—of which there are now officially almost 3,000—goes back to at least 1986, with the founding of the Homestead program. Under this regime, the District bought properties in tax foreclosure and disposed of them through a lottery to lucky homebuyers, who paid $250 each and got $10,000 in “seed money” rehabilitation loans to start construction, along with counseling on the development process. Mayor Anthony Williams’ administration ended the lotteries in 2001, after widespread problems with execution—turns out not every would-be homeowner who’d received a property for almost nothing had the wherewithal to actually develop it.

Home Again was supposed to solve that problem. In 2002, the office of the Deputy Mayor for Planning and Economic Development started going after projects even more aggressively, negotiating friendly sales and taking nuisance buildings by eminent domain if necessary in targeted development areas around the city. The properties would be turned over to pre-qualified developers in “bundles,” priced as low as $1,000 per lot. Developers signed contracts obligating them to develop and market the properties at affordable prices within a set time period, usually around 18 months.

Sometimes, this worked. Non-profit developers like Manna, Inc. and Mi Casa were especially successful in delivering dozens of both market-rate and affordable units. But many of the for-profit developers would “cherry pick” the bundles they were awarded, developing those in neighborhoods that could be sold for higher prices while sitting on the others—and with no consequences for inaction, the development contracts were meaningless.

“Most of the time, when people had a property and something wasn’t happening, they would just ask the District for more time, and the District would give them more time, and that was the way it went,” says Leila Finucane Edmonds, director of the Department of Housing and Community Development. “And a lot of that comes from people complaining; because everyone has a reason why they want more time.”

That’s what happened with Castle Development Corporation, which received the Sherman Avenue building along with properties in Shaw and Deanwood. Spence says work began on the building next to Harvest Life church, but it was incorrectly permitted—and the work crew ruptured a gas line at one point, drenching the neighborhood in fumes—so the developer had to re-start the process. Again and again, the District extended its deadlines, while Castle Development escaped the heavy vacant property taxes imposed on other privately-owned unused land (the company still owes over $17,000 in taxes on the Sherman Avenue house, though). After mid-2008, the company became completely unresponsive; the other lots in the bundle haven’t been touched.

Since last July, the District has been working on “recapturing” the properties—determining that the developer has defaulted on the property’s covenant, transferring title back to DHCD, and clearing up leftover liens, warranties, and taxes. Once that process wraps up, they’ll go back out to bid. And Harvest Life church, which could have developed the house immediately back in 2002, has no better chance of finally acquiring the property than anyone else.

Ward 1 Councilmember Jim Graham sits on the committee that oversees the Home Again program, and sighs in frustration over the many properties in Ward 1 with similar problems. In his office, he pulls out stacks of files documenting each one—some bogged down in financing issues, others completed with construction problems that later had to be remediated.

“There has been, how do you say this, ineptitude, in terms of the bureaucratic performance,” Graham says. “I wouldn’t say that about the current leadership, but some of the prior leadership and staff has not quite been up to the task.”

After the Fenty administration arrived in 2007, the whole vacant property program underwent a reshuffling. The Home Again and leftover Homestead properties were transferred to DHCD under a new Property Acquisition and Development Division, with consolidated powers and more flexible rules for disposition and affordability. Home Again no longer exists as such; while bundles are sometimes still sold to developers directly, the new favored way of getting properties back into circulation is to auction them off and require buyers to rehab them within 18 months.

Edmonds and PADD Manager Martine Combal say they’re more aggressive with communication and enforcement than their predecessors, and more realistic about a developer’s ability to deliver.

“In real estate, location is very important,” Edmonds says. “Whoever comes to develop a property, there are some things that are feasible, and there are some things that are not.”

“And that’s our job to assess before we put together a disposition method,” Combal continues. “We need to be aware up front what those conditions are and what’s feasible.”

Meanwhile, though, the scars of the old regime live on in many neighborhoods. Of the 262 properties in the Home Again portfolio, only 53 have been finished and sold to homebuyers; the rest are in various stages of disposition, development, and recapture.

Sometimes, concerted community action can push them through the process—in Mount Vernon Square, neighbors got Councilmembers Jack Evans of Ward 2 and Tommy Wells of Ward 6 to pass legislation transferring title to a developer who wanted to build new houses on the lot. But in the same neighborhood, a Home Again house on Ridge Street that collapsed in 2007 is still a fenced-in mess, listed on PADD’s report as “awaiting title clearance.” Another, at 454 N St. NW, is just a backless façade.

“What I find sad about the situation is I’ve watched in the 6 years I’ve lived in the neighborhood is that every other property on that block has been purchased and renovated,” says Cary Silverman, president of the Mount Vernon Square Neighborhood Association. “They’re all owned now, and they look great, and this one is still sitting there.”

Back up on Sherman Avenue after church, the woman everyone knows as Ma Bowie—she’s lived in an apartment in Harvest Life’s building ever since her husband started the church in 1983—chats with Ethel Price Gresham, who arrived in the neighborhood a few years ago and was drawn to the friendly congregation. Predominantly, the ladies are just confused as to what’s taking the District so long to deal with the nightmare next door.

“I’ve never seen them allow a structure to fall down like they have,” says Gresham. “That’s what puzzles us. With all the laws and the guidelines that the city has, how does this keep falling through the cracks?”      CP

Visit the Housing Complex blog every day at washingtoncitypaper.com/blogs/housingcomplex. Got a real-estate tip? Send suggestions to ldepillis@washingtoncitypaper.com. Or call (202) 332-2100, x 224.

  • rt

    Just SELL them to the highest bidder! DC gov has a thing against basic solutions that don't involve public "affordable" housing or subsidizing developers. Plenty of people will buy this at auction and fix it up within a reasonable timeframe.

  • http://urbanplacesandspaces.blogspot.com Richard Layman

    While I might not always agree on your take on things, I like your nose for what's really important, what should be news, even if it mostly isn't being covered anywhere else.

  • Lydia DePillis

    Richard: Thanks I guess!

  • http://twitter.com/monkeyrotica monkeyrotica

    Sad state of affairs when demolition-by-neglect is a more cost-effective and prompt "solution" to urban redevelopment.

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  • The Commish

    I feel the pain of the city over this isssue. The first thing I did in my SMD when I was elected was to corner Mayor Fenty at a Fix-It program. I pointed out that these houses he was cleaning up were owned by the city, and I expected that the city would get these up on the auction block ASAP. I can tell you that all of them went to auction last year. Over and over I see that the city is a mess with this issue. Take them all my eminent domain, auction them off to the highest bidder with the 18 mos timeline of the C of O, and if they don't complete it, you take the property back and auction it again, and notify the developer of breach of contract and be done. this was done in boston back in the 70's in South End and now those properties go for well over a million dollars. So Fenty get the stick out and get these on the block. If there are legal issues take them my eminent domain and be done with it. TRUST ME it's not that difficult. Forget the developers and get these in the hands of people who will finish the rehabs and move in.

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