The Costs of Demolition

Below is a statement that several of us prepared regarding the economic, environmental, and social costs of demolition vs. rehab. The pdf is here, which includes references.

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Vacant houses and abandoned land are problems for Durham, associated with crime, fire, illegal dumping, and reinforcement of the notion that people do not care about their neighborhood. The reasons for vacant and abandoned property are economic; poverty and a lack of jobs drive the process of disinvestment.

Destroying houses does not cure poverty or provide sustainable employment. We need solutions that
revitalize our community without tearing it down.

Of the 349 buildings that have entered the NIS process since 2004, 195 have been demolished, while only 44 have been repaired – a 15% rehabilitation success rate. Very conservatively, if each of those buildings had an assessed value of $10,000, this represents a loss of nearly $2 million from our tax base without accounting for any other costs.

Why does demolition make things worse? It creates a downward spiral:
Demolition = lower property values = further disinvestment = more vacancy=Demolition
Why rehabilitate rather than demolish?

Economic
• $1 million spent on rehabilitation of an older structure creates 41.4 jobs, versus 35.9 for new
construction. $1 million spent of rehabilitation adds $801,000 to NC household income vs. $721,000 for new construction.
• In one study, $42,000 of housing rehabilitation by local government resulted in a net gain to the public sector of $59,000. Reoccupation alone cost $18,515. Demolition cost $24,426.
• A study of property values in an area of older homes showed that demolition of a vacant house
dropped property values in the same block by $1300. Reoccupation as-is dropped property values by $1191. Rehabilitation stabilized property values.
• Neighborhood poverty is a stronger predictor of housing abandonment (odds of 7.3 to 1) than an
unsafe building code violation (6.9 to 1).
• Predictors of Abandonment: Adjacent property has been demolished – 2.3 to 1
Concentration of demolished properties within 1⁄4 mile- 2.4 to 1
Adjacent property has been cleaned and sealed – 0.76 to 1 (lowered).
• The federal and state government will give us $400 for every $1000 we spend on fixing up a historic property for rental or business, and $300 for every $1000 we spend for fixing up a historic property for a residence. For commercial buildings, combining these with “New Market Tax Credits” pulls more federal money into our community. Every time we tear down a historic property, we are throwing this money away.
• Citizens of Durham have gotten $12 million from the federal and state governments by fixing up
historic houses. This means, at a minimum, $12 million has been added to our tax base from these
funds.

Crime
• Vacant buildings are associated with crime. No evidence suggests that when buildings are torn down, criminals do not simply move to another spot in the neighborhood. A study of demolition in East Durham suggests that crime increases in other areas of the neighborhood when concentrations of buildings are demolished.

Health and the Environment
• Housing demolition is not sustainable development.
• Each demolished house sends tons of material to the landfill.
• Replacing a house rather than renovating requires more raw materials be mined, cut, and extracted to replace those sent to a landfill.
• While older houses may have dangerous material such as lead-based paint that must be addressed in renovation, demolishing these houses puts millions of tiny lead paint particles into the air, soil, and water of our community.6
• Vacant buildings and land discourage social interaction and healthy behavior, such as physical
activity.78, Reduced physical activity can worsen obesity, heart disease, blood pressure, and diabetes.

Cultural
• The city has not assessed which important community leaders grew up in houses they demolish, or
what cultural events may have occurred in houses they demolish.
• The federal government has deemed houses in historic districts an important, national cultural
resource.
• When the city uses federal money in neighborhoods, it is supposed to minimize harm to this resource. Failing to do so can result in loss of federal funds to the city.
• Our buildings provide a link to our history - we can point to where our grandmother lived, where our parents went to school, where our community leaders rallied, and teach our children about where we have come from.

Vision
We need safe, healthy, vibrant neighborhoods that provide access to jobs, services, and affordable housing for all residents of Durham. Tearing down our community does not revitalize it; this strategy did not work for urban renewal in the 1960s, and it doesn’t work now.

Steps
1. NIS should consult up-front with organizations that can provide information about historical
significance, the economic loss from demolition versus rehabilitation, the environmental effects of demolition, and the realistic development potential for a vacant lot.
2. Demolition should be reserved for burned-out, collapsed structures that have no renovation potential.
3. Order owners to repair property; if they do not comply, the city can repair and place a lien for the cost
of repair on the property. If this lien is not paid, foreclosure can recoup the cost of repair.
4. Proactive rental inspections, coupled with rehabilitation strategies, are the most effective use of code
enforcement strategies – to prevent neighborhoods from deteriorating.
5. Because rehabilitation provides more jobs than new construction, city job training programs should work to link repair and employment so that these jobs go to the neighborhood.
6. The city should work with the state delegation to pursue better tools to implement rehabilitation strategies, such as vacant property receivership.

Immediate Action

Immediate and ongoing meetings between NIS and community stakeholders are necessary to
determine which structures warrant immediate demolition (i.e., irretrievably burned, collapsed) and which structures warrant further study. We request an ongoing demolition pause of 4-6 months for these structures to allow time to create a truly open dialogue between NIS and the community, such that all community members and appropriate city departments are involved in neighborhood planning. Proceeding with demolition before this can occur risks hurting the economic viability of our neighborhoods and the loss of ties to our irreplaceable history and culture.