The city housing department has signed an agreement to use nearly $10 million from a national foreclosure abuse settlement to demolish 578 mostly derelict buildings and houses in 10 Baltimore communities, in some cases relocating homeowners and renters so entire blocks can be razed.
The city’s Board of Estimates gave its approval to the agreement Wednesday. Housing officials did not respond to questions about when the demolitions would begin.
The demolitions will be funded with a part of a $25 billion national settlement reached by 49 state attorneys generals in February 2012 with the five largest mortgage lenders — Bank of America, JPMorgan Chase, Wells Fargo, Citigroup and Ally Financial.
The funds are part of Maryland’s share of the settlement, $895 million.
Under the plan, $9.25 million in settlement funds will be used to demolish the vacant and blighted housing and relocate owners and tenants. The remaining funds, $750,000, will be directed to an existing city homebuyer’s assistance program to aid in purchasing of previously vacant, now renovated, properties.
The demolitions will be a part of the city’s Vacants to Value program and will include several city communities, including Oliver, Milton, Harlem Park and Greenmount West.
The Vacants to Value program is a key initiative of Mayor Stephanie Rawlings-Blake to winnow down some of the 16,000 vacant houses and buildings that are scattered throughout most of the neighborhoods of Baltimore, in part by selling some of the structures to investors and developers and through demolition.
The use of the foreclosure abuse settlement funds for demolitions has raised criticism from some local housing advocates.
On Aug. 1, Marceline White, executive director of the Maryland Consumer Rights Coalition, wrote a letter to city Housing Commissioner Paul T. Graziano “encouraging” him to use part of the $10 million in settlement funds to help struggling homeowners in Baltimore avoid foreclosure.
“Since 2008, Baltimore city families have received 89,903 notices of intent to foreclose on their homes,” the letter said. “Moreover, in 2013 alone, foreclosure filings in Baltimore to date already total 2,533, which means the annual total for this year is likely to exceed the 2012 total of 2,793.
“Yet the $10 million plan that was submitted and approved for Baltimore city’s use of mortgage settlement funds does not contain solutions that will enable current homeowners to stay in their homes.”
White said Tuesday that she had not received a reply from Graziano. The letter was also signed by several other groups, including AARP Maryland, Associated Black Charities, Baltimore Jewish Council and Baltimore Neighborhoods Inc.
The mayor defended the expenditure of the settlement funds for the demolitions.
“We were very diligent to make sure that with the settlement funds all of the areas that are allowable are covered,” Rawlings-Blake said Wednesday, citing “neighborhood stabilization” as one of the acceptable expenditures of the funds.
The mayor said her administration had committed to rehab or demolish a total of 3,000 vacant homes over the next decade.
Cheron Porter, a spokeswoman for the city housing agency, said in a statement that the costs were justified from the settlement funds to help stabilize some of the city’s neighborhoods.
“Vacant and abandoned properties resulting from the mortgage foreclosure crisis in Baltimore add to thousands of pre-existing vacancies that already blight our city,” the statement said.
“The majority of vacant properties in the city are in severely distressed areas where there is insufficient demand to support rehabilitation. Large-scale demolition of these buildings is the only way to address deeply imbedded blight, improve health and safety for residents, advance the real estate markets of these neighborhoods and to create possibilities to repurpose land in ways that better serve the city’s plan for growth.”