Explaining the Cycle of Systemic Vacancy

You’ve probably seen an abandoned house or two in your neighborhood. Every community has a few vacant properties, and they aren’t always harmful to their neighbors. But some places have many vacant and abandoned properties. These empty structures and lots remain for years, deteriorating in condition, weakening the housing market, driving residents out of the neighborhood, and fueling more vacancy. These vacant, abandoned, and deteriorated properties, sometimes called “blighted” properties, become so widespread that doing anything about them at scale feels extremely difficult. Why? When property vacancy becomes so bad that it completely changes how a neighborhood looks and feels, that neighborhood becomes trapped in the harmful cycle of “systemic vacancy.”

What is Systemic Vacancy?

Systemic vacancy is the community experience of widespread property vacancy caused by the combined actions of people, policies, and processes. The cycle of systemic vacancy can be broken down into four main parts that work together to perpetuate the cycle: equity challenges, triggers, market shifts, and the impact of increased vacancy on the community.

Equity Challenges

Systemic racism is a root cause of systemic vacancy. Decades of discriminatory lending practices, unjust land use, and disinvestment continue to fuel intergenerational poverty, leading to Black and Brown communities having a disproportionate number of vacant properties.

Racial inequity in city planning and zoning has historically been a weapon of segregation. Zoning ordinances in the early part of the 20^th century institutionalized segregation by preventing Black people from occupying residences on majority-white blocks. After the Supreme Court ban of this practice in Buchanan v. Warley (1917), private racial covenants and redlining policies quickly replaced them. Today, formerly redlined census tracts often have a higher percentage of low-income and impoverished residents, and a higher number and percentage of vacant and abandoned properties.

And these racist policies and practices have persisted. Predatory lending in the leadup to the 2008 mortgage crisis overwhelmingly targeted Black and Brown people who were promised that homeownership was the ticket to building generational wealth. Taken together, these inequitable practices trapped Black and Brown people in disinvested neighborhoods that grew more impoverished and increasingly abandoned.

Triggers

Communities experiencing poverty and equity challenges are more vulnerable to the triggers of systemic vacancy. This is often the case in smaller, low-income, and rural communities that teeter on the knife’s edge of economic booms and bust. A town dominated by a single factory or industry with a significant population of blue-collar workers is incredibly vulnerable to national and global economic and manufacturing shifts: residents would face limited job options if that employer withdrew or shut down.

The global financial crisis in 2008 was also a major trigger for many communities. When the housing bubble burst, many homes were suddenly worth much, much less than what people owed on them. More than half of properties bought on those subprime loans provided by Wells Fargo between 2005 to 2008, for example, were subject to foreclosure. Seventy-one percent of those were in predominately Black neighborhoods. Many people lost their jobs, couldn’t pay their mortgages, and lost their homes. Empty houses piled up, especially in low-income neighborhoods experiencing equity challenges.

Market Shifts

As more homes go into foreclosure, the number of vacant properties grows, the value of the remaining occupied properties declines, and the housing market becomes less desirable. No one wants to buy houses that are underwater with debt or surrounded by other dilapidated properties. The residents who stay find it harder to make ends meet, maintain their properties, and pay their property taxes and mortgages. Public services suffer, and the neighborhood becomes less vibrant. As a result, more people move out and fewer move in.

Impact of Increased Vacancy on the Community

Residents of neighborhoods trapped in the cycle of vacancy experience harms to their health, wealth, and community fiscal stability.

For communities that already struggle to access adequate healthcare, living in substandard housing can significantly impact physical health. Poorly maintained and deteriorating homes can also expose families to dangerous toxins such as mold, lead, and asbestos, increasing the risk for asthma, cardiovascular disease, learning disabilities, and overall poor health outcomes.

Beyond physical health, being surrounded by boarded up properties, trash, and overgrown yards takes a toll on mental health. In neighborhoods with visible evidence of vacancy and disinvestment, residents are at a greater risk of depression, stress, and elevated rates of intentional injury. Disinvested neighborhoods also experience increased violence and gun-related crimes.

Vacant and abandoned properties also impact individual and communal financial health. Widespread property vacancy and abandonment destabilizes individual wealth by reducing the value of surrounding properties and expanding the financial liabilities of homeowners (like higher insurance premiums). As property values decline, so do property taxes, which means less tax revenue available for local governments to use for vital public services like schools and community parks. Meanwhile, local governments lose revenue because they take on the costs of addressing vacant properties, like boarding up or demolishing vacant structures and mowing overgrown vacant lots.

Conclusion

Systemic vacancy doesn’t happen overnight, and neither do the solutions. However, there is hope for state and local governments looking to revitalize their communities. Policymakers can reform laws around delinquent property tax enforcement to keep people from losing their homes and to ensure vacant and abandoned properties can swiftly be transferred to new, responsible owners. They can change code enforcement practices to focus on helping property owners bring their properties into compliance, rather than simply collecting fines. And they can practice vacant land stewardship and enable residents to creatively reclaim vacant spaces. By reforming inequitable systems that aren’t working and implementing efficient and effective tools to address problem properties, vacant and abandoned properties can transform from liabilities to assets, and neighborhoods can finally break free of the cycle of systemic vacancy.

If you’re struggling with vacant, abandoned, and deteriorated properties in your community, check out our free online resources, webinars, and publications. The Center for Community Progress also provides customized, expert guidance to state and local governments to assess the state of vacancy in your community and recommend policy and practice solutions for equitable neighborhood revitalization. Contact us at [email protected] to learn more!