Safely Demolishing Vacant Buildings and Recovering Municipal Costs

IN THIS SECTION

• Best Practices for Demolishing Vacant, Abandoned, and Deteriorated Properties
• Recovering Municipal Demolition Costs

Before bringing in the heavy machinery, local governments should determine what demolition principles matter most for their community. Demolition can be done fast, well, or cheaply, but not all three. Deciding what matters most upfront shapes every practical decision that follows.

Consider dust suppression: “Wet-wet-wet demolition”—spraying the building before, during, and after demolition—significantly reduces airborne particles that may contain lead or trigger asthma. Deconstruction achieves a similar benefit. However, both approaches add time and cost. A community whose top priority is clearing as many properties as quickly and cheaply as possible will find these practices in direct tension with that goal.

Once a community has decided which properties to demolish, how to prioritize them, and what principles will guide the work, it can design its demolition practices accordingly. The rest of this section covers the key nuts-and-bolts issues that add up to an effective demolition program. The more demolitions a community undertakes—or plans to—the more important it is to have systems that stretch every demolition dollar and ensure the work delivers the greatest possible benefit to residents and neighborhoods.

EPA’s Large-Scale Residential Demolition site has a number of resources related to controlling contaminants during demolition and examples of demolition practices. It also provides a detailed Residential Demolition Bid Specification Development Tool.

HUD’s Resource Exchange’s Demolition Toolkit, which Community Progress helped produce, has a number of useful resources including: a Sample RFP for Demolition Contractors, detailed and basic versions of HUD, NSP, and the Demolition Process, and an Example Survey Form for Demolition Site Inspection. While these tools were developed for the Neighborhood Stabilization Program and no longer exist on HUD’s website, many of the tools are applicable outside of that program.

The Annie E. Casey Foundation and Johns Hopkins University outlined good demolition practices following a study they conducted on lead exposure and demolition in Baltimore.

Best Practices for Demolishing Vacant, Abandoned, and Deteriorated Properties

Have systems, documents, and specifications ready to go at all times.

Minimizing turnaround time for bids, contracts, and permits is essential to running an efficient demolition program. Communities should maintain a “default spec” for each type of demolition, with clearly defined alternative specs available for specific situations.

Ensure demolition capacity is in place.

Most municipalities contract out demolition work, but some have found that building in-house capacity—particularly where staff with strong supervision skills are available—is cost-effective. Where contracting out, municipalities should maintain pre-qualified pools of demolition contractors that include both large and small firms. Including smaller contractors creates opportunities for locally based, minority-, and women-owned businesses, and increases capacity for single-family demolitions. Bids should generally be invited on a rotating basis from within the pool, and firms should be monitored closely—those that repeatedly decline to bid or fail to deliver timely, quality work should be removed. The pool should be reopened to new firms regularly.

Build efficient legal systems for demolition approval and cost recovery.

Many buildings that municipalities demolish are privately owned, so having a clear, efficient process for obtaining demolition authority is critical. Requirements vary by state: some require a court order, while others allow administrative action. Illinois, for example, permits municipalities to demolish buildings of three stories or less deemed a “continuing hazard” without a court order, provided proper notice is given to owners and interested parties. Municipalities should also prepare in advance to recover demolition costs from property owners wherever possible.

Address material disposal responsibly.

Dealing with demolition debris is both a major expense and a significant environmental burden. Municipalities should weigh the tradeoffs between landfill disposal, material recycling, and deconstruction to find the most cost-effective and environmentally sound approach for their context. Tipping fees and recycling regulations vary widely, so the right balance will differ by community. This is also an opportunity to advocate for state or local policy changes that incentivize more sustainable practices.

Leave every demolition site ready for what comes next.

Demolition specs should require contractors to leave sites in a condition that won’t harm surrounding properties and is suitable for likely future reuse. This means proper grading, removal of driveways, aprons, and foundations or basements, and appropriate site treatment—ranging from low-maintenance native ground cover to fencing or rain gardens, depending on the neighborhood context and timeline for reuse. Building site treatment into the original demolition contract is more efficient and cost-effective than returning later under a separate contract.

Recovering Municipal Demolition Costs

In most cases, communities demolish properties not by choice, but because private owners have failed to uphold their basic property maintenance responsibilities. Whether the building is still privately owned or has passed to the local government through tax foreclosure, the original owner may bear legal responsibility for demolition costs. Where a property has been abandoned in the context of a mortgage foreclosure, a strong argument exists that the foreclosing entity—regardless of whether title has transferred—should share that responsibility.

In practice, however, assigning legal responsibility and actually collecting are two very different things. Some owners lack resources while others are hard to find. But poor cost-recovery also stems from inadequate legal tools or local governments’ failure to fully use the tools they already have. The following are two common strategies for recovering public costs spent on demolition.

Placing Liens on Properties

Most states allow municipalities to bill property owners for demolition costs. If unpaid, the municipality can place a lien on the property. In practice, these liens rarely result in meaningful cost recovery. To be effective, state law should designate demolition liens as super-priority liens, either added to outstanding taxes or subject to independent foreclosure, and should allow lien amounts to include not just demolition costs but also the indirect costs of inspections, legal fees, and notice.

Local officials should review their state’s nuisance and demolition lien statutes and advocate for stronger provisions where needed. That said, a demolition lien is ultimately a lien on a vacant lot in a weak market and often effectively uncollectable. Exceptions exist and justify maintaining the practice, but they are relatively rare. The more useful value of lien foreclosure authority is that it gives local governments a mechanism to take control of properties and move them toward productive use, rather than leaving them in limbo.

Getting Judgments Against Owners

Many states also allow local governments to obtain a personal judgment against a property owner for demolition costs. Unlike a property lien, a judgment can be used to pursue the owner’s other assets. This is complicated in practice due to the widespread use of LLCs and other ownership vehicles that shield individual owners from liability. The pattern is common enough in disinvested urban markets that local governments should anticipate it and develop alternative strategies accordingly.