Years after the recession rocked some Minneapolis neighborhoods with foreclosures, the city owns hundreds of vacant lots — and pays thousands of dollars a month to keep them tidy.

About 400 of the 500 lots are on the North Side, according to the city’s department of Community Planning and Economic Development (CPED). The city acquired most of them relatively recently, often after they fell into tax forfeiture, but some of the lots have been empty since the late 1960s.

The pileup of empty properties on the North Side has reached such an extreme that the city is offering financial incentives to build new houses on vacant residential lots there. If the program succeeds, it would add properties back to the tax rolls, cut city maintenance expenses and spruce up some neighborhoods that have languished while the rest of the city has recovered.

“The foreclosure crisis hurt, and then the tornado just really was the cherry on top,” said Council Member Blong Yang, who represents north Minneapolis’ Fifth Ward. “It just made it that much worse for a lot of properties.”

The pilot program launched in February offers developers up to $75,000 and individuals up to $25,000 to build a new house on a North Side vacant lot. And there have been some early takers.

Bruce Barron, a developer who moved to the area in 2009 and is one of the first participants in the pilot program, doesn’t see the hundreds of vacant lots as a crisis. Instead, he sees an opportunity to build better housing stock and revitalize the area.

“The best thing that happened to the area was foreclosure,” he said.

Empty for years

Some lots Minneapolis acquires have a building — a boarded-up house, for example — that gets torn down. Some are lots Hennepin County seized through tax forfeiture.

Once the city owns a lot, it’s responsible for taking care of it. On average, the city pays vendors $82 a month to maintain one property, whether it’s mowing the grass, shoveling snow or removing garbage.

“If we have too many of them, it’s a challenge,” said Council Member Barb Johnson, who represents north Minneapolis’ Fourth Ward. “I think maintenance perhaps is the most concerning thing for neighbors.”

Vacant lots can go decades without being developed. Some in the city’s current portfolio were acquired in 1968.

Minneapolis markets vacant lots after acquiring them, but there’s not always immediate interest. The city tries to drum up buyers using an online map with instructions for purchasing properties, requests for proposals and announcements of development opportunities. In the meantime, lots can be used temporarily as community gardens.

The city acquired the lot behind Liz Pushing’s house in the Beltrami neighborhood in Northeast in 1988. Since she moved in nearly two decades ago, Pushing said, it’s never been more than a patch of grass where people occasionally loiter or dump garbage.

Pushing said she’s heard plans ranging from a dog park to multifamily housing, but in 18 years, “it hasn’t changed one bit.” Last week, CPED put out a call for residential development proposals there.

The First Ward, which encompasses most of northeast Minneapolis, courted affordable housing projects to fill vacant lots at a time when there wasn’t much demand for them, said Council Member Kevin Reich. Some of those redevelopment projects helped spur others in the neighborhood, he said.

These days, there’s more demand than there are vacancies to fill. The larger challenge, he said, is making sure new development works for the community.

In the First Ward, the city owns just 10 buildable vacant lots, CPED data show. In southwest Minneapolis, where housing prices are high and neighborhoods are dealing with teardowns, there are none.

“I have no concern about the market’s ability to do something,” Reich said. “We just kind of want to mold that something to our ends.”

Extra hurdles

Building on a city-owned lot requires public input and an agreement that provides a timeline for building. Barron, the developer, said turning an empty space into a house is worth the hassle.

Driving around north Minneapolis in his red pickup truck, he pointed out old houses in need of renovation or clusters of overgrown vacant lots. “I know what you could do with that,” he said.

Barron has his eye on a few vacant lots around the North Side — and high hopes for what new houses priced for first-time buyers could bring to this stigmatized part of town.

“That’s the challenge here,” he said. “You have to be able to come and see and will it.”