Twin Cities urban renewal, bulldozer-style

Ryan Kapaun strolls through his St. Paul neighborhood these days wondering what's going to replace the holes on the blocks where houses used to be.

It's a question on the minds of many in Twin Cities neighborhoods where houses are falling vacant -- and then falling down.

The cities of Minneapolis and St. Paul are tearing through their budgets to tear down buildings that drag down neighborhoods because they're eyesores, safety hazards or crime magnets.

Numbers are growing at an impressive rate, mostly the result of foreclosures and general economic woes. Demolitions in Minneapolis have quadrupled from 2006 to 2008; St. Paul has seen a 16-fold increase in that time.

Residents and neighborhood advocates often feel relief when a nuisance disappears, but now the question is: What happens next with the checkerboard of empty lots?

"It's noticeable for a neighborhood because obviously the house was torn down for a reason," Kapaun said. "Every time you walked by before it was sticking out for a reason, now it's gone and you're reminded what was there and what the potential can be."

"We know that vacant lots are not ideal; there are problems associated with them, but they're very mild problems compared with the cost of a nuisance building," said Henry Reimer, director of inspection services for the city of Minneapolis.

And taxpayers are footing the bill.

Hennepin County lent Minneapolis $1.25 million last year to complete its demolition program. The city is paying back 70 cents on the dollar.

Demolitions over the next 18 months will be covered by $1.7 million from the federal National Stabilization Program (NSP), Reimer said. The goal is to take down 150 Minneapolis properties in that time.

St. Paul ran through its $1.3 million demolition budget in 2008 -- twice the $500,000 budget in 2007 -- and is expecting to spend $1.2 million this year. The Department of Safety and Inspections plans to raze 90 buildings. The city also has designated about $1.2 million from its NSP award to go toward demolitions. The city expects to tear down about 37 properties through that program. There will probably be some overlap between the city and NSP programs.

"Compared to our experience in the last decade it [number of demolitions] looks bad, but compared to 20 or 40 years ago it looks normal," said Judith Martin, urban studies professor at the University of Minnesota.

Jeff Skrenes, housing director for the Hawthorne Area Community Council in north Minneapolis, said the view on demolitions swings from relief to frustration. Neighbors are glad to see problems go, but then when a bunch of vacant lots show up, they grow concerned that affordable housing has disappeared and rebuilding isn't guaranteed.

Officials in both cities say their top priority is getting vacant properties fixed up and reoccupied. About 880 vacant buildings were repaired and reoccupied last year in St. Paul. Minneapolis used its regulatory power to get 140 houses fixed up. (Nearly 840 vacant and boarded houses are registered in Minneapolis. The number in St. Paul has hovered around 1,900 for several months.)

But the reality is that not all properties are worth fixing up. The cities have an older housing stock, and some buildings outlive their useful lives.

Skrenes acknowledges that cities can get more for their money by razing a house instead of rehabbing it. "I don't think they're thinking about the 10- to 20-year effect of these things," he said.

The question city leaders need to ask, he says, is, "Did we use money to make a difference in the community and make things better? Demolitions are a part of that, but I definitely want to see an emphasis on preservation."

While it's critical for neighborhoods to stop the damage of problem properties now, they should consider how to position themselves for renewal when the real estate market improves.

Until then, the vacant lots create challenges -- and opportunities.

"Who maintains those vacant lots until they are developed?" Kapaun said. "What are the long-lasting repercussions for the neighborhood?"

Some lots might become gardens or be split among adjacent properties. Other lots that the cities plan to bank will be ripe for rebuilding, either as single-family homes or larger projects if enough parcels can be put together.

It's unlikely private developers will rebuild on lots in struggling neighborhoods, Skrenes said. That means city subsidies and nonprofits will be the primary way to fill in the gaps.

"There's sensitivity to what kind of development comes next," said Martin, the professor. "And it's an appropriate question."