Several of the nation’s largest banks are paying for the demolition of foreclosed homes — as much as $7,500 a house. As the housing crisis continues, the ongoing expenses of upkeep, taxes, code violations, and marketing the properties have saddled banks with a heavy burden, so it often has become cheaper to knock down decaying homes no one wants, reports The Washington Post
The homes are unsalvageable, and the demolitions in some cases have paved the way for community gardens, church additions, and parking lots, advocates say.
The demolition trend’s roots are in Cleveland, where the Cuyahoga County Land Reutilization Corp. grew out of a 2009 state law aimed at creating “land banks.” It has been granted the power and money to acquire unwanted properties and put them to better use or tear them down.
Gus Frangos, the Cuyahoga land bank’s president, said Bank of America, J.P. Morgan Chase, and several other banks make regular donations to the land bank.
Other states with their own foreclosure epidemics are taking notice. New York passed a comparable measure this summer. Similar legislation is in the works in Georgia, Philadelphia, and elsewhere.
Some of these dilapidated homes have been sold for pennies to churches or hospitals. Others are being redeveloped into rental properties, rehabbed for future sales, or turned into community gardens.
Even when there’s no immediate use, the razed lots are one less eyesore that help improve the value of neighboring properties.
Tyler Smith, an assistant vice president at Wells Fargo, which donated 300 properties nationwide last year and is on track for about 1,000 this year, told the Washington Post, “It feels great that we’re able to help nonprofits, help neighborhoods, help families. But we certainly have to have the piece that shows it makes business sense.”
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