The Rust Belt: A forgotten housing crisis

updated 4:07 p.m. ET May 4, 2009

CINCINNATI - Meet the forgotten housing crisis.

While most attention has focused on the wave of foreclosures sweeping mostly middle-class, suburban Sunbelt neighborhoods from California to Florida, the nation's emptiest neighborhoods have remained concentrated in the same place for nearly a generation: the mostly minority, poor, urban neighborhoods of the American Rust Belt.

An analysis by The Associated Press, based on data collected by the U.S. Postal Service and the Housing and Urban Development Department, shows the emptiest neighborhoods are clustered in places hit hard during the recession of the 1980s — cities such as Flint, Mich.; Columbus, Ohio; Buffalo, N.Y.; and Indianapolis.

"I'd move in a heartbeat if I had somewhere to go right now," said Cindy Olejniczak of Buffalo, raking trash from the lawn of a boarded-up house to keep it from blowing in her yard. Roughly every third home in her neighborhood is vacant. Not even pizzerias will deliver to the area now.

"It's almost like you wish they would just level the whole neighborhood," she said, "and start rebuilding again from scratch."

Federal lawmakers have designated nearly $6 billion over the past year for local governments to do just that — buy and either rehabilitate or demolish foreclosed and abandoned homes.

The AP's analysis, however, shows the money will only make a modest dent in the problem. As of March 31, there were about 4 million homes that have been empty for 90 days — a slight increase over last year's figures and about 3 percent of all U.S. homes.

The federal money will be distributed based on a complicated formula that considers local rates for foreclosures, high-cost mortgages and vacancies. There won't be enough money to completely fix places such as the neighborhood in western Columbus that is the nation's emptiest. A mostly vacant apartment complex with chained-off parking areas shares a drab stretch of asphalt with a strip club, payday lender and abandoned retail stores. About 70 percent of the neighborhood's housing is empty.

The number of abandoned homes scattered throughout the nation's 65,000 neighborhoods concerns federal officials because of the potential to prevent the economy from recovering. Empty housing feeds upon itself. Experts say as more houses stand vacant, property values and tax revenues drop. The drop in property values lead to fewer buyers, which lead to more vacancies.

"It becomes a vicious cycle," said Jennifer Vey, a researcher with the Washington-based Brookings Institution. Vey said people have been shoved out of the Rust Belt by the collapse of the manufacturing economy for more than a generation now, and drawn to the temperate Sun Belt by more jobs and a lower cost of living.

The cycle makes residents in hard-hit neighborhoods feel as abandoned as the vacant buildings that surround them.

In some sections of certain areas like Cincinnati's Over-the-Rhine neighborhood, roughly two of every three homes are vacant or used by squatters. The area is more than 70 percent black and poor, with unemployment often around 50 percent. It's a place where simmering resentment and frustration boiled up into three days of rioting in 2001 after police fatally shot a young, unarmed black man fleeing arrest on traffic warrants.

The neighborhood, which took its name from early German immigrants, is highlighted by its 19th century Italianate architecture. On a cool morning on Elm Street, people sat on front stoops, chatting amiably with each other and greeting passers-by on what at first glance looked like a thriving, friendly residential block. But a look up at windows with only darkness behind them and doors with "No Trespassing" police orders gave it a Potemkin village feel.

"All those are empty," said Joe Griffin, 50, who is homeless and spends nights in a shelter and public park.

In Olejniczak's Buffalo neighborhood, homes across the street and on one side have been torn down, along with the house on the diagonal corner. The house on the other side of hers is standing but boarded, its lawn a tangle of overgrown weeds, pizza boxes, liquor bottles and wrappers. It's an eyesore she got tired of looking at. So, on a recent afternoon, she grabbed a shovel, rake, broom and a box of trash bags and, with her 81-year-old mother, got to work.

"I couldn't stand looking at this any more. I look out my window at it everyday," she said, nodding across to her own neatly kept home where daffodil shoots were sprouting after a long winter.

In Buffalo, there are as many as 10,000 vacant, abandoned homes. Suburban sprawl, an aging population and manufacturing losses have left the city with a population under 300,000 — about half what it was during the 1950s.

Things may be even worse in Flint, Mich. Jeffrey Taylor, 51, moved to a vanishing neighborhood in the late 1960s, when his father worked for General Motors. Taylor, a handyman, lives just north of a huge concrete slab once home to a 130-acre GM complex known as Chevy-in-the-Hole.

At its peak, the factories employed thousands. Now, all but one of the 20 factories and buildings in the industrial valley have been closed and torn down, driving residents from his neighborhoods. City officials are thinking about bulldozing large swaths of the city. Taylor's is one of the state's emptiest neighborhoods, with nearly one in three homes vacant.

"Once these shops are gone, these people start going back home, they start heading back south," Taylor said.

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