Gary, Indiana to sell 7,000 properties for $1.00 each.

Gary, Indiana has proposed two steps that may predict the future for cities across the country:

 

(1) The Daily Mail reports that the City would like to operate on 40% less land.  40% of Gary's land would "return to nature" under this plan.

 

(2)  Gary owns 7,000 properties (compared with the roughly 500 owned by Harrisburg, PA).  Gary proposes to sell these properties for $1.00 each. 
  

• In the next few months the city is planning to auction off the housing for $1 each.
• The homes would each need $15,000-$30,000 in repairs.
• Buyers would have to agree to renovate their purchases as quickly as possible.
• If buildings are beyond repair, NBC reports that a 'deconstruction' program could be initiated - to take apart buildings and recycle materials.

This approach fails to recognize the title defects that result from prior tax sales.  The City is unable to convey good title to these buyers.  The buyers will have to file quiet title actions (against prior owners) in order to clear the title and obtain financing for the repairs. 

 

Despite the flaws in this proposal, urban consolidation is an approach that will become almost mandatory as municipalities struggle with declining revenues and increasing service costs.

 

Compare this approach with the approach taken by Detroit in recent years. 

  

Update - August 25, 2013
Tara Steele provides more information on the "catches" in this program.

Detroit's consolidation moves forward - large areas to be demolished - urban planners watch and wait.

I have written previously on the City of Detroit's plan to downsize by abandoning large portions of the city and consolidating into a smaller area, with hopes to convert the abandoned real estate to agricultural uses.

Detroit has taken another step in this process by announcing plans to demolish 3,000 homes this summer (as part of a larger goal to demolish 10,000 homes in the mayor's first term). That the consolitation is proceeding with such major steps should interest urban observers everywhere, including those in Pennsylvania's cities. Detroit differs from Pennsylvania only by degree.

Detroit consolidation update.

Last week's story of the City of Detroit being "downsized" has been updated in The Washington Times:

Operating on a scale never before attempted in this country, the city would demolish houses in some of the most desolate sections of Detroit and move residents into stronger neighborhoods. Roughly a quarter of the 139-square-mile city could go from urban to semi-rural.

Near downtown, fruit trees and vegetable farms would replace neighborhoods that are an eerie landscape of empty buildings and vacant lots. Suburban commuters heading into the city center might pass through what looks like the countryside to get there. Surviving neighborhoods in the birthplace of the auto industry would become pockets in expanses of green.

This ongoing story is worth watching by everyone in the Eastern United States for the following reasons:

• Detroit's deterioration has advanced beyond that of other cities (including Pennsylvania cities) only by a matter of degree.
• City planners are going to make a serious attempt to implement this plan, but the result will not be picturesque farms where once stood blight.
• At some point this decade, Detroit will be mired in lawsuits related to eminent domain and the validity of disputed title claims (as well as protests, demonstrations and civil unrest resulting from forced relocations).
• It is likely that clouded title resulting from a history of tax sales has created uncertainty as to the true ownership of so much Detroit real estate (sound familiar?) and worsened the blight that this proposal is attempting to remedy.

Wherever blight and depopulation exists on a large scale, forced relocation, consolidation (and resulting litigation) will become an option for city planners.