Smart Management and the Turnaround of a City

The right management tools can literally help rebuild a blighted city.
by | June 1, 2011
 

The trifecta: Innovation that improves results, lowers costs and raises more revenue. Now more than ever, we need win-win-win solutions.

In Baltimore, Deputy Commissioner Michael Braverman and his colleagues at Housing Code Enforcement (HCE) have such a trifecta in their sights. It's a new approach to turning over vacant properties that takes on urban blight and much more. That's a promising proposition in a city where 16,000 vacant properties degrade neighborhoods, harbor drug traffickers and other criminals, and erode economic vitality and the tax base.

Braverman and the HCE crew began by building internal capacity and reengineering and automating processes. They reduced enforcement response times from 14 days to four, and they reduced the time it took to "clean and board" vacant properties from over a year to 10 days, while doubling the volume of service requests from 15,000 to 30,000. They eliminated a backlog of 7,000 "clean and board" requests. These improvements brought in almost $7 million in new revenue.

HCE also wrote its own software to automate workflow and violation notice production and integrate with the city's 311 phone system. Placing the workflow data on the Web promoted accountability and improved productivity. It also saved more than $400,000 in data entry costs.

All that good work and more, however, wasn't getting at the outcome needed: more vacant and unsafe structures made habitable. HCE's work culture was more output-oriented than outcome-oriented.

Their next solution was strategic focus, implemented with an aggressive toolbox to overcome the variety of barriers to achieving the outcome.

Strategy began with triage. HCE is pursuing different strategies and applying different tools in each of three kinds of housing markets in Baltimore:

  • Distressed markets, those with many vacants and few community assets;
  • Transitional markets, ones with emerging areas where redevelopment enjoys stronger prospects; and
  • Healthy markets, with few vacants.

Different markets, different strategies, different tools.

In distressed markets, HCE maps the vacant properties along with other city resources and locations where developers already have toe-holds. Braverman explains, "This GIS lens helps us make sense of a map dotted with abandoned buildings, to pursue our 'vacants to value strategy.'" Pilot projects showed HCE how they could leverage the investments of committed developers to transform concentrated blocks of vacants. "A blighted block appears to be a monolithic problem, but we'd learned how code enforcement can leverage outcomes when solutions are individually tailored for each property," Braverman says. Distressed areas that are proximate to strengths have now become attractive to investors and developers. This new public/private partnership has already resulted in the commitment of more than $10 million for rehabs.

To turn whole blocks, however, HCE needed more tools, better tools, and all of them at their disposal. Then a code enforcement attorney can determine the best approach to each property, litigate the cases that require it, and retain control of the project until final resolution.

New tools included:

  • Proactive, targeted inspections to locate vacant buildings and lots. No more waiting for complaints.
  • Partnering with the Police Department to padlock properties to abate drug activity.
  • A new receivership ordinance that more quickly makes properties available for rehabilitation.
  • A team of investigators to identify and locate any property owner.

But even with these new tools, and the reengineering, HCE was not reaching scale. What now?

Baltimore's most recent solution is one targeted in transitional markets. Here, HCE employs a new action-forcing mechanism following the notice of violation. Instead of uncured violations leading directly to litigation, HCE can now issue a citation, which is like a traffic ticket. A citation for a vacant property costs the owner $900, other citations cost $250. Braverman predicts that 80 percent of cases will now be resolved at the citation stage and 20 percent will go to litigation, which would mean 80 percent fewer in litigation. That will save money and time.

Reducing HCE attorney time here frees it up for their critically important role in the "whole block" strategy for distressed markets described above.

To complete the triage, HCE proactively inspects and then quickly and efficiently cleans and boards vacants in the most severely distressed areas. In other instances they raze unsalvageable structures and create opportunities for green space and gardens. The strategy here is simply to "hold the ground" and reduce crime. Even in these areas, HCE's methods have yielded the city over $2 million in new lien revenue.

HCE is now engaging all the tools to achieve scale. "All violation notices in targeted areas will now follow a linear, measured path from issuance to outcome," says Braverman, adding that HCE will be "pounding the numbers" to make it happen.

As a result, Baltimore expects that 5,000-6,000 more vacant and unsafe structures will be made habitable in the next three to five years. In distressed areas, most of the rehabs will be affordable housing, either Section 8 or with purchase prices below $200,000.

Projections for new revenues include $3 million as a result of citations issued in the first year, $1 million in new permit revenue and $2 million in new property and income taxes.

More than $50 million in leveraged, private investment should complete the equation. All of the above means more affordable housing, reduced crime and fear, healthier and better-maintained neighborhoods, and an increased tax base.

HCE's lessons learned will sound familiar:

  • Many on the staff resisted new expectations, but HCE persevered, investing in internal capacity as they progressed.
  • Changing culture is hard work. Commit for the long run.
  • Innovation is messy. You need champions to overcome resistance.

Speaking of champions, it's worth noting that Baltimore's Outcome Budgeting championed by Mayor Stephanie Rawlings-Blake highlighted HCE's work and helped empower Braverman and his colleagues. It also didn't hurt that the FY11 budget proposal for this activity cost $750,000 less than the prior's year spending of about $13 million, down almost 6 percent.

HCE appears to be well on its way to better results, lower costs, and more revenue. Baltimore is achieving the trifecta.

For more information, contact Michael Braverman, Deputy Commissioner, Department of Housing and Community Development at Michael.Braverman@baltimorecity.gov.

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