City of blight

The tough road to recovery for Atlanta neighborhoods ravaged by vacant and foreclosed homes

It was late one spring afternoon in 2007, and Chandra Gallashaw couldn't figure out why her daughter wasn't home from school. She kept calling the 17-year-old's cell phone, but there was no answer.

The 11th-grader had won an ROTC award earlier that day and was still wearing her uniform as she walked home through Atlanta's Pittsburgh neighborhood about a mile south of downtown. She was four doors from her home when a man grabbed her, dragged her onto the porch of an abandoned house and, according to authorities, sexually assaulted her.

Afterward, the girl ran to a nearby ambulance and was taken to Grady Memorial Hospital.

Nearly three years later, the man accused of raping Gallashaw's daughter is awaiting trial, and the house where the crime took place is gone, leaving behind a vacant lot. But that's of little comfort to Gallashaw. Standing on the sidewalk outside her home, she looks up and down her street. "That house is empty, and that one, and that one," she says, pointing to at least a half-dozen boarded-up bungalows in all directions. "That's why no one could hear my baby cry."

Gallashaw is now a board member with the Dirty Truth Campaign, a four-year-old grassroots group bringing attention to the surge of vacant properties and blight that has beset Atlanta's inner-city communities in the wake of the foreclosure crisis. As part of its efforts to spread word of the crisis, the group recruited schoolchildren to take pictures of run-down or abandoned houses in their neighborhoods and provide testimonials about how their surroundings affect their lives.

While the Dirty Truth has few resources beyond its core of volunteer activists and supporters, a host of other organizations, equipped with $12 million in federal Neighborhood Stabilization Program funds and additional millions in private grants, are working to revive Pittsburgh, Adair Park and other hard-hit neighborhoods.

But the solution isn't as simple as new siding and a fresh coat of paint. A recent survey suggests that at least half the houses in Pittsburgh are empty. A short drive reveals what one neighborhood activist calls "Hurricane Katrina without the water" – block after block of boarded-up buildings, overgrown grass, and piles of trash. Some houses sit completely open, just a roof and walls. Squeezed between older homes on Pittsburgh's narrow streets are new, two-story homes with plywood over the windows, products of the nowhere-to-go-but-up fallacy that fed the housing boom.

"Vacant homes are ravaging these neighborhoods and their remaining residents," explains John O'Callaghan, CEO of the Atlanta Neighborhood Development Partnership, which works to support mixed-income communities. "Research shows that every 1 percent increase in the vacancy rate brings about a 2.3 percent increase in crime."

Destabilized neighborhoods have become breeding grounds for violent street gangs such as Mechanicsville's 30 Deep. The stakes for the success of revitalization efforts are high – not just for the affected neighborhoods themselves, but for the future of the city, says Mayor Kasim Reed. If Atlanta can't combat neighborhood blight and get people into some of its now-vacant homes, Reed predicts, "There'll be a reverse of the intown migration and we'll become a second-tier city."

In January, the city learned that its application for an additional $58 million in stabilization funding had been turned down by the U.S. Department of Housing and Urban Development. The news shouldn't have come as a surprise. A December audit showed that almost none of the money in the first round of NSP grants to rebuild neighborhoods had yet been spent — a phenomenon that managers of the fund attribute to fierce competition to buy the homes. The city now risks losing any funds uncommitted by September.

While the program may have sounded reasonable to its creators in Washington, it's been difficult to get off the ground in Atlanta. A collection of local nonprofit development groups are expected to use the grant money to buy and rehab foreclosed homes to sell them to low-income families. But bottomed-out home values turned Pittsburgh and surrounding neighborhoods into hotbeds of speculation by out-of-state private-equity groups competing with the grant-holders. Those groups have been willing to pay cash for dozens of properties at a time, sight unseen – and because the grant-holders have to observe strict HUD purchasing guidelines, they don't enjoy a level playing field.

"We've got to make bids on up to 10 houses in intown Atlanta just to get one because we're competing with private investors," says the ANDP's O'Callaghan, whose group received $1 million in NSP grants through the state to buy properties across metro Atlanta. The average price for a foreclosed home in Pittsburgh is between $20,000 and $30,000 and rising, he says.

Normally, increasing interest from buyers would signal that the market is functioning properly, but in this case, it's evidence that bottom-feeders are moving in, according to O'Callaghan.

"Some of the private investors are fixing up houses, but too many are leaving them vacant and waiting for prices to go up," he explains. "Others are doing below-code rehabs, charging Section 8 federally subsidized rent and not taking care of the property. None of that helps the neighborhood."

The city's largest federal grant – $2 million – went to a partnership between the local Pittsburgh Community Improvement Association and the Baltimore-based Annie E. Casey Foundation, which has spent millions in private funds to revitalize the embattled communities in Atlanta's Neighborhood Planning Unit V, which includes Pittsburgh, Adair Park, Mechanicsville, Summerhill and Peoplestown. The foundation owns a 31-acre lot along the Beltline at the southern edge of Pittsburgh where it's eventually planning to build a mixed-use development to provide local residents with jobs and places to shop.

Armed with an additional $2 million in loans from the Casey Foundation – money that doesn't come with HUD restrictions – the partnership has managed to buy about 60 properties so far, says PCIA CEO LaShawn Hoffman.

Eventually, he says, the group will buy and rehab 100 houses – nearly a quarter of all the vacant homes in Pittsburgh.

"The goal is to create a neighborhood for working families," Hoffman says.

Founded by former slaves in 1883 within a triangle bounded by two rail lines and what is now Metropolitan Parkway, Pittsburgh is one of Atlanta's oldest intown neighborhoods. In 1929, Atlanta Public Schools opened its first African-American elementary school, Crogman Elementary, in the heart of the thriving community.

When NPU-V President Travie Leslie moved into nearby Adair Park in 1978, she says most local homes were occupied and the schools full of children. But by then, a migration to the suburbs had already nudged much of Atlanta's southside into a steady decline. As older residents died off, entire blocks shifted to rental properties. Pittsburgh's population took a nose-dive as redlining by banks stifled home sales. During the 1980s, the neighborhood lost households at a faster clip than any other part of Atlanta.

By the time Hoffman arrived eight years ago, Pittsburgh was one of the roughest, most impoverished areas of the city, riddled with vacant lots and choked with illegal dumping. Crogman Elementary was an empty shell prowled by the homeless. But at the same time, the housing bubble was starting to inflate, and long-depressed NPU-V was primed to become a center of frenzied real-estate speculation, house-flipping and subprime lending. The promise of the Beltline, which forms the district's southern boundary, only served to ratchet up prices.

"Mortgage fraud was on a rampage," says Hoffman. "People were buying homes, refinancing them, pulling out the equity and leaving them abandoned. Many houses changed hands three or four times in a year."

The new houses built in last few years weren't affordable for existing residents, he says. And now that the bubble has burst, most stand empty. Many residents have lost their homes to foreclosure or walked away from overpriced mortgages. The vacant houses serve as magnets for vandals, squatters and thieves who steal A/C units, appliances and copper wiring.

Leslie says the house next door to hers in Adair Park has been flipped, boarded up, stripped and fallen into disrepair. Three months ago, a representative from a management company stopped by, telling Leslie that his firm had only just learned it owned the house. "It was the craziest thing I've ever heard," she says.

By Hoffman's reckoning, Pittsburgh is as bad off as it ever was. A loft complex that occupies the old Crogman school is one of the few signs of progress.

"I think we've probably lost all the gains made during the housing boom," says O'Callaghan, who says a recent study by ANDP shows that property values in NPU-V have tumbled an average of 80 percent. "The families that have managed to hang on have seen their home values drop to what they were before the Olympics."

The first step in solving the problem of vacant properties, says O'Callaghan, is to determine who owns them. County tax records, the most reliable public resource for researching ownership, are often months out of date.

"If a house isn't listed for sale, it can be very difficult to find out who owns it," O'Callaghan says.

Dirty Truth volunteers, including Gallashaw, have spent years cataloguing and photographing nearly 1,300 abandoned homes across NPU-V. But Mayor Reed says the city also needs to compile a database of property owners, so he's enlisted state lawmakers from the hardest-hit Atlanta neighborhoods to sponsor a House bill to allow the city to require the registration of vacant houses.

Reed also aims to encourage property owners to find renters by sharply increasing fines for empty houses for such code violations as unmowed grass and crumbling porches.

"We're going to have an aggressive standard for maintaining these properties because of their negative impact on neighborhoods," he says. "Private investors that are buying houses just to sit on them will have to pay a premium for blighting the city."

With a mere 14 code inspectors left in the city, Reed says he plans to place code-enforcement under the police department and train rookie cops to write code citations. The mayor says he's also urging local banks to rent foreclosed properties to help their own bottom lines.

"Vacant houses can't sit for any length of time without getting stripped," Reed says. "If you don't want to get into the rental business, then you're going to be in the home rehab business."

Dirty Truth board Chairman Robert Welsh believes that, with the cooperation of the city, the NSP grantees and groups like his, the neighborhoods can see solid improvement in five years.

"I think a tipping point is what you need," he says. "As long as you can get more houses occupied by residents who want to be there, the neighborhoods will start to change. They'll transform."

In Pittsburgh, residents hold cleanups every three months to collect dumped tires and trash bags. Gallashaw says most neighbors try to keep an eye on the vacant home next door. A community garden started in a vacant lot owned by the PCIA – the lettuce, tomatoes and watermelon are given to elderly residents – might soon be joined by a second nearby. In neighboring Mechanicsville, where longtime residents have been joined by urban-pioneering newcomers, a new crop of leaders have rekindled the neighborhood association's initiatives and coordinated weekly dog walks and community cleanups.

Gallashaw, whose daughter graduated from high school with a $200,000 college scholarship and now studies creative writing and theater, still lives in Pittsburgh with her other children.

"People told me, 'You gotta move,'" Gallashaw says. "But we're not gonna run. We're gonna help this community and ourselves. All of us have a story, one way or another. And we're here for each other. I've never seen a community like this in my 42 years of life."