Posted on August 15, 2013

A Chance to Own a Home for $1 in a City on the Ropes

Steven Yaccino, New York Times, August 15, 2013

As a tower of black smoke rose above this blighted city last week, a group of neighbors huddled across the street from a burning house, trying to guess which other vacant properties on their block would be arsonists’ next target.

“There’s so many,” said Tasha McMiller, 50, a resident dismayed by the estimated 10,000 abandoned homes here. “They’re a burden.”

Officials say that a third of the houses in Gary are unoccupied, hollowed dwellings spread across a city that, like other former industrial powerhouses, has lost more than half its population in the last half-century.

While some of those homes will be demolished, Gary is exploring a more affordable way to lift its haggard tax base and reduce the excess of empty structures: sell them for $1.

The program, announced in June, will offer Gary residents a chance to pay less for a house than for their morning coffee, as long as they meet a minimum income threshold (starting at $35,250 for one person) and demonstrate the financial ability to bring the neglected property up to code within six months. Those selected would have to live in the home for five years before receiving full ownership.

Nearly 400 people picked up applications on the first day they were available. After an extensive preselection process, the city will choose 12 out of 25 finalists in a lottery next month.

“My target would be to sell 50 houses a year,” Mayor Karen Freeman-Wilson said. “We’re getting these people to contribute as taxpayers. They can be part of the group that moves out, or they can be part of the group that invests.”

Efforts to revive distressed postindustrial cities across the country are being watched closely since last month when Detroit became the largest American municipality to file for bankruptcy. Indiana is one of 21 states that does not allow its cities to file for bankruptcy protection, according to the National Conference of State Legislatures. {snip}

Just 30 minutes from downtown Chicago, Gary was once a vibrant steel town with close to 180,000 residents in the 1960s. It is now home to less than 80,000 people and battered by decades of industry layoffs and racial friction that caused waves of suburban flight, shrinking city coffers drastically.

Gary, which is 85 percent black, has since wrestled with high rates of unemployment, crime and fleeing businesses, as well as fewer resources to invest into 50 square miles of infrastructure that continues to decay. {snip}


Critics say Gary’s problems are too great for the approach to make a noticeable dent. Many of the people who could afford to fix up a dilapidated home have already left the city, said Maurice Eisenstein, a political scientist at Purdue University Calumet. “Nobody wants to live there.”