City waits to find out if it gets more funds to raze homes

DeWine has set aside $75 million from mortgage-fraud case.

Housing crisis Neighborhood stabilization

SPRINGFIELD — The city of Springfield is eager to receive extra money to speed up its demolition program, but it may not land part of a recent allocation.

Attorney General Mike DeWine hasn’t finalized rules for distributing the $75 million he set aside for demolition from last week’s national mortgage-fraud settlement.

But he will require an equal city or county match, according to Lisa Hackley, DeWine’s chief spokeswoman. That could hinder Clark and Champaign counties.

“It’s impossible for me to say how hard or how easy it will be to get the money until they come up with the rules,” said Shannon Meadows, Springfield’s community development official who also oversees demolition. “The city runs an aggressive demolition program regardless. This would only enhance our ability.”

Springfield has demolished or ordered the demolition of more than 2,000 homes in the past 10 years, but has 300 to 400 more decrepit, unoccupied buildings in its sights. Most of its demolition money comes from federal neighborhood-stabilization programs, which DeWine may bar from being used as a match.

Decrepit buildings bring down property values in the surrounding neighborhood, discouraging home improvement there — because investments are less likely to be returned. And when home values are depressed, residents have limited ability to leverage their equity to move elsewhere.

Structures like this can also attract crime, Hackley said, draining law enforcement funds while not typically bringing in tax revenue.

One goal of DeWine’s move, Hackley said, is “returning the land to maybe some form of use.”

DeWine is the only attorney general in the country to allocate its portion of the foreclosure settlement primarily to demolition, according to Jim Rokakis, a land redevelopment expert.

But in speeches, DeWine has emphasized land banks — financial tools that fund re-use projects (particularly demolition) with property tax penalties. There aren’t any land bank systems set up in Clark or Champaign counties.

Because rules haven’t been finalized, Hackley couldn’t say whether land banking would be a requirement for receiving the money or even a preference. She also couldn’t say whether communities without land banks but with lots of vacant homes would get any special consideration.

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