Bringing Down the House

Taxpayers spent $65,000 to demolish the old Victorian at 1816 15th Ave. S. A buyer wanted to invest at least that much to fix it up. Make sense? You bet, says the Minneapolis Community Development Agency.

After setting up a guest with a big glass of water, Zala points the browser at the site, set up and maintained by the Phillips Neighborhood Network, a volunteer group supported by a gaggle of University of Minnesota interns. (The area's official organization, People of Phillips, collapsed last year amid controversy over its spending of city funds.) She hits a hyperlink and up pops an inventory of vacant and boarded-up properties compiled by the network--page after page of addresses and a summary noting that between 1997 and 1998, the number of abandoned houses in Phillips nearly doubled, rising from 130 to 257.

But the site's pièce de résistance is yet to come. Zala brings up a map of the neighborhood, with boarded-up houses marked in red and vacant properties highlighted in blue. In the eastern half of Phillips, the map looks like a Chinese checkerboard crammed full of marbles, with some blocks almost completely covered in red and blue dots. It's a stunning graphic, and Zala knows it; she waits for her visitor to take it in, then offers the conclusion: "We call this a crisis."

About half of the board-ups in Phillips, according to PNN's 1998 inventory and property-tax records, belong to public entities including the MCDA, Hennepin County--which takes over properties whose owners quit paying taxes--and the federal Department of Housing and Urban Development, which picks up houses when their federally insured mortgages default. The MCDA frequently buys properties from the county and HUD; it also inherits properties from failed development schemes. In 1997 it took over 30 structures, including the brick Victorian at 1816 15th Ave. S., from the Phillips Neighborhood Housing Trust (PNHT), an affordable-housing nonprofit gone bankrupt.

Michael Dvorak

Even the MCDA's staunchest critics admit that saving those houses can be a tall order. By the time a structure is boarded up, it has often suffered years of deferred maintenance, and the deterioration accelerates as the house sits empty. Abandoned buildings are often targets for vandals and architectural thieves; time and the weather also take their toll as tiny leaks turn into gushers and siding rots under chipped paint.

And the neighbors get irritated. Until a few years ago, activists in Phillips and elsewhere routinely criticized the MCDA for not tearing down board-ups fast enough. "The neighborhood could sit and look at a burned-out house for years," recalls Jennifer Naglak, who has been volunteering as the area's housing facilitator. But, she adds, once the city cleared out its backlog of burned-out shells, the climate shifted; now, activists tour each property slated for demolition and work to save buildings whenever possible. "It's been two or three years since neighbors were wildly saying 'tear these blighted buildings down.'"

Something else changed in those two or three years: "Sold" signs started popping up on Phillips blocks. A "back to the city movement" has put the neighborhood back on the real estate map, according to Sandy Loescher of Sandy Green Realty, a Phillips resident who has sold inner-city real estate for years. "Last year was the best housing market I'd ever seen," she says. "This year the supply is smaller, but the prices are up."

Phillips is particularly attractive, Green and other real estate agents say, to people who couldn't own a home anywhere else: The neighborhood is among the poorest in the city, and its properties are within reach of families unable to cough up the six-figure amounts "starter" homes elsewhere routinely fetch. "People are looking at Phillips because the same house would cost a whole lot more in any other neighborhood," Green says. "The good houses have been selling very quickly; many in less than a month, which is new. I used to take a listing in Phillips and prepare people for six months."

Corinne Zala is seeing the same patterns in her real estate business: "Right now, properties we know as dogs have five or six buyers." Historic buildings, she adds, are sought after almost no matter what their condition. But, cautions Zala, the bull market will not last forever--and when prices drop, her neighborhood will be the first to feel the pinch. "The time is right to sell these houses," she concludes.

 

Vanessa Stephens first saw the brick house at 1816 15th Ave. S. a few years ago, when she visited Katrina Harrison as an educator for the Phillips Lead Poisoning Prevention Project. The two women, both mothers of preschool children, soon became friends. From time to time, Stephens would tell Harrison how much she liked the quiet block near downtown and, specifically, the Victorian next door. "I'd lived on Franklin and Portland for three years," she says. "And we--me, my husband and kids--needed more space."

Casual conversations turned into urgent discussion in May 1998, when Harrison learned that the MCDA had asked for bids for the demolition of 1816. She got on the phone to Stephens, who immediately set to developing a rehab plan. When she pitched it to the Phillips Community Housing Committee, the volunteer-run board voted to reverse its previous approval of the demolition. The committee also recommended that the MCDA "accept a viable proposal from Vanessa Stephens to rehab the house at 1816 15th."

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