End of Their Scope
The Success and Failure of Owner-Occupant Neighborhood Renewal On One City Block
Just below the Formstone cross over the doorway at 1702 Madison Ave., Pastor Wardell Jones is directing two young men as they pile old appliances and debris into the bed of a small pickup truck. After 15 years as the proprietor of the Holiness Church of Deliverance, Jones is moving out. “I’m trying to find a smaller place,” he says. Asked where he’s going, he smiles: “I don’t know.”
It’s a blustery Saturday afternoon in late February, and as Jones’ helpers haul out a four-burner electric range, three men of similar age and build to the movers stroll by dressed in gray hoodies. They exit the yard of the Pedestal Gardens housing complex across the street, then disappear past a bank of huge Baltimore City Police floodlights into the Eutaw-Marshburn Elementary School yard on their way toward McCulloh Street, the next block to the west. They’ll probably either join or replace a nearly identical klatsch of young men standing listlessly on the corner of McCulloh and Laurens droning over and over one word—“greens”—with the drab voice of burnt-out store clerks.
Jones says the drug dealers were working on this block when he bought the building that houses his church in 1991 for $6,500. The building next door—1704—was a crackhouse.
Things have gotten better in the past few years, Jones says—“greens” (green-capped crack vials) are seldom hawked openly right in front of the church anymore. The crackhouse next door has been boarded up and essentially shut down, although it has been left open occasionally by a real-estate agent in recent months. The house at 1704 Madison sports a for sale sign and a new white standard-sized front door shimmed into its rotting oversized doorframe.
The house two doors further down at 1708 Madison sold recently—for $130,000, its owners say.
Those owners—Bryan Taylor and Vaughn Vigil—are marking the end of a five-year experiment in urban pioneering. During their time in the huge, dilapidated rowhouse, the pair bought and cleaned up the vacant lot between their place and 1704 and opened a police substation in the back room of their own home (“True Believers,” Jan. 29, 2003). They’ve also endured bricks thrown at their windows, garbage piled in their alley, and drug dealers brandishing guns to try to scare them off.
Taylor and Vigil, who are half brothers, have kept a weblog of their experiences since shortly after their 2000 move-in. The blog, at www.rebuildingmadison.info, has served as an electronic diary and a record of the men’s experience fighting drug dealers, city administration, and people they regard as vulture investors. At turns euphoric, exasperated, and frightened, Taylor and Vigil’s blog tells a story that is unusual if only for their depth of engagement. Most of their neighbors, the men say, have adopted a “live and let live” attitude about the dealers.
“I just can’t do that,” Taylor says. “I mean, when you’re dealing crack on my front steps, when you are inside my vestibule, dealing crack, I just can’t leave that alone!”
But now they are leaving it alone. While they say they are happy to be leaving this particular set of troubles behind, they do so with regret. They are most concerned that their tireless attempts to bring peace and stability to one troubled inner-city block have failed, and if they can’t make a difference, who will?
“I think people who are following our saga will understand our frustration and our anger and our disappointment,” Taylor says. “If the only people buying these [houses] are slumlord wannabes . . . ” He does not finish the thought.
After all, Taylor and Vigil not only cleaned up their house and the vacant lot next door, they organized the neighbors and, with the city’s help, got the crackhouse at 1704 condemned and turned over to the city in the summer of 2003. They continued to fight off the neighborhood drug traffickers while marketing 1704 to potential buyers/neighbors.
Taylor says the mayor’s office helped guide his search for responsive city service providers, and that the Department of Public Works consistently responded to his complaints, sending trucks to clean out debris and fining property owners who dumped trash. But Taylor and Vigil contend that one of the city’s flagship redevelopment projects—Selling City-Owned Property Efficiently, or SCOPE—has let them down by refusing to sell 1704 Madison to a live-in, do-it-yourself rehabber like themselves.
City housing officials and real-estate agents say that SCOPE, like Project 5000—Mayor Martin O’Malley’s program for the city to take 5,000 of the city’s 30,000 or so derelict properties by January 2004—is a successful program that has stemmed blight and turned around formerly struggling neighborhoods like Reservoir Hill, just a few blocks north of the 1700 block of Madison Avenue. “The SCOPE process that you deride has sold 100 properties in the past 3 years,” Project 5000 director Michael Bainum wrote Taylor in a Jan. 25 e-mail. “It is a successful program as measured against past efforts to sell city-owned properties.”
But the record even in Reservoir Hill, the crown jewel of the city’s Project 5000/SCOPE success story so far, has been mixed. According to the city-supplied data, so far only six of the 20 Madison Avenue addresses taken under the city’s Project 5000 initiative have been resold, and all but one of those are on the 2200 and 2300 blocks, in Reservoir Hill. Only one of those houses is occupied by an owner-rehabber.
Until recently, neighborhood activists and residents across the city thought that all or most of the SCOPE houses would be sold to owner-occupants who would fix them up and live in them, each one forging in plaster and sweat the hard-won pride of ownership that builds stable neighborhoods.
The reality is different.
“I think we had bad information,” says Sara West, housing coordinator for the Reservoir Hill Improvement Council, which has been conducting a study of SCOPE’s impact on the neighborhood. (She would not share the results with City Paper because they had not been shown to city officials at press time.) Even though, she says, “I assume none of the regulations or the contracts changed,” the program has been entertaining bids from and selling properties to investors who plan multifamily apartment properties or simple land-banking.
“There has been some confusion about that,” Bainum acknowledges. It turns out that the SCOPE program’s requirement that new owners of SCOPE properties must be owner-rehabber “urban pioneers” is an urban legend, or a romantic myth. While some buyers must live in the building for five years, “It doesn’t need to be a single owner-occupant,” Bainum says. “Somebody could condo-ize it.” Or, he adds, a developer could agree to sell to an owner-occupant after rehabbing the building. He notes that the city insists on a deed restriction that allows the city to take a house back if the owner-occupant provision is not met.
In a late February interview in Baltimore Housing Deputy Commissioner Christopher Shea’s office, Shea, Bainum, and Housing Department spokesman David Tillman parsed the city’s overlapping residential redevelopment programs. SCOPE began in 2002, about the same time as Project 5000, but the two programs are independent. Not every building that the city takes under Project 5000 becomes a SCOPE property to be sold to a homeowner or developer, Bainum explains, and about half of the 107 SCOPE houses sold so far had nothing to do with Project 5000.
SCOPE was an initiative of the Greater Baltimore Board of Realtors, which partnered with the philanthropic Goldseker Foundation and a local nonprofit think tank called the Baltimore Efficiency and Economy Foundation in 2001. Noting the improving real-estate market conditions in Baltimore, the realtors’ organization urged the city not to give away its surplus properties, as was done in the 1970s, but instead sell them at market prices. They designed the program to allow the city to unload select surplus properties “efficiently,” in part by promising the realtors a minimum $2,500 fee per sale or an 8 percent commission—higher than the standard 5 percent or 6 percent. Properties sold through SCOPE are residential and located in areas that city housing officials think are on the way up; SCOPE properties are listed on the Greater Baltimore Board of Realtors web site.
Those online listings include not just a sale price but also an estimate of the repair costs of the building—which often appear much higher than the actual amount a developer would spend. The city examines potential bidders to make sure they have enough money to complete the repairs and no outstanding housing code violations.
SCOPE also requires buyers to finish all rehab work within a year and a half after the sale, and Bainum says the city enforces that time limit strictly, reviewing each SCOPE sale six months after closing. If no permits have been pulled, a reminder letter is sent to the owner, and the process becomes more intense as the deadline nears.
As of March 2006, the city has taken back zero SCOPE properties—even though only seven out of 20 were completely rehabbed within the time limit. Two have gotten extensions and most of the others have active permits, according to the Housing Department. “Only four appear to be problematic,” Tillman says.
Neighborhood activists like Taylor and Vigil and Reservoir Hill’s West grumble about former city-owned properties that sit vacant long after their sale to absentee developers instead of hammer-wielding owner-rehabbers. But Bainum says such complaints are often based on misinformation and confusion about which properties are SCOPE and which were transferred privately or through other city programs.
In short, Taylor and Vigil don’t really understand the program, Bainum suggests. He contends that the program’s rules offer the best balance the city has ever had to encourage and control small-scale redevelopment in residential neighborhoods. The story of 1704 Madison indicates how difficult that balance is to maintain.
1704 Madison Ave. is situated just three blocks from Baltimore City Police Commissioner Leonard Hamm’s home, two blocks from 11th District City Councilman Keiffer Mitchell’s. But the immediate neighborhood is decidedly not prosperous or gentrifying, and the big house, divided into six apartments, had become a haven for drug dealers and users by the early 1990s, according to Pastor Jones. A decade later, as Taylor and Vigil dug into their own project at 1708, they took a couple of police officers on a tour of their new house. When they reached the third floor, Taylor says, the officers looked out the huge front window and got a clear view of a young mother—her toddler playing on the sidewalk in front of her—sitting on the steps at 1704, dealing drugs from a stash hidden in her crotch.
“They ran down the stairs,” Taylor says of the officers. “They said just in two minutes sitting up here [they’d] seen enough probable cause to make four arrests.”
The brothers eventually got the city to take 1704 Madison’s owner, Clarence Weston, a city sanitation supervisor, to court, where in April 2003 he agreed to clean up the place in exchange for avoiding jail time. Taylor and Vigil say Weston did the minimum possible—neglecting, for instance, to empty out his rat-infested garage—but the house eventually transferred to the city, which pledged to sell it to a more responsible owner.
By August 2004, Taylor says he had at least two qualified people interested in making 1704 their home, and the city seemed to be on the same page. “We are planning to conduct a ‘Homesteading’ type program in that area,” Robert Pipik, then the city’s director of asset management for the Housing Department, e-mailed Taylor. “This involves selling the property to an owner-occupant rehabber type (like the person you describe).”
That sounded good to Taylor. But he says he later learned that the city would not sell to anyone who could not show the ability to invest at least $360,000—the amount, he says, the city determined it would take to rehab the property. Taylor says the figure seems ridiculous, and that it eliminated the prospects he recruited. He says he can’t help but think such a figure reflects either incompetence or obstructionism by the Housing Department.
“I think what we should have been looking for all along was a family with $150,000 and $30,000 to buy it—a $200,000 mortgage,” Taylor says. “That would have [gotten] another homeowner on the block. But nobody could buy it, nobody had the wherewithal to meet the figure that the city arbitrarily set.”
Bainum says the city’s system for estimating rehab costs is standardized and accurate. More importantly, he says, the city never said it would require more than about $240,000, the most recent city estimate, to rehab 1704 Madison. “I don’t think the number changed” he says. “It was always $240,000. I found no evidence that it was ever” $340,000 or $400,000 “or whatever Mr. Taylor said.” Bainum says that on a few occasions the city has even lowered the projected rehab cost of SCOPE properties after finding out new information—such as a roof that didn’t need replacing—though that didn’t happen in this case, he contends.
Yet Taylor has several e-mails from city officials alluding to the city’s rehab figure above $350,000, including an April 2005 e-mail from Ayanna A. Brown, real-estate agent in the Housing Department’s Land Resources division, stating that the building would be listed for “$20,000 and the estimated rehab cost is $362,772.”
The amount of money it would take to rehab any building depends on what one plans to do with that building. The first person whose bid on 1704 Madison Ave. was accepted by the city backed out after almost a year, he says, because he could not make the project profitable under SCOPE rules. He detailed his experience on condition that his name would not be used. Given his Middle Eastern descent, we’ll call him Ali.
Ali says he works full time as a manager in a computer firm and has been investing in real estate for three years, mostly in Baltimore County. The house at 1704 Madison would have been his second city investment and his first SCOPE deal. He says he won the property with a bid of about $30,000 in the spring of 2005.
His original idea was to convert it to three large apartments, rent them, and wait for the values to rise—a common property-investment strategy that, arguably, helped put the place in the condition it’s in now. The city said no way, so Ali looked at making a single residence out of the 5,000-square-foot building. He says the rehab would have cost $200,000, which, with his initial investment and other costs, would amount to more than the building would be worth when he was done.
His next idea was to convert it to three condominiums. That would cost $300,000—the extra expense being for additional kitchens and other amenities. Ali figured that the per-unit prices would have to be north of $150,000 for the project to be worth his time.
But costs increased as the deal changed. Proposing three units “caused the bank to push it from residential loan to commercial loan,” Ali says, increasing the interest rate on his proposed loan from 6.5 percent to 9 percent. He attempted to reassure the bank by trying to get comparable sales information for condominiums in the area, but it proved impossible. “They found three after months of looking,” he says, but “these were on Eutaw Street and Park Avenue”—higher-priced areas, of little use to him.
After several months, Ali says, he had invested several thousand dollars in architectural plans, fees, and other sundries, and his enthusiasm for the project was waning. “Then you have to pay legal fees to create condo association,” Ali says, adding about $15,000 to the total. “And new survey for each property,” he adds. “That increased the costs. The bank said, ‘We’re not comfortable doing this.’”
Ali wasn’t either—especially when he learned that, under SCOPE rules, he would have to live in his own project. He asked Taylor for help in getting that provision excised from the SCOPE contract, not knowing that Taylor’s activism had got the residency requirement inserted.
“He always e-mail government,” Ali says of Taylor. “I say if you do this all the time—do you think you have any influence . . . on this particular property? He says, ‘No I don’t think I have, but I’ll try.’” (Taylor laughs bitterly about that now: “I said no, so he backed out.”)
Ali says he appreciates the city’s intentions in requiring the buyer to live in the property, even though he tried to get the requirement lifted in his own case. “People with stake on it, they buying it, it’s theirs, so they take care of the property,” he says. “I really respect that. But sometimes the valuables that exist, they don’t allow for that.”
Ali gave up, convinced that the value of the property would not return the cost of renovation within the 18 months SCOPE allotted for renovation and resale. “SCOPE is a little complicated,” Ali says. “Not to say it’s bad—I’m sure they have a good intention. I think that’s where SCOPE program, sometimes it has unintended consequences.”
Consequences, Tillman says, are “unavoidable. You’re working toward an end use that makes sense for the neighborhood, for the community.”
In the past the city allowed anyone with a few bucks in his or her pocket to purchase city-owned houses. The result was often stasis, rather than progress, as speculators boarded up their low-cost prizes and waited for an opportune time to flip them—still derelict—to another speculator who often did the same thing. That city officials are suddenly guarding against such sales is “exactly the kind of attitude investors aren’t used to in Baltimore,” Tillman says. “Baltimore has choices now.”
A lot of would-be homeowners (and quite a few experienced real-estate investors) worry that SCOPE’s vetting and rules and checks present an almost insurmountable hurdle. The city says that’s all to the good.
“People think we’re sitting here in a dark room making up these rules arbitrarily,” Bainum says. “We’re not. We’re making these rules because their neighbors came to us and said, ‘We’re sick and tired of sitting here looking at this derelict place. We don’t want to wait six years for the dentist [who bought it] to fix it! We want it done in 18 months.’”
But what neighborhoods really want is control. They want to choose their neighbors as if in an audition. That’s what Taylor wanted to do when he recruited potential buyers for 1704, even forwarding a letter of interest from a neighbor to city officials. That’s what Reservoir Hill residents want, too, as they learn that the rules they thought governed SCOPE actually don’t.
Sara West, of the Reservoir Hill Improvement Council, says a SCOPE buyer disappointed residents recently with her plans. Sikirat Disu, a Hyattsville resident who bought 2555 Madison Ave. in March of last year for about $55,000, attended a city zoning hearing in which she was granted permission to create three dwelling units in her building. The neighborhood opposed her.
“Our concern was that a property sold through SCOPE was being used for multi-units,” West says. “That was not our understanding—ours was that it was single family owner occupancy with a possible granny flat. We learned that this was not the case.”
Disu, a longtime Washington property investor who teaches nursing at the University of the District of Columbia, says she, too, did not understand all the rules when she bought the property. “It was very difficult for me personally to pull the permits to do this, because it falls within a historic district,” she says. (Records show she pulled her first building permit on Feb. 17, 11 months after closing the sale, to install new windows and doors, drywall, and ceilings, and to paint throughout house.) “The [Upper] Eutaw/Madison [Neighborhood Association] people are not very friendly. I went to a meeting and I was criminalized.”
Disu says the building had four units in it when she bought it, and she actually wants to reduce it by one. She says neighbors continually tore down the sign she posted notifying them of the proposed change, making it difficult for her to keep it posted for the legally required 10 days. “We had to nail, glue, and tape it before it was able to stay there for the length of time required,” she says. “They are very nasty. Very nasty.”
In addition, Disu says she has been hampered by the city’s (and her lender’s) expectation that her contractors be licensed and inspected. “They have to have this license, that license, this, this,” Disu complains. “That’s why you have a lot of people, when they do [rehab work] in Baltimore, they do it on weekends.”
Disu says that under the terms of her purchase agreement she does have to live in the building for five years, and that she expects to move from her Hyattsville home of 21 years when the work is completed, within “a few weeks.” On Feb. 28, the building is still boarded up, its roof tiles hanging at crazy angles, bricks crumbling from the front staircase.
Disu is not the only new SCOPE owner in Reservoir Hill who has faced challenges. Todd Wetzelberger, the New Orleans-based developer who bought two houses near the corner of Madison and Whitelock in November 2004, faced down a neighbor who charged him $22 an hour to watch over his contractors and later made threatening phone calls to his family and fired a BB gun near him and his wife (“Witless Intimidation,” The Nose, June 1, 2005). Fifteen months after his purchase, Wetzelberger’s projects, at 2234 and 2238 Madison, are still boarded, though permits have been pulled and new wiring—probably for lights and doorbells—pokes through holes in the stone near the front doors. Wetzelberger could not be reached for comment for this article.
The only one of the six former city-owned houses on Madison Avenue that appear lived in as of February is 2337 Madison Ave. The owner, Chad Wright, was something of a poster boy for the SCOPE program, serving as the lead example of SCOPE’s benefit to the city in a March 6, 2005, story in The Sun. At the time, the 27-year-old sprinkler-system designer said he had spent about $200,000 on his rehab, and accomplished much of it with his own hands, working nights and weekends. The Sun story also reported that Wright began working on the house in April 2004, a week after settlement. The Project 5000 database indicates that the city took possession of the building on Feb. 13, 2004—just 37 days before Wright took it over.
“I got it fast because I did a lot of the legwork for the realtor,” Wright says. “I did a lot of ‘What can I do to speed up the process?’ ‘Well, I need these packages here, and those packages there.’ I know the city [permitting process]. I used to pull permits for fire sprinkler systems.”
Wright, who a year ago was the very picture of the rehabber-homeowner, says he left his sprinkler job and now rehabs houses full time. He says he and a partner have three projects underway now—one next door to his own home. “We’re trying to pick up a couple of houses in Reservoir Hill, and trying to improve the neighborhood one house at a time,” he says.
Wright’s own home, though, isn’t quite through the SCOPE process yet, he admits: “I had a couple of family emergencies [and] had to get an extension of time” to complete the renovation. That means Wright could be, technically, in violation of SCOPE’s rules—but he says it’s because the city lost some of his paperwork. “I have to go down there this week and straighten this all out,” he says.
Snafus at the city’s housing office also recently made trouble for Wright and his business partner, Raj Seghal, in their renovation of 2339 Madison, Wright says. “Their records show the city still owns it,” he says. “They were about to sell 2339 [to someone else].”
Indeed, the city’s Project 5000 list and the Maryland Department of Assessments and Taxation both show the property as still belonging to the city of Baltimore.
Back on the 1700 block of Madison, Taylor and Vigil are locking up the police substation at the rear of their house, wondering if anyone in the neighborhood will take on the mundane responsibilities of establishing another one and stocking it with coffee, bottled water, and toilet paper. They doubt it. That’s the difference, they say, between a mere investor and a citizen.
Even so, it’s hard to overlook the condition of the rest of their home, which, after five years’ residence, shows little sign of renovation. Taylor says that’s because of the neighborhood. “If we had invested $150,000 and did the work ourselves, I think it would have been a fine home,” he says. “Instead, I went to Home Depot and did [the minimum] I had to do, because I didn’t want to live here.” His windows stayed mostly boarded, he says, to keep out bricks and gasoline bombs.
If only the city had helped more, Taylor says, the neighborhood could be well on its way to health. He remains astounded at the amount of time it has taken—so far—to get 1704 Madison into the hands of a homeowner, and he can hardly believe that the city has not allowed him, the man who got the trash cleaned up and who personally took a police officer through 1704 Madison to clear out squatters and turn off the gas, to help vet any would-be owners. “The only one who knew the block was never consulted and was treated with contempt by the city,” Taylor says.
Taylor, Vigil, and others who’ve followed SCOPE and Project 5000 closely, insist that the city should favor owner-occupant rehabbers and shun profit-motivated sorts. They argue that people who build up their own houses have more emotional investment in their properties than the buyer who purchases a rehabbed place from an investor—and, of course, way more emotional investment than the flip-driven investor himself. That emotional investment, they argue, translates into vigilance, political activism, and agitation for city services and against drug dealers and other corrosive problems.
It’s a sensible theory, but unproven at best, romantic at worst, says Sandra Newman, director of the Institute for Policy Studies at Johns Hopkins University and an expert on housing issues.
“Of course it’s wonderful,” she says, when people rehab and move into homes like the one Taylor and Vigil bought. But “you can’t redevelop a city that way—you just don’t have enough people, or enough capital.”
And there’s another problem, from the perspective of people like Newman, and Bainum, who are trying to devise housing programs that will work for a lot of people in a lot of places for a long time. Devising a study to see if the Taylor/Vigil system works would be very difficult, Newman says, because people like Taylor and Vigil and Wright are rare and remarkable: “It’s hard to get a handle on [them] as a researcher.” Newman says she thinks the city should do all it can to encourage people like Taylor and Vigil, “but you can’t turn a nonpioneer into a pioneer.”
You can, however, turn a pioneer into a person who’ll take the money and run. Taylor and Vigil closed the sale of their experiment in January, taking $130,000 for a place that they—on paper—invested only about $20,000 to buy. But that doesn’t count all the work, the trash bins rented, patching the roof, the new windows, wiring, and plumbing. And that doesn’t count the nights awake, one hand dialing 911, the other gripping a shotgun, as they waited for the final break-in, the Molotov cocktail long promised by the thugs just outside their door.
The brothers say they have mixed emotions about leaving, and they admit that their buyer, a man who goes by the name “Mike Vaughn,” is the kind of investor they tried to hold out against. “They always say they want to ‘help the neighborhood,’” Vigil says. “But they don’t move in.”
Reached by phone, the buyer declines to spell his name for a reporter. “The spelling of my name is not important,” he says. “I’m a small developer—I don’t need any advertising for what I do. . . . I’m one of those people who always likes to quote unquote slip under the radar.”
Records associated with the property and with his LLC indicate that his name is Cesare Miguel Vaughan. Court records indicate that a man by that name, 42 years old, had his Maryland driver’s license suspended in 1985, and that it was never reinstated. Baltimore Gas and Electric sued Vaughan last year to collect $700. Washington Gas and Light separately sued the resident agent of his real-estate company, Noelle Vaughan Mathis, for $1,100 for service at the company’s Greenbelt address.
Vaughan declines to say how long he’s been in the real-estate business, but says he has renovated and rented out more than five Baltimore City properties. “I may sell some this year,” he allows. “Surely what the place needs is homeowners . . . rather than renters.”
At first, Vaughan says he’ll probably keep the police substation operating, but then avers, “I can’t see it serving a great purpose. They come in and do their lunch and use the bathroom or whatever—there’s still drugs 20 feet away from them.”
Asked about the drug dealing on the block, Vaughan howls: “Whooo! That’s something I truly can’t understand. The police chief lives at the 20-hundred block of Madison. There’s drug dealing a block away. How can it be? That baffles me—truthfully it does.”
But then Vaughan sounds more like the hopeful investor—more like, in fact, the men from whom he bought the place sounded six years ago. “Truly the neighborhood is on the upswing,” Vaughan reasons. “To keep it on the upswing you got to get rid of some of this negativity.”
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