A Q & A with Paul Brophy
Paul Brophy, principal with Brophy & Reily LLC of Columbia, MD, is also the former president of the Enterprise Foundation.
You argue that vacant and abandoned properties are actually positive assets for cities. How can that be?
Brophy: The fact is that land is the one thing we are not making more of. In particular when we look at central cities and the demographics as to where we are going as a society, the demand for inner-city living is increasing over time. So the land in cities is going to become increasingly valuable. Over the long run and in some cases the very short run it is a very positive asset because used correctly it can be transferred into productive use again. The demographics are now working in favor of central cities because the percentage of the population that has an interest in living in cities is increasing.
What are the main challenges that local governments encounter when trying to redevelop vacant and abandoned properties?
Brophy: First is their legal systems. Over time we have developed state by state a set of processes that make it difficult for local governments to acquire land and dispose of land. Some states are streamlining that, such as with tax delinquency processes that allow municipalities to take properties because of longstanding delinquency. Then there are issues related to ground rules set up in order to avoid fraud or scandal and to dispose of properties fairly. So point one is getting systems straightened out. Point two is getting staffing capacity to do this in a streamlined and professional way. Those two elements are important constraints to overcome in getting property reused well. I would add a third point – that is to do it in a way that leads to the creation of markets. That means a lot of planning has to go on as to how properties are acquired and reused.
There are obvious large costs associated with redevelopment. To what extent should taxpayers be asked to subsidize these conversions?
Brophy: It’s a short term subsidy for long term gain. Those in many cases are properties that now aren’t paying property tax, they’re not doing anything for the economy in these cities. I think it’s more of a taxpayer investment than a taxpayer subsidy.
How can cities avoid the classic pitfalls of central planning in approaching vacant and abandoned property development? Why shouldn’t we just let the private market put these properties to their best and highest use?
Brophy: The proper way, the smart way of redevelopment is to acquire land and, in some cases, re-parcelize it, because it may be obsolete in its current form. Then bringing in the private market into redevelopment, and doing that in a competitive fashion. But local government’s role is to equip the market to do what it does best, which is to create value. In these situations, that requires a level of sophistication at the local government level about markets, and we do have a lot of learning to do there.
What is the value of research in addressing vacancy and abandonment?
Brophy: We need to be making our decisions on the basis of facts and on the basis of good analysis. My sense in this area is in particular is that we have just jumped in a quantum way with the development of geo-mapping and other tools so now we can look at our cities in different ways and more sophisticated ways than before. That allows us to make place-space decisions with research adding extra value.