New Orleans No Longer Most Blighted U.S. City: Detroit and Flint, Mich., Come Out on Top

blighted U.S. cities

Ever since Hurricane Katrina ravaged most of its homes seven years ago, New Orleans has been considered the most blighted city in America -- until now.

Detroit and Flint, Mich., also long known as troubled towns filled with abandoned properties, have overtaken the Big Easy as the most blighted in the U.S., according to the Greater New Orleans Community Data Center. Meanwhile, government aid and a surge in citizens reclaiming their homes have brought down New Orleans' supply of dilapidated or demolished homes.

Detroit and Flint have had higher levels of blight than New Orleans since March 2011, the GNOCDC study showed. And as of March 2012, 24 percent of Detroit homes and 27 percent of Flint homes were considered blighted, compared to a rate of 21 percent in New Orleans. (The study used data on "inactive" postal addresses to determine those numbers.) Rounding out the top six in the study's list of blighted cities were Youngstown, Ohio -- which tied with New Orleans -- Cleveland (with a 19 percent rating) and Baltimore (with 14 percent).

The housing bust was a major factor in boosting blight in Detroit and Flint. Data from online foreclosure marketplace RealtyTrac showed that both cities tracked above the national foreclosure rate over the last six years.

The study underscores the positive impact of anti-blight policies. Bolstered by billions in government relief, New Orleans "made blight a major focus," ramping up code enforcement and increasing its auctions of vacant homes, said Allison Plyer, chief demographer at the Greater New Orleans Community Data Center. The city also benefited from the "Road Home" program, which paid 42,000 homeowners to restore and reoccupy their damaged homes.

These efforts' impacts are clear: In March 2008, 34 percent of New Orleans' housing supply was either vacant or uninhabitable, way above its current rate of 21 percent and nearly double that of the next most-blighted city at the time, the GNOCDC study said.

Also, the Louisiana city hasn't been as hard hit by the real estate slump.

In 2011, only 1.39 percent of New Orleans homes were foreclosures, RealtyTrac said. By contrast, 2.94 percent of homes in the Detroit area and 2.74 percent in Flint, Mich., were foreclosures. The national rate was 1.45 percent in 2011, according to RealtyTrac.

So what's weighing down Detroit and Flint? Partly it's because the cities have not had the resources that New Orleans has to combat blight. A dramatic population decrease plaguing the two cities ever since the auto industry relocated has tied their hands, said Amy Hovey of the Center for Community Progress, an organization that promotes the reuse of vacant properties.

In some neighborhoods, "it's so vacant that it's kind of like a ghost town," said Hovey, who is based in Flint. "There's no people in those neighborhoods. It's kind of eerie."

Hovey said that to reverse the residential decay, local governments or land banks -- entities that are often used to buy up distressed properties -- must seize the homes and either demolish or rehab them.

Baltimore, another city plagued with blight, announced in the spring that it intends to use its allotment of the $25 billion "robo-signing" settlement to demolish about 700 homes. The GNOCDC study found that 14 percent of Baltimore homes were blighted as of March 2012.

Plyer said that selling abandoned properties in bulk, another approach to combating blight, is less helpful. Investors are not always civic-minded, she said, and often are quick to discard their acquisitions. She disapproved of a recent deal in which the Treasury of Macomb County in Michigan sold 627 homes at a foreclosure auction to a yacht dealer named Bill McMachen.

"Studies show that properties that sell through an auction like that -- they come back through the process, like, two years later," she said.

10 Emptiest U.S. Cities 2012
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New Orleans No Longer Most Blighted U.S. City: Detroit and Flint, Mich., Come Out on Top

12-Month Averages:

Rental vacancy rate: 11.5%
Homeowner vacancy rate: 3.8%

Of the 75 largest U.S. cities in the first quarter of 2012, Toledo recorded the highest rate for homeowner vacancies, at 5.6 percent. However, in three of the past four quarters listed by the Census Bureau, that rate has hovered between 3 and 3.6 percent, significantly bringing down the city’s 12 month average, and its overall ranking in this list. Regardless, the 3.8 percent 12 month average still ranks Toledo as the fifth highest in the country for homeowner vacancies alone.

12-Month Averages:

Rental vacancy rate: 12.8%
Homeowner vacancy rate: 3.2%

It’s no secret that the Florida real estate market has seen better times — and the situation in Tampa appears to be getting worse. In May, RealtyTrac reported that foreclosure activity in the Tampa-St. Petersburg-Clearwater area rose by nearly 111 percent from May 2011, with one home in every 304 in foreclosure. The rental vacancy market has been following this downward trend, with the rental vacancy rate going up or remaining flat every quarter since the beginning of 2011.

12-Month Averages:

Rental vacancy rate: 15.5%
Homeowner vacancy rate: 1.9%

Houston is home to the nation’s third-highest rental vacancy rate over the past 12 months, standing at 15.5 percent. The city hit a three-year high for rental vacancies in 2009, when the rate rose to 18.4 percent in the third quarter of that year, according to Census Bureau data. However, Houston’s homeowner vacancy rate has been recovering, dropping below the average for the 75 largest cities for the past three quarters to as low as 1.1 percent at the end of 2011.

12-Month Averages:

Rental vacancy rate: 11.3%
Homeowner vacancy rate: 4.2%

Atlanta’s average homeowner vacancy rate is the third-highest among major U.S. cities, standing at 4.2 percent. Fortunately for Atlanta, the rate has been dropping since early 2011, when it stood at 5.4 percent. The trend for rental vacancies has been worse for Atlanta, however, rising from 9.4 percent in the third quarter of 2011 to 12.4 percent in the first quarter of 2012.

12-Month Averages:

Rental vacancy rate: 11.9%
Homeowner vacancy rate: 3.9%

Over the past five years, the Las Vegas housing market has experienced one of the country’s most dramatic boom-and-bust cycles. The city continues to feel the pain. At the end of 2011, Las Vegas ranked second in the country for gross vacancy rates, at 16 percent, and currently has an unemployment rate of 11.8 percent. 

In the past 12 months, Las Vegas’ rental vacancy rates have dropped from a high of 13.2 percent in the third quarter of 2011 to a low of 11 percent in the first quarter of 2012, the most recent number available. Although Las Vegas remains one of the most vacant U.S. cities, homeowner vacancies are a bright spot, dropping from 5.5 percent over the past year to 2.3 percent in the most recent quarter.

12-Month Averages:

Rental vacancy rate: 15.1%
Homeowner vacancy rate: 2.4%

With a rental vacancy rate of 15.1 percent, Virginia's capital ranks fourth among all major U.S. cities for empty rentals over the past year, with the first quarter of 2012 showing a 19 percent rental vacancy rate. However, Richmond’s homeowner vacancy rate ranks only 27th among the country’s 75 largest metro areas, and stands just 0.2 percent higher than the average for large metro areas.

12-Month Averages:

Rental vacancy rate: 16.9%
Homeowner vacancy rate: 1.7%

Detroit was one of the hardest hit cities in the recession, and with an unemployment rate of 9.9 percent as of May, it's little wonder that its 16.9 percent rental vacancy rate is the second highest in the country. Surprisingly, though, the homeowner vacancy rate remains below the 75 largest metro area's average of 2.18 percent. According to the Census Bureau, at the end of 2011, Detroit had a gross vacancy rate of 12.2 percent, a level the city has virtually maintained since 2006.

12-Month Averages:

Rental vacancy rate: 15%
Homeowner vacancy rate: 3.1%

Memphis's proportion of vacant homes, both owned and rentals, puts it third overall, thanks to an average rental vacancy rate of 15 percent that is the fifth highest in the nation and the 3.1 percent homeowner vacancy rate that ranks 13th.

12-Month Averages:

Rental vacancy rate: 11.3%
Homeowner vacancy rate: 5.4%

The good news is that Dayton's homeowner vacancy rate has been trending downward since its peak in the third quarter of 2011, when it stood at 6.5 percent.

However, even this improving number gives Dayton the distinction of having the highest average homeowner vacancy rate in the country, according to the Census Data. And Dayton’s average rental vacancy rate, at 11.3 percent, is higher than the 75 city average of 9.2 percent. The Census Bureau calculations put Dayton’s gross vacancy rate at 16.9 percent, more than 6 percent above the large city average, and the highest in the country.

12-Month Averages:

Rental vacancy rate: 18.8%
Homeowner vacancy rate: 2.2%

The emptiest city in the United States is Orlando, Fla. The 12-month average for rental vacancies stands at a staggering 18.8 percent, while in the first quarter of 2012 this number was 22 percent, highest in the nation. Florida's third largest city also has an above-average homeowner vacancy rate, but this metric has been rising during the past two quarters, according to Census Bureau data.

Despite its housing woes, Orlando has been able to avoid the financial woes of other cities, such as Harrisburg, Pa., and San Bernardino and Stockton, Calif. According to Orlando’s most recent annual report, the city has more than $125 million of cash in its general fund and over $1.1 billion in total assets (including nearly an additional $300 million in cash and cash equivalents in other funds), compared with just under $600 million in total listed liabilities.


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