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Razing Houses in Cleveland

Back in August of 2009 I suggested that the government should offer cash to burn down your house rather than take cars off the road in the cash for clunkers program.  It turns out that some communities have turned to demolition as a solution to the housing downturn:

“Gus Frangos runs the county land bank, created to put property back to productive use. But, 80 percent of the time, that first means demolition, $7,500 to level a place this size…

Land bank crews will pulverize 700 properties this year, the city of Cleveland, 1,000, to save sinking neighborhoods by eliminating the eyesores and, where possible, to put that land to economic use…

If you spend, say, $140,000 to bring back a house, all new mechanical systems, you’re going to sell it for maybe $90,000-$95,000. Unfortunately, demolition is much more cost-effective,  we have to do it.”

Watch the full episode. See more PBS NewsHour.

Read the article here.

And in Detroit the mayor has plans to destroy 10,000 houses by 2013 to deter crime:

Posted in Economics, Markets.

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