There’s a better place for that building than in the dump

Every year, Michiganders throw away more than 11 million tons of waste in landfills, according to a report conducted by the Michigan Department of Environmental Quality in 2013. Although recent years have seen an emphasis on improving recycling programs around the state, they have also seen federal dollars allocated to blight removal. Because the funding stipulates that a certain number of properties must be addressed in a short period of time, the actual result of that funding has meant that more building materials are ending up in landfills as well.

As of MDEQ’s fiscal year 2015 report, the amount of solid waste ending up in landfills had increased nearly a million tons, to just over 12 million. We have to ask ourselves: how can the state and federal authorities encourage more recycling and environmental sustainability, meanwhile pushing for the quick demolition of blighted properties?

There is a better way, and it has to do with deconstructing these blighted and abandoned structures. It takes more time, yes; it takes more money, yes. But the social, environmental, and economic benefits outweigh those costs.

The process of deconstructing a home requires more labor than simply demolishing it, and the materials must be sorted and processed, creating jobs. Those jobs generate taxable income, creating revenue for the state to spend on infrastructure improvements (like roads). Once the materials obtained through the process of deconstruction are sold, they pay for the process and also generate a net profit.

According to estimates by the Architectural Salvage Warehouse in Detroit, an average home costs roughly $35,000 to deconstruct. The value of the materials recovered from that home, like structural and architectural lumber, bricks, window frames and more, when resold is between approximately $45,000 and $90,000. That’s a potential 2:1 return on investment. Based on quarterly reporting by Step Forward Michigan, the median amount of assistance being provided by the Hardest Hit Funds to demolish a home, on the other hand, is roughly $10,000 – with none of that money being returned through material sales. An entire, sustainable economic sector could exist in Michigan if policymakers wanted it to. So why doesn’t it?

The MSU Center for Community and Economic Development is conducting a study of this potential economic sector, and has found that tipping fees (the cost to put garbage in a landfill) in Michigan are some of the lowest in the nation. There is also no policy addressing the use of recycled materials in new construction; by way of contrast, California requires that all new construction contain a percentage of materials from recycled content. If such a policy were adopted in Michigan, it would drive demand for those products, which would in turn increase the incentive for supply, making developers and contractors think twice before throwing unused materials in the garbage.

Another crucial component to this equation is federal funding. It should be no surprise that the money going to deal with blight has come from the taxpayer. We often think of federal funding as a beacon of hope shining down from the sky, like a savior. But let us not forget that the federal government gets its money from the taxpayer, and so it is often the communities affected by blight who end up having to pay to remove it.

And let us also not forget the consequences of blight on surrounding home values; a report by Temple University Center for Public Policy & Eastern Pennsylvania Organizing Project estimates that properties within 450 feet of an abandoned property lose anywhere from $3,500 to $7,600 of their value. And so the community ends up paying the price once again for those abandoned properties.

The current system for dealing with blight is an unsustainable one, relying on the taxpayer to pick up the pieces of economic crises. Policymakers and economic developers on the state and federal levels alike need to look closely at how these dollars are being allocated, the efficiency of their spending and the long-term effects of the activities being funded.

They also need to consider what policies may be contributing to blight, and how to prevent it in the future. This could look something like building developers or corporations paying an up-front tax for the removal of their structure once it has reached the end of its life cycle; but that is a conversation for another day.

Bridge welcomes guest columns from a diverse range of people on issues relating to Michigan and its future. The views and assertions of these writers do not necessarily reflect those of Bridge or The Center for Michigan.

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Comments

Edward Smith
Fri, 07/15/2016 - 1:07pm
Excellent article. Deconstructing abandoned buildings and recycling the materials seems like a cost-effective option with a lot of advantages for both the local community and taxpayers. Hopefully our leaders will more often take the long range view in their planning and decision making.
John Saari
Sun, 07/17/2016 - 7:34am
I had torn down hundreds of houses in Cadillac, Mi using many routes. The best was buying the structure from the State and then doing what you want with it. Recycling center/Homeless Shelter/Meals on Wheels Kitchen. Community Pay it Forward Volunteers
John Reddy
Sun, 07/17/2016 - 10:24am
Informative. Thanks!
duane
Mon, 07/18/2016 - 9:10am
As well as the idea of recovering and reselling materials and cost from dilapidated houses sounds I am interested in the details. With materials such as copper and steel at very recycle prices, with new and better materials of construction, with labor cost rising I would like to see how and how much each part of such a recovery plan delivers on dollars. Ms. Ross indicates a minimum 28% profit margin on average for deconstruction of blighted or abandon houses. If she included cost avoidance of landfill space, we need to know that value, it would seem that there would be a sufficient profit margin for private companies to form and compete for the work. [I would interested in investing in a low capital business that could at a minimum earn a 20% profit margin.] The MSU Center for Community and Economic Development will need to do a rigorous study that is base in real time data, how the house are acquire and associated liabilities (insurance) and sale of the lot, the legal limitations (such as handling and disposal of lead paint, asbestos, other contaminants), permitting, work area access control, the volume and price for recovered and resold and recycled materials by type, labor (types of skills, hourly cost including benefits, hours worked, administrative support), etc. The claims sound good, but as I have heard is 'the devil is in the details' and that is where much skepticism will reside. Ms. Ross and the Center has a long history of over promising ideas being offered by those who won't be risking their moneys to deliver on the idea. I would like to see this concept work, even in our small town we had a few houses that ended up in the dump in the past year at City expense.
Lauren Ross
Tue, 07/19/2016 - 1:07pm
Duane, MSU CCED is doing a "rigorous study that is base[d] in real time data." If you would like to learn the results of this study they will be available at domicology.msu.edu when the report is complete. In terms of cost avoidance of landfill space, the benefit is not necessarily measured monetarily. Land is a nonrenewable commodity; at the current pace, we will eventually run out of places to put our trash, and our forests, rivers, and lakes will be polluted beyond safe usage. I could argue that when that happens, the cost to import all of our resources (water, clean air, lumber) will be far beyond the current investment in deferring materials from the landfill. I am not sure what you are referring to when you mention my and the Center's "long history of over promising ideas," but you are more than welcome to send us an email at ced@msu.edu with any issues you'd like to discuss.
duane
Wed, 07/20/2016 - 1:58am
I apologize, I omitted 'being part of' "a long history of over promising ideas being offered by those who won’t be risking their moneys to deliver on the idea." That was my omission and I deserve being criticized for it. It falsely suggested information I have no knowledge and implied actions on your part and that of the Center that were shown to be true. Again I apologize and if I had the capacity to remove that part or the whole of my comment I would. It is inexcusable to not properly proof read any comments that might be construed to bring your's or anyone character into question. I will not even make an effort to explain what I was trying to convey, I did a poor job of writing and any remarks other than an apology would be inappropriate. Ms. Ross your writing skills are very good and you are obvious far better at accurately saying what you mean.
Mon, 07/18/2016 - 11:47am
How about getting these homes back into the hands of our citizens? Perfectly good homes are being razed because they are VACANT only, left over by the sub-prime mortgage meltdown. Our tax dollars are being wasted! Half of Jackson, Detroit and Flint rent. We need to get home ownership back to the neighborhoods for stabilization!
Tue, 07/19/2016 - 12:56pm
Thank you for your comment Susan. Unfortunately, vacant homes pose a safety risk to the community, attracting squatters and scrappers. The longer they sit, the more run-down they become, affecting nearby home values, as mentioned in the article. Obviously home-ownership is a priority, but the housing stock is much higher than the population, which has decreased significantly since the recession began. Another possibility posed to me today: what about relocating the vacant houses? A possibility, but significant costs without a possibility of return on investment.
Mon, 07/18/2016 - 12:07pm
From the Brooklyn Exponent, Brad Flory special writer: Jackson city government has snapped up 42 more houses with unpaid taxes so it can tear them down. Exercising its right to bypass the usual public auction, the city took 25 houses in the tax-forecloser process in May and 17 in June 2016. The cost for all 42 houses was $230,493 the amount of back-taxes owed since at least 2013. When those structures are razed, the number of houses removed in City Hall's five-year demolition effort will number about 600. "Many of these houses have been vacant for many, many years, said City Manager Patrick Burtch. Since receiving the H4HH grant, Jackson City Government has take 95 houses through the tax-foreclosure process in 2015 & 2016. Houses demolished are classified as vacant, but they are not necessarily empty when City Hall decides to tear them down. This spring, city leaders delayed a month before claiming the final 17 houses on their list because "they're waiting for my office to evict the tenants," Jackson County Treasurer Karen Coffman reported to county commissioners in early June. Michigan's tax-foreclosure system was created in 1999. State and local governments can take property before the auction if it's needed for a PUBLIC PURPOSE. Jackson's public purpose for 42 houses is demolition.