Continued...

Crash

By 2008, things were completely different in Atlanta and across the country. Pittsburgh had become a poster child in metro Atlanta for mortgage fraud, mortgage defaults, and foreclosure. According to a study conducted by the Annie E. Casey Foundation that compared foreclosure activity in Pittsburgh with the entire city of Atlanta, Pittsburgh exceeded comparable jurisdictions in every foreclosure category. At the time, about 40 percent of Pittsburgh mortgages were estimated to be underwater, and the study estimated that 50 to 75 percent of default notices resulted in a borrower losing the property. An alarmingly high share of foreclosed homes (31 percent) were essentially new construction—having been built in the previous five years—double the citywide figure. Many of the homes were clustered on the same blocks. The study concluded that these homes probably reflected widespread property flipping and sales fraud involving high-risk loans, loose underwriting, and inflated appraisals. Rampant speculation by unscrupulous investors appeared to be at the core of Pittsburgh’s housing collapse.

The high rates of default and foreclosure led to high rates of vacancy and abandonment. More than 50 percent of Pittsburgh’s 1,800 parcels were vacant, a problem so overwhelming it was hard to know where to begin with remediation. To deal with the extraordinary demands of planning and managing this kind of sprawling, scattered site project, SNDSI immediately began to develop the internal capacity to build a GIS platform and dynamic database that permits its staff to continuously monitor the physical condition, market status, and ownership particulars of every parcel in the Pittsburgh community. Through a detailed process of mapping and analysis, SNDSI staff, with support from consultants, determined that the acquisition, renovation, and occupation of at least 300 to 400 properties would be required to ensure stability and sustainable neighborhood growth. From that assessment, four goals were adopted to guide the revitalization effort:

1. Acquisition, rehabilitation, and disposition of foreclosed and abandoned properties in targeted areas, returning them to market as affordable rentals or owner-occupied housing depending upon market conditions.
2. Land banking acquired properties to allow for a comprehensive master planning and disposition strategy.
3. Demolition of blighted structures to remove ruins posing public safety threats or providing harbor for criminal activities.
4. Redevelopment of vacant lots to increase the inventory of affordable housing.