Urban Homesteading

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While applications come in from prospective buyers, the city decides what repairs will be necessary to bring each piece of property up to building code specifications, and prepares an estimate of the costs that will be involved. The applicants for each property are evaluated—with particular emphasis placed on their ability to pay for the rehabilitation—and the successful homesteader is finally chosen by a lottery.

NEW WINE IN OLD BOTTLES

The next step in the process is the selection—by the owner-to-be—of a contractor ... who prepares a bid which is submitted to the future occupant of the house and to the Department of Housing and Community Development. If both the homesteader and the city approve the bid, financing is arranged . . . fire insurance is obtained . . . and the applicant receives a lease on the property.

When a federally owned property is involved, the homesteader must occupy the dwelling for 3-1/2 years . . . including a six-month period that's allotted to bring the house up to code. City-owned properties must also be brought up to code within six months . . . but the further occupancy called for is only 18 months.

At the end of the required time period—assuming that the renovation has been completed and all the water, gas, and electric bills have been paid—the homestead er puts down his or her dollar . . . the city transfers title to the property to its new owner ... and the loan that made the renovation possible is rolled over into a mortgage.

While the rehabilitation is under way, city inspectors make frequent visits to check the quality (and progress) of the contractor's work . . . and the transfer of title takes place only after the reconstruction has been done to the satisfaction of both the homesteader and the DHCD.

PAYING THE PRICE

The "dollar house" is a catchy concept, but obviously it doesn't reflect the actual costs of urban homesteading. Typically, city-owned dwellings—most of which were rental properties before they were seized for back taxes—require almost total renovation: Sometimes this includes all-new electrical, plumbing, and heating systems . . . a new roof and interior walls . . . major work on ceilings and floors . . . and even complete kitchens and baths.

Often, exterior work (such as cleaning, painting, pointing or replacing brickwork, repair of sidewalks, and—occasionally—connection to sewers) is also required. Clearly, such jobs can be expensive: The average rehabilitation costs of a Baltimore city-owned property can run between $25,000 and $45,000, depending on the amount of custom work above the code requirements that the homesteader decides to undertake.

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