Amid foreclosure fallout, Cleveland area has hope

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Associated Press

Posted on September 29, 2013 at 9:00 AM

Updated Sunday, Sep 29 at 9:00 AM

CLEVELAND (AP) — Just before dinner on a warm fall afternoon recently, Cecelia Smith mounted a riding mower, steered it into the empty lot beside her tidy yellow house in the city's Slavic Village neighborhood, and roared into her weekly chore.

She carved long, shaggy rows from a field she does not own but cannot ignore. If the grass soars too high, field mice and garter snakes find their way into her basement.

Beating back the wilderness is part of life now on her small block in the thick of the city, where vacant lots outnumber occupied homes.

"People are trying. I'm trying," said Smith, 53, a plucky homeowner who parries the improbable with a soft chuckle.

"It used to be a beautiful neighborhood," she said, not finishing the thought; not yet.

Maybe it will be beautiful again.

Five years since a financial crisis mushroomed into the worst recession in 80 years, residents of Slavic Village, where harbingers of the disaster first emerged, have adjusted to an odd but effective new normal.

The neighborhood that gained infamy as the epicenter of the national foreclosure crisis has had five years to catch its collective breath. Residents are daring to hope again.

Power saws whir and hammers clang on streets where innovative recovery projects are breathing new life into haunted houses.

Neighborhood stalwarts, like Cleveland Central Catholic High School and Third Federal Savings, continue to invest and prosper.

New factories and steel plants have opened in a working-class enclave that always stepped to a time clock if not a polka beat.

But a renaissance faces foreboding obstacles. Blight runs deep on narrow streets of workingman cottages and bungalows, and there's not near enough money to fix everything.

Foreclosure rates have fallen since the peak of 2007 but they remain above pre-recession levels. Meanwhile, wholesalers continue to dump cheap properties on a saturated market.

In some parts of the neighborhood, a third or more of the homes stand empty, magnets to house flippers, squatters and drug boys.

Can Slavic Village be what it once was? No, advocates say. Too much has changed. Too many have left. But it can again be a community both convenient and safe, they insist, certainly affordable, and maybe a little bit cool.

"I mean, we're a low-income, blue-collar, gritty neighborhood and we like it that way," said Marie Kittredge, the executive director of the nonprofit Slavic Village Development Corp., the neighborhood's longtime champion. "But we want the young professionals to be curious, too."

Kittredge has lures to offer, like the new Cleveland Velodrome on Broadway, which draws bicyclists from far and wide.

Third Federal Savings, a bank founded in the neighborhood 75 years ago, is building a new neighborhood of $125,000 homes on reclaimed industrial land across from its headquarters. The first of 95 planned Trailside homes just sold.

The neighborhood's ethnic vibe may have faded, but the institutions of an earlier era endure.

Cecelia Smith and her 14-year-old son, Gabriel Walker, walk to his piano lessons at the venerable Broadway School of Music, which is supported by members of the Cleveland Orchestra.

Cleveland Central Catholic, which sends the graduates of St. Stanislaus elementary school on to college, just welcomed one of its largest freshman classes in years.

"It has a lot of amenities," Smith said of her neighborhood. "That's why I stay."

Slavic Village is actually a collection of neighborhoods with Warszawa, Little Warsaw, at its heart. The city's Broadway-Slavic Village Statistical Planning Area extends south from Interstate 490 to the southern city border, along the spine of Broadway Avenue. The neighborhood loops into the Industrial Valley, where ArcelorMittal carries on a century-old steel-making tradition.

The community nickname stems from a bygone era. Much of the Polish and Czech community is gone. Today, a little more than half the residents are African American. Renters come and go. Many landlords are absentee.

"We have to manage change and that's the huge challenge in front of us," said Cleveland City Councilman Anthony "Tony" Brancatelli, whose Ward 12 includes the neighborhood.

The Broadway-Slavic Village SPA saw its population plunge by nearly 30 percent last decade, an exodus spurred by the kind of financial pressures that few, if any, neighborhoods have seen before.

Taking advantage of Ohio's lax oversight of the mortgage industry, housing flippers and predatory lenders mastered their dark arts in Slavic Village, which offered an ample supply of over-valued housing.

Other weaknesses made the neighborhood vulnerable: a waning economy, naive homeowners, indiscriminate lending, high-interest subprime loans bundled for sale on Wall Street, greed and fraud.

In the summer of 2007, the 44105 ZIP Code — which encompasses much of Slavic Village — led the nation in foreclosure filings. Soon, journalists from around the world were flying in to see the roots of a spreading global financial crisis.

"All the bad behavior of the sub-prime sharks took place in Slavic Village in a big way," said Edward Hill, dean of the College of Urban Affairs at Cleveland State University. "It was mindless deregulation at work."

Today, more than 3,000 of the neighborhood's 12,000 housing units are empty. Between 300 and 400 houses need to be demolished, and soon, Kittredge said, lest they sabotage improvement efforts that are starting to gain traction.

On a recent afternoon, a crew of carpenters worked putting the finishing touches on a freshly-painted bungalow on East 54th Street off Fleet Avenue. They had knocked out a bedroom wall to expand the living room, straightened a crooked staircase and hung new cabinets in a gleaming kitchen.

The empty lot next door was now part of a newly-seeded lawn.

Contractors believe they can sell the house, once abandoned, for about $60,000. That would cover the cost of the renovation and leave a small profit to sink into the next house.

That's the strategy of Slavic Village Recovery, a novel program that aims to restore and sell 200 empty houses. Its bright blue-and-red posters festoon doorways and windows in the neighborhood like splashes of hope.

The $1 million-plus project is the idea of Forest City Enterprises and Robert Klein, the founder and chairman of Safeguard Properties, a Valley View company that maintains foreclosed properties for banks. The partners pooled money and expertise, and worked with nonprofit housing groups like Neighborhood Progress Inc., to begin to attack the stack of blight. Their approach calls for both renovation and strategic demolition.

"It's weeding out the bad, keeping and restoring the good, and restoring a neighborhood," said Jeff Raig, the project director.

At a press conference Sept. 24, Raig's team showed off a model home on East 54th and introduced the project's first buyers, a young couple engaged to be married.

The hammering, the new lawns and the new faces hearten neighbors like Laura Saunders, who lives with her husband in a house they own on East 53rd Street.

Saunders stole glances at the renovation underway as she prepared to paint her back fence.

"After so many years of looking at such horrible properties, to see something redeveloped, it brings hope back," Saunders said. "I just wish more people would step up."

Alas, just a short walk away, Slavic Village's scourge was on ready display. A triage team from the Recovery program judged 3648 East 54th beyond saving.

After the house was abandoned and foreclosed upon, squatters moved in, young men who used it to raise pit bulls.

In a weary voice, Brancatelli reviews the steps he takes to evict problem illegal tenants. "First, you get the water turned off... ."

They did not leave amiably. Everything that could be sold at one of the nearby scrap yards was looted or ripped away, including plumbing and wiring deep inside the walls. Part of the second floor has caved into the kitchen.

Walking out the front door of the doomed structure, Brancatelli yelled to a contractor still inside, "And can you secure the door again?"

A yellow excavator sat in an empty lot and the councilman smiled grimly to see it.

Brancatelli thinks much of the vacant housing needs to be razed. Maybe whole blocks. In some cases, he says, residential streets could become part of an adjacent industrial zone, allowing a job site to expand.

"Everyone wants to rehabilitate," he said. "But we can't do rehab without demo, or no one's going to buy."

CSU's Hill agrees. At an April neighborhood summit called by Slavic Village Development, Hill shared research showing the neighborhood had added about 200 manufacturing jobs in recent years at stamping plants, truck depots and steel service centers.

He thinks newly opened land could be used to encourage that trend, allowing business to add greenery or a warehouse.

"Housing-first strategies do not work," Hill argues. A neighborhood needs a raison d'etre.

Slavic Village grew up as mill housing for steelworkers who trudged to work in the valley below. Hill thinks residents could start walking to new jobs in the neighborhood.

Raig would expand that vision to include downtown commuters. He says Slavic Village could attract urbanites priced out of Ohio City and Tremont.

It's also still desirable, he said, to many who grew up in the neighborhood and may jump at a $450 monthly mortgage that the Recovery program can offer.

That was the case with Samantha Paizs of Brookpark, the newest homeowner on East 54th, where she once spent a lot of time at her grandmother's house.

The 28-year-old said she drove through the old neighborhood awhile back, past familiar churches and shops, and said to herself, "I would like to live here again. As soon as I walked into this house, I knew."

All of the success scenarios hinge on one dramatic act: the removal of the worst of the blight. And that's the multimillion dollar challenge.

In a new study, Frank Ford, a senior policy analyst for the Thriving Communities Institute, concludes that Cleveland has about 15,700 vacant properties on its streets and that 8,300 of those structures need to come down.

At $10,000 a demolition, that's an $83 million job.

"There isn't that kind of money" available, anywhere, Ford said.

For now and for a while, Slavic Village homeowners like Cecelia Smith are largely on their own.

She succeeded in getting two eyesores next door demolished, but city crews were slow to return to mow the new field. So she bought a secondhand riding mower for $500 off a lawn in Strongsville and taught herself how to use it.

She said the owner of the property on the other side of her house, who lives in Bedford, walked away from his responsibility when his tenants stopped paying rent. Its doors and windows are boarded.

In another of her new routines, Smith takes frequent walks around the house inspecting the plywood, looking for pieces pried away, fearful of squatters.

She's waiting for real neighbors to come back.

___

Information from: The Plain Dealer, http://www.cleveland.com

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