Urban areas with high concentrations of vacant lots create a multitude of problems for communities, including decaying buildings that attract crime, pose environmental hazards, and lower the value of adjacent properties. After decades of watching chronically neglected properties adversely affect urban neighborhoods, the city of Wilmington, Delaware, devised a program to deter ownership of vacant property.
The Vacant Property Registration Fee Program, started in 2003, assesses annual registration fees for all properties that are vacant for over one year on a sliding scale based on the total number of years that the property has been vacant. The fees begin at $500 for the first year of vacancy, and increase significantly each subsequent year. As of 2007, the maximum fee for ownership of a vacant building was $10,500 in a single year-the property had been vacant for 21 years.
With legal support from the state, the city assesses the fee as liens against the real estate, which property owners cannot avoid if they intend to sell or otherwise use their land. Those who try to evade the process are subject to additional fines and may even face criminal charges. Finally, properties with excessive unpaid fees are put up for sheriff sale, making them available to people or organizations interested in rehabilitating them.
While other municipalities, notably Kalamazoo, Michigan, do charge administrative fees on vacant properties in order to keep them code-compliant, such programs fall short of providing an incentive for owners to occupy, sell, or demolish vacant lots.
Wilmington's program, in contrast, has active community development as its top priority, aiming to reduce the number of vacant lots and to build stronger neighborhoods. In the first two years of the program, the number of vacant properties in the city decreased from 1455 to 1135, a 22 percent drop over a very short period, especially when compared to the length of time many of these lots had remained unused. Since the program began, property owners have spent over $31 million in property renovations and new construction, and more than 1,000 units of affordable housing have been built in areas that previously suffered from a critical shortage of livable space.