Too Many Vacant Lots, Not Enough Housing: The U.S. Real-Estate Puzzle

livemint.com:

CHICAGO—DaJuan Robinson was remodeling a house on the South Side, not far from the University of Chicago, when he spotted a vacant lot two doors away. He thought it might be worth developing. Then he learned about the back taxes, unpaid water bills and other hurdles that would take too much time and money to clear.

That was seven years ago. In March, he sold a triplex he had built on an empty lot nearby for $815,000, benefiting from county initiatives intended to encourage new housing on miles of blocks pocked with vacant lots. Despite a national housing shortage, tens of thousands of empty residential lots in Chicago, Detroit, Pittsburgh and elsewhere are beyond the reach of developers or kept vacant by owners because of legal and government obstacles that cities are now trying to knock down.

In block after block, occupied homes sit next door to vacant, weed-covered lots that have spread in hopscotch patterns across largely Black and Latino neighborhoods, depressing property values and property tax revenue. Neighbors say half-empty blocks draw crime. Declining populations and job losses in former industrial hubs left many big-city neighborhoods with a deteriorating housing market, which has been made worse by government policies decades out of date.

Cumbersome rules to resolve unpaid tax bills on abandoned lots keep away developers, and cheap tax assessments on vacant lots encourage owners to keep them off the market—perfect conditions for a downward housing spiral, according to officials seeking to resurrect the neighborhoods. “Vacancy becomes a disease, and it’s contagious," said Bridget Gainer, a Cook County Commissioner and chair of the Cook County Land Bank Authority. The land bank has helped put around 865 vacant