After years of decline, Cleveland aims to go green

CLEVELAND (Reuters) - Orchards and vineyards may soon spring from the blight of thousands of abandoned buildings in Cleveland, a city struggling to rise from years of decline and home foreclosures.

Once a proud manufacturing powerhouse, Cleveland has lost nearly 10 percent of its population since 2000, the fastest drop of any U.S. city except for hurricane-hit New Orleans.

The city which was once America's fifth largest now ranks 41st in the U.S. Census with a population of 433,748.

"The first thing we must do is stabilize our housing market," said Jim Rokakis, treasurer of Cuyahoga County which includes greater Cleveland. "Then we'll need to work out what to do with all the vacant land we'll be left with."

The county has 36,000 abandoned homes that are a magnet for crime. As many as 18,000 must be demolished at a cost of several hundred million dollars. Proposals for the empty land include orchards and vineyards to help property prices recover, as few expect the city's population decline to reverse.

"This isn't a market for new housing," said Mark Seifert, executive director of local nonprofit the East Side Organizing Project. "And it certainly won't be in my lifetime."

Cleveland is in Ohio, a Midwestern state that often decides presidential elections. President Barack Obama won the state in the election nine months ago but his popularity has suffered in the face of rising unemployment.

It will likely be a key battleground in the U.S. Congressional elections in 2010.

The city was on the front line of the U.S. housing crisis early. It suffered from loose lending before most cities did. So recent statistics can be misleading.

According to RealtyTrac, the city's foreclosure rate fell out of the top 50 metropolitan areas in the first half of 2009. But Rokakis said after 90,000 foreclosures since 1999, there is only so much bleeding Cleveland can do.

"The rest of the country has caught up with us," he said. "We Americans have created a throwaway culture. And we've just thrown away several million homes."

UNEMPLOYMENT

Cleveland's crisis is far from over. Foreclosures now stem more from unemployment than from lending practices.

"The foreclosures related to predatory lending have abated somewhat," said Bill Faith, executive director of COHHIO, a nonprofit umbrella group. "What we're seeing on the ground now is more foreclosures related to economic hardship."

Seifert said that low interest rates have also spared home owners with adjustable rate mortgages from spiking payments.

"But interest rates can't stay low forever and when they go up we'll see another wave of people in trouble," he said. "We're not out of the woods yet."

Thieves strip abandoned homes of everything of value -- such as pipes and copper wiring -- rendering them uninhabitable. Squatters move in, as do criminals.

U.S. Federal Bureau of Investigation data show violent crime in Cleveland fell in 2008, but murders and arson rose.

Abandoned homes are also a headache for Seifert, whose agency tries to save stricken homeowners.

"It's much harder to keep someone in their home when 20 empty houses around them are plagued by arson and crime," he said. "Apart from anything else, it hurts property values."

According to the National Association of Realtors, in the second quarter the average home price in the greater Cleveland area was $106,000, down from $134,400 in 2006. But NAR spokesman Walter Molony said Cleveland's price data were skewed by virtually worthless property in blighted neighborhoods.

Residents such as Barbara Anderson in the blighted neighborhood of Slavic Village have formed clubs to save their communities. Anderson's "Bring Back the '70s Street Club" has planted a garden on four empty lots and patrols the area.

"We've come a long way, but we're not done yet," she said.

GOING GREEN

Rokakis said Cleveland will issue bonds for $50 million over the next few months and start buying up and demolishing derelict homes in the first phase of the city's redevelopment.

Local groups want to revitalize that empty land.

"There is no silver bullet to the foreclosure problem," said Bobbi Reichtel of Neighborhood Progress, which raises money for community projects. "But we can get out in front to find a way to mitigate the problem."

Applications for Neighborhood Progess-funded pilot projects are heavily focused on agriculture, including market gardens and plants for biofuels. Reichtel wants to emulate the Pennsylvania Horticultural Society's Philadelphia Green project, which has turned empty lots into green space in that industrial city since 2003.

"We've found if you do about 30 percent of lots you reach a tipping point where investment comes into a neighborhood," said Bob Grossman, Philadelphia Green associate director.

Grossman cites a study by University of Pennsylvania professor Susan Wachter saying projects like this can boost property values 25 percent.

Terry Schwarz, senior planner at the Cleveland Urban Design Collaborative of Kent State University said the challenges Cleveland must overcome to turn green include dealing with lead in the soil in some areas caused by the lead content in old paint and heavy traffic before gasoline went lead-free.

But Schwarz added that green space in the place of derelict homes could stabilize the city's property market.

"You can buy many properties in the worst-hit areas for pocket change," she said. "If we can bring a sense of stability to those areas, perhaps we can recapture some lost value."

(Editing by Peter Bohan and Howard Goller)