Rust Belt City’s Pitch for a Hot Housing Market: Free Homes

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Mr. Shorraw is the mayor of Monessen, Pa., a small city set in a curve of the Monongahela River, which has hundreds of vacant homes. Many of them are in disrepair and have accrued thousands of dollars in back taxes. Property values are low. It is easier for owners to walk away than to sell.

So Mr. Shorraw extended an open invitation earlier this year: Find a vacant house in Monessen—not difficult considering they make up about 10% of the properties. Track down the owner and ask her to sign the place over. Many are happy to wash their hands of the house and the back taxes. Mr. Shorraw’s administration will clear the taxes if the new owner commits to giving the house a face-lift.

“It’s like hitting the reset button for these properties,” said Mr. Shorraw.

Roughly 1.3 million houses, or 1.4% of U.S. properties, are vacant, according to Attom Data Solutions, a real-estate data firm. Some long-neglected areas are riding the housing boom’s coattails. Mr. Shorraw is betting that the same thing can happen in Monessen, and that the lure of free homeownership can help reverse decades of disinvestment.

Monessen’s home values have risen 21% over the past year, but the city has a long way to go. A typical home in the city is worth around $80,000, roughly a quarter of the typical home value nationally, according to Zillow Group Inc.

Other cities facing hard times have turned to a similar playbook over the past half-century. Land banks like the one in Detroit have been auctioning off vacant homes for years at rock-bottom prices. Buffalo, N.Y., and Gary, Ind., have tried selling them for basically nothing. Struggling villages in Italy have tried to lure foreigners by auctioning abandoned homes for about a dollar.

Monessen mayor Matt Shorraw tours abandoned homes.

It can be tough to revive a local economy when the housing stock is in disrepair. At the same time, it is challenging to attract investment to the homes unless the area is already an economic draw for residents.

“It always comes back to economics,” said Alan Mallach, a senior fellow at the Center for Community Progress, who focuses on the revitalization of cities and neighborhoods. “Do enough people want to live in this place to make it work?”

It often costs more to rehab run-down homes than many new owners expect, he added.

Monessen, about an hour south of Pittsburgh, was once a vibrant steel town. But the factories have been shut for decades. The city’s population has dwindled to just over 7,000.

The city picked up a reputation for gangs and drugs, Mr. Shorraw said. Some sidewalks went almost 50 years without being replaced. The volunteer fire department now has to fundraise for new equipment.

An antique map of Monessen.

In 2016, Donald Trump, then a Republican presidential candidate, used Monessen as a backdrop when he promised to bring back American manufacturing. The factories haven’t returned, but Mr. Trump’s appearance led Mr. Shorraw, now 30, to run for mayor. Mr. Shorraw, a Democrat, was elected in 2017 and is near the end of his four-year term.

He is a local history buff who grew up in town with his grandparents and watched as the last of the steel industry left. Before his political career, he worked odd jobs, and continues working as the assistant band director at Monessen High School.

So far, his program has found new owners for about four dozen residential and commercial properties, he says. Demand has been split between investors and owner-occupiers. Monessen requires new owners to spend three times the back taxes that the city forgives on rehab. The city also requests the school district and county to clear their own unpaid taxes, which they have generally done, according to John Harhai, the city administrator.

Mr. Shorraw has worked his personal connections to make some transactions happen. His second cousin, Jenna Sivak, is one of the new owners. She grew up nearby in Belle Vernon and now lives in Pittsburgh, though her grandparents are from Monessen. With Mr. Shorraw’s encouragement, she took a spin through the city and found a Victorian that was more than 100 years old.

Just getting into the house was tough. There was no key, so she got permission from the owner to climb in through a second-floor window. “It looked like a tornado had gone through,” Ms. Sivak said.

But she liked the house, and the price was right. The owner agreed to sign it over if Ms. Sivak handled the details. Michelle Walpole, the previous owner, said she and her family left the house in 2018 to move to Tennessee. The tax bills never reached their new home and back taxes accrued, she said, which complicated her own efforts to buy earlier this year. She messaged the mayor on Facebook, offering to give away the house.

The city completed the transfer in the spring. Now Ms. Sivak is doing the demo work herself. She peeled back the 1970s décor to reveal two hidden fireplaces, tiling and hardwood floors.

Mr. Shorraw hopes that the remote-work boom, and the migration it has spurred across the country, will be a draw for those considering Monessen. The city has a walkable downtown, empty buildings and all. Hiking and white-water rafting are a short drive away.

But there’s no convenient public transportation into Pittsburgh, which makes it a tough sell as a bedroom community. To become an economic magnet once again, the city needs jobs. “That’s the missing piece to the puzzle,” Mr. Shorraw said.

That may be up to the next mayor. In the spring, Mr. Shorraw lost the Democratic primary that typically decides who will be mayor. He is launching a write-in campaign while also preparing for a loss, pushing through as many transactions as he can before this term ends in January.

Ron Mozer, who won the primary, said he approves of transferring ownership of the homes, but that there are better approaches to clearing back taxes and liens.

Maria Marquez picked up one of the vacant houses. She arrived in the area after Hurricane Maria forced her to leave her home in Puerto Rico and now works as a nurse’s aide. She went looking for houses after she saw one of Mr. Shorraw’s Facebook posts.

She found a three bedroom that she thought would be a good fit for her family of five and reached out to the owners.

Geno Sedlak and his four sisters had been owners of the house since their mother died in 2013. None wanted to live there, and they never went to the trouble of selling, Mr. Sedlak said. Unpaid taxes accrued. The siblings agreed to give the house to Ms. Marquez.

Ms. Marquez asked her contractor to put in about $10,000 worth of work to start, and she will save up to finish the rest. She estimates it will cost about $25,000 all told.

Mr. Shorraw is savoring the small signs of progress.

“It’s nice to see a neighbor buy a house and all of a sudden the grass is cut,” he said.

Write to Ben Eisen at ben.eisen@wsj.com

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