How Baltimore's Mayor Is Fighting the City's Vacant Housing Crisis

Introduction

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Podcast Introduction

1:41Hello, and welcome to another episode of the All Thoughts Podcast. I'm Tracy Allaway. And I'm Joe Weisenthal. So, Joe, we are here in Madrid as part of Bloomberg CityLab. Tough, tough assignment for us. I know. I know. A real hardship posting. Yeah, a real hardship posting, but willing to do it. Yeah. So, there are mayors from all over the world here, all talking about the challenges

2:12and opportunities facing cities. And we're about to speak to one of them in particular. And it's actually a really interesting test case of, I think, a lot of themes that kind of touch on the odd lots oeuvre, let's say. Well, one of the things that comes up all the time, obviously, on odd lots over the years is housing, right? And one of the things that we've discovered, I would say, is, okay, it's easy to say housing is a stress everywhere. Housing is a challenge. There's a housing crisis and so forth. And

2:44it's kind of true. But as we've discovered, there's a different fingerprint of it everywhere, right? That's right. So, you know, we go to, we were in, you know, Mount Airy, North Carolina, and it's very sparse and rural. Even there, there's a housing shortage, et cetera. Everywhere, there are these common themes, but every location has its own distinct challenges.

Baltimore Housing

3:02Right. So the city we're going to be talking about today is Baltimore. And in Baltimore, one of the issues with housing is this vacant housing problem. And I got to say, I actually feel really bad about this. My dad was a pilot, as you know, and he flew out of BWI for many, many years, but he lives in Annapolis. So I never actually spent that much time in Baltimore, except to get the Greyhound bus and go to the Baltimore bus terminal. And I would not want to judge any city based on the Greyhound terminal, but I definitely saw a lot of vacant houses

3:34around the area. Yeah. I haven't spent a ton of time in Baltimore either. You know, I was born in Detroit. I have a lot of family there. Also a city that sort of famously for a long time had a lot of vacant houses. You know, there were times when, you know, you see these websites advertising houses for a dollar, et cetera. It was like, there's clearly so much potential in a place with such, you know, at least nominally affordable homes. So like, how do you actually get people to move in? How do you make them valuable? How do you fix them up? So many, I guess, interesting technical questions, I would say, to solving these problems.

Mayor Brandon Scott

4:08Exactly. So we do, in fact, have the perfect guest. We're going to be speaking with Mayor Brandon Scott, who is, of course, the mayor of Baltimore. So Mayor Scott, thank you so much for coming on All Thoughts. Thank y'all for having me. Great to be here. In Madrid, no less. In Madrid. In Madrid, I know. Tough assignment for all of us. Second best city in the world, I take it? Second greatest outside of Baltimore. That's right. So when you became mayor of Baltimore, I'm really curious, how did the vacant housing problem actually show up on your radar and why did it become a priority for you? Well, for me, it showed up on my radar the day I was born, right? So I was born and

4:43raised in Baltimore. I was born in 1984. So I had the fortune or misfortune of growing up in the 80s, 90s, and 2000. When you think about all of the crazy things that happened in the United States at that time, of course, we're talking about drugs showing up into neighborhoods, the war on drugs, failed war on drugs, and zero tolerance policing. But I also live in the city that is the birthplace of racial redlining. It was signed at the very desk that I sit in. The first realigning law was signed in Baltimore City. I grew up on a block with a vacant house

5:14that my dad made me and my brothers cut the grass at every single time because he said, by the time the city gets around to cutting it for the owner, it's going to be a foot high, right? So for me, this wasn't something that I discovered when I became the mayor of Baltimore. It had been very prominent in my neighborhood that I grew up in, in Park Heights and all over the city of Baltimore for a long time. But I knew it had to be a priority because you cannot and we will not be the best version of Baltimore if we are not a whole version of Baltimore. And when you think

5:45about it like this, when I was a junior in high school in the year 2000, December of 2000, Baltimore had 16,000 vacant properties, right? Wow. And that's a lot less than the 30 or 40,000 it had years prior to that. But when I became mayor on December 8th of 2020, Baltimore had 16,000 vacant properties. The number essentially had not moved. So we knew that we needed a different strategy to dealing with this longstanding challenge. That is, you can directly, I showed this at CityLab, I'm a map and a data guy, right? When you look at

6:19the 1937 racial redlining map in Baltimore, and then you look at the vacancy map in 2020 or even the vacancy map today, it's the same neighborhoods, literally the same neighborhoods. In Baltimore, we, they call it the black butterfly and the white L. So you got this white L that goes down the city and out, and then you have these two heartbeats, so to speak, of the black butterfly, the wings. And you can see that the vacants in Baltimore are a direct correlation to that, direct correlation to

6:51purposeful disinvestment into those neighborhoods and all the other things, de-instructuralization, all of those things that happen. How would you describe, okay, everyone can recognize that having lots of vacant housing is a very serious problem for a city. You recognize it from, as you said, the moment you were born growing up. Prior to your administration, what was the sort of status quo thinking about it? What was the way that prior administrations had thought about the challenge or the problem?

Prior Administrations

7:19Well, listen, I have to say that my predecessors, with the tools and knowledge and understanding that they had, they didn't do a bad job, right? The only thing that I'd say that they did, that I do differently and thinking about it differently is that for, and this is just, this is mayors, this is politicians, right? Folks like to tell folks that I'm going to handle this issue in my time in office. There's no way in holy hell that any mayor was going to eliminate a vacant housing in Baltimore in four years, let alone eight in a lot. Some of them, many of them before me got a lot less than even

7:52four years, right? So when you think about that, the approach for us, it has never been about the approach. Baltimore, between our city government partnership with the state government, with our private community, with the folks in philanthropic and CDCs and developers, they've always had the strategy. They always had the know-how and the do-how of taking vacants and even demolishing them, turning them to park space, getting them renovated, building a lot of housing, all of those things. It's been about the capital. That's what they did not have. They didn't have the capital and they did

8:25not have a unified strategy that was about something greater than one mayoral term. And I think that's where we have struck goals, so to speak, is that we came out and I stood with the community and BUILD, which is a community organization that has relationships with churches and communities and mosques and everything all over the city of Baltimore and represents a lot of residents and neighborhood leaders in our business community and the greater Baltimore community. And myself stood up

8:56and said, we are coming up with this strategy that we, as in Baltimore, as a community, not just city government, not just private, not just philanthropic, not just the residents, we are going to end this crisis for good over the next 15 years. And this strategy is our strategy so that everyone is bought in. That's the difference. And now that we're all working together and then we got a blessing a few months later. We got a governor elected and now the governor of Maryland is also a member of that,

9:27right? The state of government has given us $50 million a year. So now we've been able to, just think about that. I told you it was $16,000 for 20 years, right? So it went from $16,000 when I took office now down to $11,806 as of early this morning. Do you get a daily report on that? I have a dashboard. It's a website. You can go look. It's reframe Baltimore. We'll tell you how many, right? And the number sometimes fluctuates because we take some off, some go up,

9:58but it's that collective way that we've done it. Because it's a very, very tough issue for even people to understand. You mentioned like dollar houses. People are like, well, if you sell all the vacants for a dollar, they'll go away. No. Because one, the overwhelming majority of the vacants in the city of Baltimore are not owned by the city of Baltimore. They're owned by private folks who are sitting on the mold, folks that we have to track down. And many, I hate to say this, a good bit of them were ones that back in the day, one of my predecessors sold for a dollar.

10:28But if I sell you a house for a dollar and you don't have the $100,000, $150,000 needed to actually get it up to living standards, it's still going to remain vacant.

Vacant Houses

10:37Well, so on this note, I want to back up for a second and ask what is potentially a very basic question, but how do the houses actually become vacant? Like what is the typical process by which a house becomes vacant? We've heard the population decline story in Baltimore, but like, it's hard for me to believe people just leave and don't do anything with their houses. So it's a couple of things. One, the thing I can tell you about Baltimore that is probably so much different than any other city is that we're a city of neighborhoods, right? And I literally

11:11tell people this, that those neighborhoods can literally be a city of countries. Not two blocks are the same. Everything is different. That's why our strategy is block by block. But just to give you the historical context, we know that we got a lot of vacants when suburbs were built, right? Like we had suburbs being built, white flight, all of those things happen. That happened in cities around the country. So we had that. Then we had deindustrialization. We had Bethlehem still and General Motors. General Motors is actually the reason why I am here because my mom's

11:44parents moved to Baltimore. My granddad, when they were down to their last $100, was thinking about moving back to rural Virginia, got a job at General Motors and boom, they bought the house where my mom grew up in and my dad who was following my uncles, his older brothers and older cousins to Baltimore visiting in the summertime. My uncles were working at Bethlehem still. Him and my mom met and the rest is history. But those went away. Those jobs went away, right? And then some people did leave. And then

12:15when you add on to that, that a lot of folks that left, left those houses and they left their houses and people died, right? Older folks died. They left them to people who didn't care for them. You had a lot of folks come in and buy up property that were vacant when people did move out and just sitting on them. They're just waiting for prices to recover. They're just waiting for the city or someone to come along and give them more than what they paid for, right? But then you have, we have a lot of folks who pass away and their kids are gone and they don't want the property. It runs the gamut. There is not

12:48one sole reason why you have so many. But when you think about, we were a city of basically a million people and now we're a city of 600,000, right? You think about the amount of people that lost, that left the city of Baltimore for a multitude of reasons. And then when you add on to that redlining, deindustrialization, crime and violence and drugs that just showed up out of nowhere all of a sudden, you add all of those things together, you have really a recipe for disaster, so to speak.

13:18You said something that it must be a tricky issue because, okay, let's say, and I want to talk more about this, but you get this infusion of capital or you get this coordination of capital and suddenly the governor is willing to work with you and allocate money from the budget. But presumably, yeah, I imagine you don't want, you want private capital, but you don't want entities who are just going to take the public money to see their properties inflate. So how do you think about coordinating that so that you get that private capital, you get the investment capital, but it's not just

13:52essentially a free lunch of, okay, we're going to do whatever you want. Right. Yeah. Yeah. So that's where the- How do you get that skin in the game? That's where the block by block comes in, really. So we do block level planning for these, but it's also about strategic. We have strategic investment zones, seven of them where mostly the vacants are. And what we're telling folks is, is that we have a plan for each block and we don't just do big developers. We work with small developers. We work with community development corporations. And the great thing about the city of Baltimore versus Detroit, where folks are like, oh, you guys should

14:26create a land bank like Detroit. Well, we visited Detroit and they're like, well, you guys don't need to do that because your housing department has the authorities that our land bank has now. We didn't have that within the city of government. And now what we've been able to do, because also it's not that easy to get to the point of getting a vacant back to renovation. So I'll step back and walk you guys how this works. You own a house that's vacant. And then our housing department, our inspectors come out, someone complains, there's a vacant house to me, the owner's not taking care of it. We give them a

15:00citation. They have 30 days to remedy that citation. We literally legally can't do anything. For that time frame. Then we come back again and we have to do it. Now, after that one, then we maybe cut the grass, lien it, et cetera. We have raised the fines up. We can fine them up to a thousand dollars. Then they get a vacant building notice. Right. And if we want to take that property through receivership and all these other things in room, we have to go to court. They know how long that takes. That could take, you know, it used to take two to three years. Right. Now we've worked with

15:34the court. We have a special in-rim docket. Right. And we're getting that time down a lot faster, but we're doing that thousands of times. Right. Over and over again. And when you're talking about that takes the time to assemble blocks. Right. Now think about this block, 4,800 block of Park Heights Avenue. Right. So the Park Heights master plan is the neighborhood I grew up in. It's one of the largest redevelopment issues in the country. Think about it like this. They started talking about the plan when I was in middle school. Right. The city finally was able to have all of the properties

16:08acquired when I was a staffer in city government and on the board of their CDC in 2008 and 2009. We finally had them all demolished around 11 or 12. The first new housing units didn't get built until I was mayor. Right. When you talk about those large amounts of vacant properties, it just takes a long time. Single ones, you can replace them a little quicker. And it takes a lot of block by block level planning, identifying a developer, making sure the developer fits with

16:43the neighborhood, making sure that we have the partnership with the state because they also have their sway and control over the money that they're pumping into. Everyone has to be aligned and making sure that we are not just giving it to people who just want to make a buck, but they understand that, yes, we want them to make money. We believe in capitalism, but they have to understand how this is going to work to improve those neighborhoods. And we've seen so many neighborhoods take great, great, great chains, like Johnson Square in East Baltimore, Oliver in East Baltimore, where they used to film The Wire. And now they're selling houses over

17:17to like $300,000. I was wondering how long until we reference The Wire. Yeah, you know, it's going to happen eventually. Yeah, it had to happen. So same- I'm blessing at a curse, I imagine, for us. Mainly a curse for us, but yes, mainly a curse for us. We don't like this show at all. Oh, really? Wait, no. Can we just change the entire subject of this interview and have you go off on The Wire for a while? I guess for us, we understand it and we appreciate it for the storytelling. But people don't look at NYPD Blue and think like, oh, this is all New Yorkers about. Right, I see what you're saying.

17:51That's what I'm saying, right? And for us, we've only had those shows, right? So we had The Wire, we had The Corner, we had Homicide Life on the Street. Now when they maybe do a complete Baltimore story on a show, HBO, hint, hint, like maybe we can talk about that. Because in New York, we have Seinfeld and Friends and all these other versions. Yeah, you got all that. We only have the back. And you know, people are just like, oh yeah, I saw the show. This is what the whole city is. Yeah.

Development Plans

18:15All right. Fair enough. I was going to ask, how do you decide what to do with the vacant houses that you end up, you know, taking back and taking control of? So you can work with private developers, as you mentioned. I guess they can choose to renovate them. They can choose to demolish them. Like how do those conversations actually go? So no, that decision about demolish or renovate is made by us beforehand. Okay. If the houses are going to be demolished, we do that. We do that in partnership with the state. The renovation will, when we award an RFP to someone, we're awarding it for housing,

18:48like to renovate, to do that. So that's, we do that. But that again, goes back to the block level planning, right? And making sure that we like, okay, in this neighborhood, we need this, right? This block is, these houses are too far gone. We're just going to knock that down, make it park space or RFP the land, right? These, this block, this small developer can handle, this block only has three vacants and it's a block of 10. They can handle just doing these particular one. Or we have scattered sites. So we do that identification through

19:19our block by block strategies, through our neighborhood strategic investment areas, identifying those things before we give, get over to the developers or the CDC or individuals, because we're also, one of the most innovative things that we're doing. Folks typically use TIF tax increment financing for like new developments, right? For us, think about like Harbor East or Harbor Point, all the fancy areas. Well, we're actually doing it on TIF. And this is the first time. You got to, what is, this is where I cut in and say, okay, explain how TIF works.

19:51Tech increment financing, where essentially like the, you would put all this money up front and you would get it back on the back end, which is they used to incentivize development all around the country. This is the first time that that tool is being used for something that's not a non-contiguous area. So what we're doing is we're using the VVM, the vacant building notice, all across the city and identifying like, we're going to put a TIF on that. So we offered out and people were going crazy, like, it's not going to work. No one's going to apply for this. You have

20:22to have it in one area. That's the way the TIF works. Well, we put out in our first round, $28 million worth of TIF financing. We got $380 million worth of applications. So the demand is there. And this is affordable housing TIF in neighborhoods. And you can see, if you look at our map, right, you can see that it's going right in those red line neighborhoods, right in those disinvested neighborhoods. And in fact, as a part of my state of the city, we unveiled a investments map, data map, where you can see, since I've been in office, where the investment has gone, right?

20:56And we did a heat map. Baltimore's purple. So the darker, the more purple, the more investment. And you can see that we are strategically investing in the neighborhoods that have been disinvested in, in the butterfly or the red line neighborhoods. And that's how we're going to build upon what we're doing. Wait, why do people think that TIF only works for contiguous areas? I guess because no one tried it before. I had no idea. But it's probably also a little bit of hidden racism in people that were saying that. They were also saying, like, you can't do TIF in an

21:27area that is this kind of area, right? But yeah, they were wrong. We knew they were wrong. The numbers speak for themselves.

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24:05answer so answers get smarter the more your team asks. The result? Your entire organization asks data questions in natural language and trusts the answers. Not because the AI got lucky. Because it knows your business and its data. Because that's what an AI analytics platform should do. Join data teams from cursor, lovable, ramp, AWS, and over 2,000 more at hex.ai. How much do you think about the specific

24:35types of housing? Let's say you raise a tract of land or whatever, and you're thinking, okay, reimagining what this space can be. How much are you planning the specific type of housing that you want in an area, whether it's multifamily rental, condos, freestanding solo home? How do you think about envisioning what the neighborhood should or could be? Again, I'm going to go back to the neighborhood block level planning. So this is Baltimore, right? So those neighborhoods love

25:06their neighborhood aesthetic, and they want to keep them as much as possible, right? So even, for example, in that block of Park Heights that I talked about, where we knocked down, which were, we have row homes, connected row homes for the most part in Baltimore. We have single family too. I live in one. But connected row homes, even though we built a multi-unit senior apartment building for senior living there, it actually looks on the outside like the row homes that were there before. So we have to make sure that we're meeting the aesthetic of the neighborhood and what the neighborhood actually

25:37needs. So that neighborhood needed that, right? It needed places for older adults to actually want to remain in the community to do that. The next phase that we're doing there that we'll break ground on before the years out, hopefully, is the first home ownership opportunities built there since my grandmother and grandfather moved to the neighborhood, right? So that's the way that we're doing it. And it just depends on where you are, because we want to mix it. For example, we had a housing project, Perkins, Somerset, and Old Town. Now we have the new one where we have the

26:08mixture, right? We have mixed income. We have to make sure that we're providing a multitude of opportunities because it's not, it can't just be all high end. It can't just be all affordable. We need working class, all of those things. So one of the other things you're doing is taxing vacant land. And we've done, you know, we are vacant houses, I should say. We've done episodes on odd lots about a land tax. Walk us through like the pushback that you got to that plan. Why do people seem opposed to taxing empty buildings or empty land? Well, we actually didn't get any public pushback,

26:42right? The reality was, is that the way Maryland is set up, we had to get the state to say, yes, you can tax them at a higher rate. Now it took a little while for them to do that, but now we got the blessing, we got the bill passed, and now we're able to do that at the local level. And I think that it's just that there's been this theme, right? So we're independent city. There's no county government for us. Amen. Hallelujah. It's just us and state and the federal government. But there's been this sentiment that like the city doesn't know what it's doing, etc, etc. But you can't really argue

27:14with the data, right? Whether it's, you know, we've reduced, basically eliminated one in four vacant houses in my time in office, right? We've reduced violence in the city to the lowest levels on recorded record. You can't really argue with the numbers. So now folks are more ready to give us more of that authority to deal with the issues because it's also a drain on them, right? And that's what we're saying to them is that this takes money out of the state's pocket, right? The inability for us to do stuff with these owners hurts the state of Maryland just as much as it hurts the city of

27:47Baltimore. I was just about to ask you, you mentioned the big drop in violence. How much is that a key pillar of any sort of development success? Because ultimately, I imagine you can have the right tax incentives and the right codes and the right planning, but people don't want to live around a lot of crime. How much has that decline been a sort of, I guess, a tailwind to the entire project?

Crime Reduction

28:09I think that it is the number one reason why Baltimore is so hot right now. Because after all those years, I'll just say it like this. If this were 2021 and we're at CityLab, the only thing people want to talk to me about is how am I going to reduce gun violence in Baltimore? Now, the only thing people want to talk to me about, how did I reduce gun violence in Baltimore? And I think it's not just that we did it, it's how we did it. Because listen, we're talking about a place that when I was growing

28:41up, we had breathing while black policing, right? Seven times in my lifetime, I was sat down on the curb and put in handcuffs, including in the rain, simply because I was outside and looked the way I look, accused of committing crimes that I couldn't have possibly committed because I was two hours away at college when it happened. So when you think about that and think about that, I'm 42 now, but 18 out of the 42 years that I've been alive, Baltimore had over 300 murders. And we went from, in the last six years, right, violence has dropped over almost 60% in the city of Baltimore. We're going from 300 plus to now

29:18133, which is still 133 too many for me. But the fact that we've been able to do that and that we've done it in a smart way is important for us. Yeah. So if it's not the sort of hyper-aggressive police work, the type you described, what has it been? How would you describe it? Well, let me just start to say that doesn't work, right? So if you think about those years of zero tolerance, so I'll give you a year, for example, 2004, the city had 278 homicides, right? They arrested

29:4991,000 people in a city of 600,000. Last year, we had 133. We arrested 17,000 people. Significantly less homicides with significantly less arrests because it's never been about how many people you arrest. It's always been about who and for what. And the way that we've done it is we, by law, a law that I passed as a city council president in 2019, the mayor of Baltimore has to present a comprehensive violence prevention plan at least every two years. And that is what we did in 2021.

30:22I unveiled our first comprehensive violence prevention plan. I said that we would reduce homicides in the city by 15% from one year to the next. And people literally laughed because they laughed because one, they thought that was ridiculous. And two, they said, it's not going to work the way you say, because we're going to be smart on crime, right? Being smart on crime is how you really get tough on it. We're going to throw away the idea that you just go out and arrest everybody for everything and crime will go down because it didn't. But what we've been able to do is one, we use our focus deterrence model, what we call GVR arrest, the group violence reduction

30:57strategy, which we actually use data, which is something also funded partially by the folks, good folks at Bloomberg to identify who are the most likely to be the victim or perpetrator of gun violence. And we actually go to them, many of them and say, they get a letter directly from me that says, I know who you are. I know what you do. This is your one chance to change your life. We will help you in any way that we can. If you need housing, job training, education, if you want to be relocated, we'll do that. But if you don't stop doing what you're doing,

31:29I am going to bring the hammer down on you and we're going to remove you. Out of the folks who have taken us up on that, over 90% of them have not been revictivized or recidivated. When you think about that, and then at the same time, we put $50 million into our community violence intervention ecosystem where we pay people who used to be involved in their life to prevent conflict, to go out there through safe streets and We Are Us and these other organizations to do that great work because there are things that our police officers could never get in between because no one's going

32:01to tell them that. But at the same time, we also focus on the flow of guns. We're going after gun stores. We won the largest settlement against a gun store in this country's history. We won a settlement against the ghost gun company. We're going after gun traffickers. We're doing all of that and investing into youth and education and historic ways. That's the way that we've been able to do it. There's a professor at John Jay College, Peter Moskos, who, do you know who that is? I know he is. Yeah. He wrote this. He spent a few years within the Baltimore Police Department

32:32and he wrote a great book about basically the terrible incentives that happen when you start incentivizing just like pure number of arrests and why that completely fails as a crime prevention. I can't remember the name of the book right now, but it's really enlightening and he makes it very clear why if the incentive is to just maximize the number of arrests or whatever, that will never work in terms of a crime. Who would have thought that incentives matter? Crazy, crazy stuff. And you can see, look, in this building that is actually documented on a PBS documentary called

33:04The Body Politics. So my entire first two and a half years in office building that is something people can see. Can I ask, how does safety play into actually attracting capital back into the city? Because I get that if you're a business or a developer and you're thinking of putting money into Baltimore, you want to see the crime rate go down. But like, do people get really specific about it? Do they have like targets like, OK, once homicides are under like 100 per year, we'll go in. So yes and no. Right. I will tell you that, for example, if we're at the

33:37Indiana Shopping Center's conference in Vegas every May a few years ago, let's say 21 and 22, folks will be saying to Mr. Mayor, I love Baltimore. But until you guys, you know, reduce homicides and shootings, we can't invest there. But then you would get folks that would say like, until you guys get under 300 homicides, right? It's they don't depends on the person. But, you know, it was the the big elephant in the room. Do you guys have a plan? What's your plan? Is the plan working? How are you going to do it? A lot of folks with some folks would still invest

34:08if you show them the plan even before we actually were able to implement the plan. But it was the big elephant in the room. And we've been able to really show people that we have it. And now folks are like, oh, you guys are right. We're ready to come. Right. And now we have to continue that. And I tell the team all the time, folks, whenever we're at a big event, like the other day I was speaking and people started clapping when we when I mentioned the 133 number, I said, don't clap. We haven't done anything yet. That's 133 too many. And I don't want my team to feel

34:39like it's time to celebrate. I said, this is not celebratory. We acknowledging this historic progress, because now that we know that we can do better, the best is out there for us to go into.

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Capital Structure

38:22about the capital structure and how that works. You mentioned, okay, like money from the state, but what are some of these financing vehicles? How are they structured? Whose balance sheets do they sit on? What is the city fronting? How does that fit together? The city is fronting the TIF money, obviously. The city money is the TIF money for us. The state is fronting their $50 million investment each and every year. And then we have the private investment and we have philanthropic investment into the vacant strategy. So it's really everybody

38:53coalescing together. And then obviously the operational portions of it is on the city as well. For the most part, the state has some of the operational portions of it. When you think about the housing department, all of those things on the city, on the city's books, and even some of the the capital investment in our own capital budget is also on the city, the city's books as well. Do you get pushback from people in the community who worry that, okay, it's great. Housing is going to be built. It's going to be higher quality, et cetera. But, oh, it's only going to go to wealthy

39:24people. And how do you think about balancing the need for sheer volume versus guaranteeing that some of it is affordable or cheaper, the below market rate, whatever it is? That's a very important thing to me, right? I love the city of DC. My brother lives there. But I know that if you talk to specifically to old time black Washingtonians, they will say that we're no longer chocolate city. We're latte city, right? Like they feel like they've lost a bit of their culture with a lot of folks coming in from all over and feeling like some of the original

39:56Washingtonians have just been pushed out, right? And we're very intentional about understanding that we do want people to come from all over, but we also, and we have this very unique opportunity with all the vacants to make sure that the folks that had stayed in Baltimore and lived through all this can benefit from it as well. And we do that through things like my buy back the block program, where we're taking people who are renters, in fact, paying more in rent than they would in mortgage and making them homeowners. Very familiar New York city problem as well. Yeah. And it's also why we work with different kinds of developers, right? Who smaller developers

40:30who are taking these other things and we can partner them with folks to get these people there. We have to be thinking about all of that because people are going to say that anytime you make that investment. So I have a very technical question going back to the vacant homes issue. But one of the things I saw on the Baltimore subreddit was someone was saying like, we would get more buyers of vacant homes or more action on vacant homes if the water bills were not such an issue. Yeah. So what's the deal with the water bills?

41:00So I think that what I would say is that I would thought it was going to be a real technical question. So I think that a few things, right? Yes. Water rates have increased. They're increasing everywhere. But I would say that our increases up until last year were the lowest that we've had pretty much in my lifetime. But no developer has said to me that like, oh, I'm not going to come and renovate houses in Baltimore because of the water bill. We know that costs are rising across the board. And we're going through a process now even. And where this conversation

41:32really normally leads to is like, oh, well, the county pays less for their water than we do. And they don't have to pay all these fees. And then you have to spend this long explanation saying, well, they actually do pay those fees, except for the county just highs the fees and other bills that they don't see. Right. And we're working with five county partners through a bill that me and the county executive put into state about how the water system is going to look moving forward because the city does the water for the surrounding county as well. We pay every month. They pay every four months. All of these

42:03kind of things convolute the issue. But water rates and listen, the thing about water utilities is that taxpayer dollars for like property taxes and other money doesn't go into that. Water utility systems only come from the systems themselves. And when you think about the world and the craziness that we're living in today and the cost of the equipment and the materials that needed to make sure that water, that's going up. So there's no other way essentially to deal with it. But I think that for us, it's really about setting the structure in a more

42:36simplified, understandable way for the residents and making sure that our partners around are playing a more critical role when it comes to the resources. And that's what we're going to do. So we're here at the CityLab conference. And I'm sure, you know, every different city all around the world, for the most part, different issues, different challenges they're facing. But a common theme in much of the world is what you said at the beginning, de-industrialization. And this is all across the United States, all across Europe, et cetera. A major source of anxiety at the city,

43:09state, national level, you name it. How do you think of, I don't know, maybe this is just a very conceptual question, but OK, presuming that there's not going to be a big revival of steel mills in the vicinity of Baltimore anytime soon. How do you think about the businesses of the future and what the new industries that could thrive in a city like Baltimore and any other cities that have suffered the same? No, just in Baltimore. But I think for us, listen, we're blessed. We still have some industry. We're always going to be a port city. The world found that out a few years ago when

43:43the key bridge collapsed and found out how important the port of Baltimore is to the world. Oh, I thought we were going to talk about the wired again. The key bridge. How's that going? It's going. It's going. It's going. The bridge has been demolished and it's moving pretty fast for an infrastructure project of that size. People are like, oh, the bridge is not being rebuilt. I'm like, this is a bridge, you guys. This doesn't happen that quickly. But we're still a port city. We're obviously a big hub for tourism and culture and sports. We're also an Ed's and

44:15Med City, right? We have Hopkins and University of Maryland. We're a big arts and culture city and we're a growing tech city, which is where we think the growth is for us. We had like 600 million in capital investment into those kind of firms over the last few years. And we want to continue to see that grow because they're growing out of Hopkins. They're growing out of UND. And we want to make sure that they stay in the city because the port's always going to be there, right? The hospitals are always going to be there. The tourism is always going to be there. And we're revitalizing now through the process of revitalizing the Inner Harbor as well. But we think that and

44:49like manufacturing will continue to be a growth area for us. Well, say more about the competitive advantage for Baltimore when it comes to attracting tech businesses and AI in particular, because it feels like at the moment, every city in the U.S. certainly is kind of trying to do the same thing, right? Yeah. I think for us, one, you get to be that close to a 29-minute train ride away from D.C. and you don't have to pay D.C. prices, right? Like that's, we're just going to keep. And when you think about, especially for defense and other tech companies, Fort Meade is there. You know, all

45:21of these things are, and I say all these things are really close to the city of Baltimore and you're in a perfect spot. You can get to D.C. on train in 30 minutes. You can get to Philly by train in 45. You can get to New York in two hours and 30 minutes. And you're in this end where the location of Baltimore physically is an advantage over basically, in my opinion, in any other city in the country. But when you add on the infrastructure of the universities, like you're just not going to get a Johns Hopkins and a University of Maryland in the

45:52same place, in the same city, anywhere else. You're just not going to get that kind of, and the opportunities that Baltimore provides to folks. I guess you're really close to the data centers in Virginia as well, technically, right? Technically, yeah. We're close to them. You know, again, like I said in the beginning, there's a different version of the housing crisis, the housing problem everywhere. In New York, a lot of the discourse is just about zoning rules or people finding it takes too long to get a permit, et cetera. What is the Baltimore version of that story?

46:24That's it. Listen, everywhere you go, you're going to hear the same thing. Whether it's me and Mayor Mondami talking about it or Mayor Van Johnson from Savannah, we all talk about making sure that our systems are working better, right? We're going through that now. When I took office, they were still doing time sheets by hand in city government, right? So modern, think about that, right? Now that like we can modernize those systems and we're modernizing our permit systems, different agencies had systems that didn't talk to each other. Other times, like in terms of, okay, someone submits an application or someone submits an application

46:58to make a change to a building or something like that. Other times that you track and you could say, okay, this has substantively gotten shorter or faster? Some things have gotten shorter. And now we got to a point where a lot of our stuff is waiting for the applicant, right? But it was about simple stuff, right? Well, there wasn't, the applicant put something in, we put it back. The system didn't automatically notify the applicant. Now, they were made it waiting on them, right? Those kinds of simple things when you talk about operating a city government are important to have from a systemic point of infrastructure point of view,

47:33making sure that those things are there, making sure that you have the staffing necessary to go through all of the things that are necessary. And that's where we've been really focusing, building, building that infrastructure up, both from the data side and the technical side, but from the human capital as well, because you need both of them. Do you have a favorite KPI when it comes to like local government efficiency, like a number that you watch to try to judge the progress you're making? Well, see, for me, I hate to say this, but that one is always going to be the violence number for

48:03me. Like that's the one. Where are we? Every day when I wake up, that's the first thing. Well, now it's in the afternoon while I'm here, but every day when I wake up at home, it's the first thing that I look at. And then it's also the vacancy number, right? Like where are we today? How many? Has it gone up? Has it gone down? We want to make sure that we're hitting our goals, right? Like are we at our 15% goal for violence this year, right? Like that's what I want to see continuously to do that. But I have a lot of things that I follow. I'm a dashboard data person. So I

48:33have dashboards. We have a housing dashboard, public safety dashboard. We track a lot of things on dashboards. I hate to even ask this question because it's so trite and so cliche to ask, but I'm just going to ask it anyway. AI in terms of its actual application within city government, are there things yet at this point, what is it? Late April, 2026, where you could say we are employing AI in some way that is making something better or is it an experimental stage? Do you have a lot of vendors

49:05promising magic if you adopt their solution? No, that would never happen. No one promises that their things. But what is the role of contemporary artificial intelligence models within city government? So for us, it could, you know, our fire department's using, the housing department's using it, like even with vacants to help identify the structures and whether, like, if we need to look at condemnation and those kind of things. And there'll be other things that we can push to use it. But we just have to be smart about it. How many conversations here have I had?

49:36Oh, yeah. A lot. People are just mayors trading tips and stories. Oh, that's the beauty of it, right? That we're all, listen, we, I'm a part of the best Bloomberg Harvard class. That's the fifth class. So don't let any of the other mayors tell you. They're not from my class. They're not part of the best. But like, we all talk to each other pretty much every day, right? Like, there's a whole bunch of mayors. Is there a group chat? There's group chats with an S, with an S. So we talk to mayors every day. I'm the president of the African American Mayors Association. We talk to each other every day. We're always

50:08sharing things. If you're a mayor, one of the best things that you have to be, in order to be a great mayor, you have to be a great thief. You have to steal from mayors across the country and steal ideas and make them better for you. Because if you're not learning from your counterparts, who are you learning from? I have just one more question, and it's entirely out of personal interest. But if I want to explore Baltimore outside of the Greyhound bus station and the casino that's next to it, where should I go? Well, it depends. Now I have to ask a question. What time of year are you coming?

50:40Let's say summer. That's when I'm next going to visit my dad in Annapolis. And what are your interests? Oh, culture, art, parks, gardening, animals, yes. All right, great. Food. If you're food and you're not a sports person? No. All right, great. I didn't want to say everything except sports, but that's pretty much it. I need to know. Those are the kind of things I need to know. So if you're coming in the summertime, you love food. So you're coming to Baltimore, so you can't come to Baltimore and not eat crabs. So would you prefer crabs or crab cakes? Oh, that's a really hard question.

51:11Yeah, look at that. Yeah. I feel it. Crab cakes, probably. All right. So if you're going to get crab cakes, you have to go and get the best crab cake in the world from Coco's Pub. You'll never eat another crab cake after having that one. Oh, that sounds good. Start you there. But since you're into art and culture, you should then, right now, up and through August, we actually have at the Walters Art Gallery, which is free to the public, we actually have a Dorian Fletcher exhibit that has the jewelry and the costumes

51:43from Black Panther or Wakanda Forever. Oh, that's so cool. In display in Baltimore at the museum because we found out that some of the art at our museum inspired her to do her jewelry art. So that's a great way to spend your time there. But if you happen to come Memorial Day weekend, you can do that and enjoy the Artscape Festival, our free arts festival that is Memorial Day weekend that has art vendors selling art, including at our scout art fair, which is really great. You have musicians there. The roots will be there this

52:16summer. You have food galore, everything galore. And it's there. The art you have to pay for, but everything else is there. Food you have to pay for, but the music is free 99. You've sold me crab cakes and costumes. I am there. Mayor Brandon Scott, thank you so much for coming on All Thoughts. Thank you for having me. Thank you. That was fantastic. Thank you so much.

52:47So, Joe, that was obviously very interesting. I never expected to interview the mayor of Baltimore in Madrid, but, you know, one of those nice occasions that happens. Life is interesting. No, I thought there was a really interesting episode episode. I mean, we could have gone for like an hour just asking him to go off on the wire, obviously, but I get that. I hadn't really thought about that. This is the cultural depiction of a city in a way that does not. Yeah. The richness of the depictions of New York City, totally different, totally, totally unfair. I also thought it was like interesting, this thought, and I sort of had it

53:20before, but it really makes sense. Like crime has to be the number one thing. And sometimes I think that there are certain questions that economics itself as a discipline is sort of ill-equipped to deal with. And look, you can have all the sort of right zoning and tax structures and capital structures in the world, but if people don't want to live in the vicinity of high crime rates, it's going to mean nothing, but that is going to be sort of a limit to what you can do on paper or with money or anything like that. Yeah. And I thought it was really interesting to hear how, I guess,

53:51developers slash businesses are actually thinking about it because like, yes, it's at the forefront of everyone's mind, but it's kind of interesting to hear maybe a specific business will be like, we're interested once the homicide rate is below this particular number. I guess you have to have like a numerical target in your mind as well. Yeah. That makes sense. Everyone should read the Peter Moskos book. It's about, he spent a year within the Baltimore police department. It's a really good, you know, it's this cliche that we talk about in many fields, which is that, you know,

54:24once something becomes a measure, once you start targeting a measure, it stops being useful. Right. So maybe in theory, at one point, there might've been some relationship between the number of arrests that you make and the size of the crime rate. Suddenly then you're like, okay, let's prioritize making arrests. And then once the measure becomes a target in its own right, it completely falls apart. And it's sort of intuitive, but he really like walks through exactly how and why that fails from a policing perspective. It's really one of the more interesting books that I've read.

54:56Yeah. That was like a stunning figure. This idea that the number of arrests has gone down so much along with the homicide rate. I had no idea like how many arrests there actually were before. That was crazy. I think we should go to Baltimore, Sam. No, seriously. It sounded like, you know, he made a very good case. Pitched to you at the end, you know, started thinking about the crab, the food, the music, the art. I was like, yeah, we should have, I mean, you're, I guess you're going to be there regardless, but now I want to take another Baltimore trip. I'll be at the bus station and then moving onwards. But I think this time I am going to,

55:28I'm going to try to stay for like a day or two. Yeah, spend a little time there. Have some crab cakes. All right. Shall we leave it there? Let's leave it there. This has been another episode of the Odd Lots podcast. I'm Tracy Alloway. You can follow me at Tracy Alloway. And I'm Joe Weisenthal. You can follow me at The Stalwart. Follow our producers, Kerman Rodriguez at Kerman Armand, Dashiell Bennett at Dashbot, Kale Brooks at Kale Brooks, and Kevin Lozano at Kevin Lloyd Lozano. And for more Odd Lots content, go to Bloomberg.com slash Odd Lots. We have a daily newsletter on all of our episodes. And you can chat about all these topics 24-7 in our Discord, discord.gg slash Odd Lots. And if you enjoy Odd Lots, if you want us to

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