Detroit has 80,000 abandoned lots and buildings, according to the city’s planning department. Old housing projects, homes, strip malls and even high-rise buildings sit empty across much of the city. Motown has more vacant office, retail and industrial space than nearly every other big city in the country.

Like many of Detroit’s abandoned buildings, though, it’s anything but deserted. Rather, it’s a hive of activity, buzzing with scavengers, vandals, late-night revelers, arsonists, photographers and urban explorers who brave the crumbling buildings’ many hazards and create a good number of their own. The complex remains unguarded.

“Mayhem. That’s what they should call the place,” says John, a 36-year-old telephone-line repairman who spends his spare time exploring Detroit’s legendary industrial ruins. “If you decide you want to push a dump truck out of a window, this is the place to do it.”

There’s more to this. The pranksters’ playground of empty and abandoned properties represents a deep and lasting betrayal of the needs of urban America.  Some cities in the Rustbelt, hit first by the abandonment of their inner cores and then utterly devastated by foreclosures, bear scars from which they are unlikely to recover and that few seem to see. Years after the financial crisis ends, I wonder if we’ll look back at this as a time when we stood by and let some of the country’s once-great communities simply fall into disrepair and die.

In Washington, Congress ceded to the lobbying efforts of powerful interests like the National Association of Homebuilders, and passed an extension of a homebuyer’s tax credit that costs more than it delivers and puts money into the pockets of people who don’t need it. There are no lobbying groups for people who live in neighborhoods with foreclosures that even banks have abandoned because they aren’t worth the expense of taking back.

However, there are some bright spots in the overall dark landscape. As TWI’s sister site, The Michigan Messenger, pointed out last week, urban gardening has taken hold in parts of Detroit, which now boasts more than 700 urban farms within its city limits. The idea behind some of those farms is to present a healthy alternative to the liquor stores, gas stations, and convenience stores where residents often turn for high-cost groceries and fast food.

Like urban gardening, the best solutions to the abandonment crisis will come from the bottom up. But those efforts need government support to take hold and expand. In order to take off, any possible solution requires a sense of urgency among policymakers about the huge problems facing cities like Detroit, Cleveland, Chicago — and even the outer exurbs in the boom markets of California and Arizona, where foreclosures have caused property values to sink and have left communities stuck in a downward spiral.

But there’s  been no big national push for possible solutions like land banks, which would allow local communities to seize and reuse vacant land and buildings. There’s been no national summit to talk about the tragedy of declining neighborhoods due to foreclosures. Treasury Secretary Timothy Geithner apparently picks up the phone and chats with his Wall Street friends several times a day. Hey, Secretary Geithner — How about making a call to a homeowner surrounded by foreclosed homes? Or maybe taking a stroll down one of those blocks in Detroit where every single home is owned by a real estate speculator? In America’s abandoned neighborhoods, they’ve been waiting to hear from you, or from anyone in Washington, for a long time. And they’re still waiting.

The Wayne County auction of some 9,000 repossessed properties last week resulted in more than 80 percent of them failing to draw a single bid. And that’s even with the minimum bid starting at just $500.

The fact that Rust Belt cities such as Detroit and Cleveland are plagued with foreclosed properties isn’t a new development. But what happened at that Detroit auction gives a glimpse into how acute the problem is. WalletPop explains:

The auction didn’t go smoothly, however. Out-of-town speculators cherry-picked prime properties in areas such as the Boston-Edison district, while locals who showed up too late for registration weren’t permitted to take part.

That’s the scandal. One of the reasons distressed communities have begun fighting for tools such as land banks — public enterprises that allow a community to quickly acquire abandoned and foreclosed properties, so they can be cleaned up and put to use – is to prevent speculators from playing games with foreclosed properties, while local officials watch helplessly. But as we’ve reported, getting a land bank together can be a lengthy and complicated process. Communities like Flint, Mich., are spearheading the shrinking cities movement, which tries to deal with the problem of foreclosed properties by cordoning off abandoned areas of the city and letting the land return to nature. It can be a great idea for some communities, but to achieve it, local officials first need that land bank or some other way to gain control of abandoned and foreclosed homes and land.

Otherwise, you can end up with a situation like the Detroit auction, where out-of-town speculators with money and experience can out-bid any local community groups or investors who might want to actually rebuild neighborhoods, rather than just  play real estate games.

As Virginia Tech urban planning expert Joseph Schilling told TWI last spring, ““We do a pretty good job in this country of recycling cans and plastic bottles. But we do an awful job of recycling and reusing vacant properties.”

Until our national housing policy turns more aggressively toward encouraging and allowing more local control of foreclosed properties — and to providing some financial support for that effort — expect to see more sad situations like that Detroit auction. We have some of the answers to this, in innovative policies like land banks. Why aren’t we moving with urgency to use them?

Instead of waiting for houses to become abandoned and then pulling them down, local leaders are talking about demolishing entire blocks and even whole neighborhoods.

The population would be condensed into a few viable areas. So would stores and services. A city built to manufacture cars would be returned in large measure to the forest primeval.

“Decline in Flint is like gravity, a fact of life,” said Dan Kildee, the Genesee County treasurer and chief spokesman for the movement to shrink Flint. “We need to control it instead of letting it control us.”

Kildee’s land bank has become a national model for other communities wanting to take control of abandoned and trashed properties, clear blight, and find other uses for the land. TWI has reported extensively on land banks and the problems of vacant properties, as well as the proposals in Flint to begin shrinking the city. Flint isn’t alone, either. The New York Times reported last month that in Saginaw, Mich., and other hard-hit cities, Habitat for Humanity concentrates on tearing down blighted houses, rather than building new ones.

All of this is a testament to the dramatic crisis in some cities that hasn’t seemed to draw the attention of national policymakers. Lenders and the government can modify all the loans they want and hold off on new foreclosures, but that will do nothing to address the dilemma posed by vacant properties. It’s the back-end of the foreclosure process, and the damage is becoming permanent. The drastic measures in Flint — there’s no other way to describe cordoning off abandoned portions of the city and leaving them behind — should be a wake-up call. But it’s not clear anyone is listening.

Communities that have land banks — and there aren’t enough of them — need major resources from the federal government to address the scope of the problem. There’s no way they can do it on their own. Until that happens, if it ever does, expect more troubled communities to resort to things like shrinking their cities and enlisting charitable groups to tear down deteriorated houses.

As the mortgage crisis continues, it’s become clear that in some markets, banks and lenders dumped their trash and walked away, leaving cities that already weren’t thriving even worse off. It’s almost unbelievable to hear local officials in these areas discuss abandoned swaths of their land. (Kildee talks about creating a new “Flint Forest.”) But that’s the reality these days, in the American cities and neighborhoods we’ve simply left behind.

A row of boarded-up houses in Detroit. (Flickr: bbcworldservice)

In Atlanta, a neighborhood revitalized in the 1990s as part of the city’s Olympic bid has been scarred again by vacant and abandoned homes, undoing years of progress. In Washington D.C.’s struggling Anacostia community, decades of work to rebuild and reinvest are being lost to blight brought on by foreclosures. In Detroit, speculators inspired by late night infomercials and eBay auctions buy foreclosed properties in bulk over the Internet, creating a class of absentee landlords with little interest in rebuilding neighborhoods.

Illustration by: Matt Mahurin

Abandoned and vacant foreclosed homes rapidly piling up in neighborhoods like these around the country are serving as symbols of the secondary damage caused by the foreclosure crisis — a catastrophe felt on the ground but still unseen by Washington. While Treasury Department officials and lawmakers look the other way, communities with shrinking resources are mostly on their own to deal with the blight and drag on property values caused by staggeringly high numbers of empty homes left behind.

States and cities are racing to try everything they can, including creating land banks to take over the properties and fix them up or tear them down. But in a discouraging sign of things to come, some are so overwhelmed as they struggle to cope with record numbers of distressed homes that they can’t even pursue longer term solutions. There’s still a huge mismatch between the capacity in devastated communities, and the waves of foreclosures ahead – Alt-A loans resetting to higher rates in once-hot markets in California, Nevada, and Florida; empty big-box stores left behind by bankrupt retailers; new foreclosures tied to job losses and disappearing industries; and growing volumes of bank-owned foreclosed houses left in disrepair.

“This is a problem that’s only going to get worse unless it’s addressed,” said Frank Alexander, an Emory University School of Law professor in Atlanta who specializes in housing and community development. “Vacant and abandoned properties can be a terrible drain on a neighborhood, for as long as they exist. And some neighborhoods are never going to rebound from this.”

Repairing the damage from foreclosures is a difficult challenge, because cities, states, community development groups, and even willing banks and servicers have no experience working together on the complicated process of disposing of or reclaiming unwanted properties, said Joseph Schilling, a Virginia Tech urban affairs professor and co-founder of the National Vacant Properties Campaign.

“We do a pretty good job in this country of recycling cans and plastic bottles,” Schilling said. “But we do an awful job of recycling and reusing vacant properties.”

That job is made even harder by the fact that during the last eight years, the Department of Housing and Urban Development did little or nothing to promote innovative community development ideas, said Dan Kildee, chairman of the the Genesee County Land Bank in Flint, Mich., and the county’s treasurer. That void means communities are starting from scratch in searching for ways to fix the crisis, he said.

While they struggle, properties are left to decline, or to fall prey to speculators ranging from curious Internet surfers to get-rich-quick companies. Speculators make things worse by playing games with foreclosed properties, “treating them like baseball cards” and then walking away, Kildee said.

In Cleveland, Detroit, and elsewhere, speculators from out of state and even overseas buy bank-owned foreclosed homes on Websites like Craigslist or eBay for pennies on the dollar, then try to quickly flip them for a profit, or to rent them out before abandoning them. Speculators also are starting to scoop up vacant and foreclosed homes in stronger housing markets in places like Florida, where some properties aren’t selling because potential homebuyers are still waiting for prices to fall further or they can’t get loans.

One speculator who bought a handful of Detroit properties at fire-sale prices recently described his interest this way: “I thought it would be quite good fun to have a look,” Darren Veness, who lives near Brighton, England, told the Associated Press.

Alan Mallach, a housing and community development expert who spent time in Detroit last fall researching its housing crisis, has a different take.

A house that might sell in Detroit for as little as $10,000 still would command rent of $700 a month or more, because the rental market hasn’t collapsed yet, Mallach said. Speculators can collect that rent, while spending very little on minimal repairs, and within three years they’ll get their money back with a nice profit. Then, having taken all they can out of the property, they walk away. The house is “exhausted,” in further decline, and left to sell again for even less or to sit empty.

Speculation has gotten so out of hand that there are some neighborhoods in Detroit where every single house is owned by a speculator, Mallach said.

The problem goes even deeper. In some cities, speculators and vacancies essentially have turned the clock back on previous development successes, noted Harold Simon, executive director of the National Housing Institute. Legitimate investors who took a chance on urban areas to open businesses or to buy properties in neighborhoods like Anacostia suffer from the death spiral of property values. Blocks once enticing to new buyers go downhill as they become pockmarked with foreclosed homes.

In Chicago, once-hot neighborhoods on the city’s North Side have become “condo ghost towns” because of foreclosures — and children are afraid to go out after dark because the empty properties have been taken over by drug dealers and criminals, The Chicago Tribune found. That reversal of past gains is among the most troubling aspect of the foreclosure fallout, Simon said.

“It’s undermined everything that’s been done before,” he said.

That pattern holds true in Atlanta as well, where “we’ve got some neighborhoods here as bad as anything in Cleveland or Detroit,” said Alexander, the Emory University law professor. In the early 1990s, Atlanta officials worked hard to rehab an ailing southwest city neighborhood, as part of its Olympics quest. Initially, the effort was a success, drawing new homebuyers to a previously neglected community. Now, however, thanks to mortgage fraud and rampant speculation, “it is undoubtedly as depressed there as it was in 1992 or 1993,” Alexander said. “The number of vacancies, abandoned homes, and squatters has basically wiped out all the progress made between 1995 and 2000.”

Things aren’t likely to get better soon. As TWI reported recently, inventories of bank-owned foreclosed properties, known as REOs, are on the rise. Properties become REOs after they are taken back by banks when they fail to sell at sheriff’s sales or foreclosed auctions. Usually, banks try to quickly resell these properties, but the foreclosure crisis has changed all that, leaving bank REO inventories bloated and at record levels. RealtyTrac, an online foreclosure database, predicts some 3 million foreclosures ahead this year, with volume of bank REOs reaching an unprecedented high of 1.5 million.

Beyond that, banks are holding on to some 700,000 properties they still haven’t listed for sale, RealtyTrac reported last week, meaning many more foreclosed houses are in limbo, and have yet to hit the market. Some banks hire property managers to take care of the homes, but others fail to protect them from being vandalized and falling into decline.

Despite those looming threats, the biggest financial help for cities and states dealing with foreclosed properties to date has been nearly $4 billion included in the mortgage rescue bill passed by Congress last summer, and some $2 billion added in the recent stimulus package. To many, it’s not enough to even begin addressing the scope of the problem.

“It’s like putting out a million acre forest fire with a pick and shovel,” said Mallach, a fellow at the Brookings Institution and the National Housing Institute . “I realize the Obama administration has got a lot on its plate, and Treasury is understaffed. But the administration doesn’t seem to be grappling with this issue at all. A lot more people are going to be losing a lot more houses. We’re going to be seeing millions more vacant properties.”

There are some encouraging signs. Shilling, of the National Vacant Properties Campaign, pointed to the National Community Stabilization Trust, a new, national nonprofit trying for the first time to connect servicers and lenders that hold foreclosed properties with local officials and community groups trying to save neighborhoods.

Land banking, in which communities try to acquire and reuse properties, also is growing in popularity, Schilling said. Pennsylvania, Illinois, and New York are among the states moving toward creating land banks. Schilling’s group aims to help communities create more land banks and to build up the capacity of the ones already in existence.

“We keep hearing stories that banks will offer to give cities 5,000 or so foreclosed properties, and the cities will say, “We can’t accept them,’ or “We don’t know what we can do with them,’” Schilling said. “The longer term vision is to have a system that’s more efficient in recycling and reusing vacant properties.”

Kildee, whose land bank has attracted national attention and was profiled by TWI last year, said he’s being deluged with calls – even from local officials in markets where housing boomed and prices remain high. “Five or six years ago, basically the only people who used to call us were academics,” he said. “Now suddenly everybody has decided a land bank is the next best thing.”

Kildee added that he is in talks with HUD for a possible new position at the agency that would serve as a platform to encourage land banks and land banking.

Money for land banking was included at the federal level for the first time as part of the mortgage rescue bill package, and in the additional stimulus funds. But putting a bank in place is a lengthy process that often requires obtaining legislative approval and other hurdles. Just five to seven percent of the applications from communities for the first round of federal foreclosure money involved land banking, Schilling said. That’s probably because communities are so overwhelmed with boarding up foreclosures and tearing them down they have little opportunity to plan any further ahead, he added.

In Mallach’s view, the federal government needs to step in quickly and forcefully – with a national land bank of some kind. Only a federal land bank could provide enough capital to communities to buy up properties in significant numbers, and to offer tax incentives to encourage banks and servicers to turn over foreclosed homes. “We’ve got to deal with this at the federal level,” Mallach said. “Cities and states simply do not have the resources to handle all this.”

Others are more optimistic than Mallach that federal help and support for local and regional land banks will be forthcoming, saying the Obama administration is much more in tune with the effects of foreclosures in neighborhoods than the previous Bush administration had been. In the meantime, local governments are looking for any tools they can use. In Cleveland, which finally got state approval for a land bank after a lengthy battle, officials are thinking of also creating a local “bad bank” to buy up toxic mortgage assets, said Cuyahoga County Treasurer Jim Rokakis.

“We’re trying to be as creative as we can,” Rokakis said. “But we’re running out of time.”

That’s true in Washington as well, where it soon may be impossible to keep ignoring the continuing surge of vacant and foreclosed homes.