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Baltimore Uses Blockchain to Target Blighted Properties

Ongoing work with Medici Land Governance has yielded a blockchain-enabled tool to aid in property searches and sales. The goal is to ease the transformation of thousands of vacant, abandoned or blighted properties.

A row of townhouse-style residences in Baltimore, Md., under the spring sun.
Photographer: Sergey Novikov
The city of Baltimore is using blockchain technology to smooth the property transaction process, in an effort to relieve obstacles to home ownership.

“It encourages people to want to do business with the city. It incentivizes us to be more efficient,” Ebony Thompson, city solicitor for the Baltimore City Department of Law, said June 17 during a panel discussion hosted by the Brookings Institution.

Last year, Baltimore partnered with Medici Land Governance to create a blockchain platform for recording the roughly 16,000 vacant properties in the city. The idea is to use blockchain — a secure digital ledger that is foundational to products like cryptocurrencies — to make title transfers not just easier, but cheaper, Thompson said.

When the city acquires a vacant property, it has to conduct a title search. Then, when that property is sold to an investor, the title search process begins anew. Later, once the property has been rehabbed and is ready to go back on the market, a new owner starts the title search process all over again. A single title search can take hours and cost hundreds or even thousands of dollars, experts said.

“I thought that was highly inefficient, especially if you’re looking at 16,000 properties. And we know it’s a source of blight, it’s a source of crime,” said Thompson, who initiated the idea of turning to blockchain to aid in these sorts of secure transactions.

Today, Thompson said, some 228,000 properties are now “on chain,” which allows buyers, real estate professionals and city officials to access the securely held title records, safe from fraud, while speeding up the property transaction process. A title search using traditional methods can take at least two hours, officials said; blockchain enters the property into a real-time database, allowing the searches to happen faster.

Once title information is placed on a blockchain-supported technology, different kinds of identity solutions can be put in place to expedite access to different types of documentation, reducing paperwork, Chris Brummer, professor of financial technology at the Georgetown University Law Center, said. A more efficient system can contribute to fewer fees in the property transfer process, removing a barrier to ownership, he said.

“And in the United States the way people build their wealth is through the ownership of a home,” Brummer said during the panel. “So when you can sort of attack those fee structures through things like decentralization, you start to move the dial on things like equity, and access to wealth.”

Baltimore’s project is an example of using new digital technologies to solve issues cities face, Nicol Turner Lee, Brookings Center for Technology Innovation director, said, noting in this case, the issue is how to best renovate blighted housing.

“How do you actually create this space so that you could leverage technology to solve, strategically, issues that we face on a day-to-day basis? And in particular, leveraging AI,” Turner Lee, the panel moderator, said.

Cleve Mesidor, executive director of The Blockchain Foundation, described newer technologies like blockchain and AI as Web 3.0 — with Web 2.0 marking the rise of social media. Web 3.0 will be the era of leveraging technologies like blockchain and AI “to go into this next iteration that works better for everyday people,” Mesidor said during the panel.

“So many people think of municipal government as relying on slow and antiquated processes,” Baltimore Mayor Brandon Scott said in a statement. “Under my administration, I have looked for every opportunity to see Baltimore not only catch up, but lead the way by leveraging technology to address our biggest challenges. Using blockchain to help reduce the number of vacant properties in the city is one of the most exciting ways we can do that.”
Skip Descant writes about smart cities, the Internet of Things, transportation and other areas. He spent more than 12 years reporting for daily newspapers in Mississippi, Arkansas, Louisiana and California. He lives in downtown Yreka, Calif.