You can't leave the remains of a building in it's basement. This is just as dangerous as leaving the building standing. Old houses are enviromental disasters. They are filled with lead paint, Asbetos and Mercury contamination. If you leave the remains of the house there, you have a lot that can't be used without enviromental remediation. It's much easier to clean it up when you tear it down than to bury it and have to dig it all back up later.
The last thing I would want to do is create more government bueraucracy. It's going to be far cheaper to just contract out the work than creating a whole new city department. Tearing down houses should not be and never should become a Core city service.
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