I played up the bank's liability from the decaying pool fence and slight brick cracking due to settling about an inch over a 30 year period. 

That being said, the midwest ain't all full of decaying crap either in war zones.  

That's the only way you're going to get the exceptions you'll need to counter act you income.

The center of the house had fallen in on itself and virtually everything was oozing and decaying front wood rot, termite damage, water damage, copper theft, and virtually every other form of abuse a house can possibly be subjected to.

All the roofs were re-done and when they got into roofs, the mansard portion was decayed as well as the plywood underneath.

Either 1) get out of the way and let the market work, relatively free from restriction or 2) suppress market forces for so long that eventually the city decays as the original base of wealth is siphoned off by high taxes or those people choose to leave.

Well, much should be addressed in the lease, housekeeping issues, keeping the property free of waste, decay and degradation, that means, wipe the walls down!

Neighborhood decaying.

Depreciation basically says that the physical structure of your house will decay and lose value over a period of 27.5 years because everything will need to be replaced like the roof, siding, appliance, etc.

Obviously, there are still other factors, but things like over-building are less likely to counteract the socio-economic and population trends, as new construction is rarely competitive for rental units.So, the metrics you list above are much more likely to help you determine whether market demand and cash flow will remain strong as opposed to whether values will increase and what extent.The problem is, the property you've been discussing won't likely cash flow at all.