The National Trust for Historic Preservation describes demolition by neglect as “an epidemic within historic areas and a challenging issue for state and local authorities.” For small towns in social and economic distress, downtown buildings present opportunities for community renewal given their historic and cultural importance, yet it is in these towns where building neglect often results in nuisance-laden commercial districts and the demolition of built assets. The State of Iowa recognized the pervasiveness of this problem by offering financial assistance to cities with competitive applications, but this alone is not a remedy. Through participant observation and the Community Capitals Framework, this report looks at a local case in Ackley, Iowa to demonstrate how outdated building codes, economic hardship, and deferred maintenance can permanently and negatively transform an array of local capitals. Drawing from this case, it identifies strategies for Iowa’s small towns that could both prevent demolition by neglect and serve as catalysts for positive community transformation.