Correct, the two LODs are identical to each other. This was done for no other reason than to get a rough approximation done quickly, since as you see the meshes themselves are only adjusted to be roughly equivalent in shape to the main meshes. I wouldn't bother making reduced face versions of such rough approximations, personally. Better to spend that time on properly-made LODs. As it is, though, it still provides a performance increase over not having any.
The specularity is likely zero because the imported resets the values to zero every time they're loaded. Thus I have no way of knowing what the original values for the parts were. With the variety of Oblivion textures used in the City hak, any normal maps that have a white alpha channel would produce an unnaturally shiny and smooth surface on any houses that have specularity at any positive value, so it may be safer to keep them at zero. If they're black instead of white, or better yet have alpha channels with good greyscale content, then I would set them to 100% specularity and let the alpha channels control the amount.