Vacancy & Abandonment: Strategies and Tools for Local Governments. A Division of New York Department of State

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1 Vacancy & Abandonment: Strategies and Tools for Local Governments A Division of New York Department of State

2 2 Course Overview What is Vacancy and Abandonment? Impacts of Vacancy Land Use Tools Case Studies Funding Opportunities Conclusions

4 4 What is Vacancy? Abandonment? Vacancy: A property that is not occupied but there exists an owner with an expressed interest in the building Abandonment: A property where there is no visible or clear cut owner or landlord of the building or one that can easily be contacted. Buildings can be unsecured and poorly maintained

5 5 Signs of Vacancy and Abandonment Trash and debris accumulation Structures lacking utilities: water, electricity, gas, etc. Fire hazards Attractive nuisances to children (broken fences, holes, etc.)

6 6 Indicators of Vacancy and Abandonment Code violations Mortgage foreclosure Tax foreclosure Tax delinquent properties, municipal liens Defective property titles Utility shutoffs

7 Economic Impacts of Vacancy Nearly 40% of nation s vacant homes are located in 10% of all census tracts It can cost municipalities between $5,000 and

7 7 Economic Impacts of Vacancy Nearly 40% of nation s vacant homes are located in 10% of all census tracts It can cost municipalities between $5,000 and $35,000 to clean up these properties Vacant properties: Destabilize neighborhoods Create fire and safety hazards Drive down property values Drain local tax dollars

8 Vacant Property Costs One abandoned property can decrease real-estate values for an entire block Maintenance and demolition creates further drain on

8 8 Vacant Property Costs One abandoned property can decrease real-estate values for an entire block Maintenance and demolition creates further drain on municipal expenses They pose significant fire and safety hazards A selling price of a vacant and foreclosed home is 46% lower than that of an occupied home

9 The Cost of Vacancy Issue Impacting Costs or Results Vacant property Local government tax revenue $5,000-$35,000/property per year 9 Residential foreclosures Presence of graffiti Fires from vacant properties Value of private property within 500 feet Safety and transportation/retail sales Health and safety $7,000 loss of value Clean up costs $9.47 per act of graffiti $20,700 per affected property Crime Public safety Increased aggravated assaults by 15%

10 10 Vacancies Have Environmental Impacts Low income neighborhoods are more vulnerable to increases in property abandonment and blighted properties after natural disasters Black city residents are disproportionately affected by concentration of potentially contaminated, tax delinquent, or vacant properties Brownfields can contribute to respiratory illness in community; may be linked to cases of cancer Soil suitability may be compromised in blighted neighborhoods

11 11 Public Health Considerations Vacant lots can become breeding grounds for mosquitos, rats, mice and other disease spreading vermin Poor indoor air quality, mold, lead, rodent/cockroach infestations can lead to asthma and other serious health issues

12 Social & Psychological Impacts Broken Windows Theory People believe that neighborhoods are unsafe Neighbors who can afford to move leave the

12 12 Social & Psychological Impacts Broken Windows Theory People believe that neighborhoods are unsafe Neighbors who can afford to move leave the borderline neighborhoods before things get worse Their exodus contributes to the cycle of blight by leaving behind unoccupied homes and taking tax dollars with them

13 13 Foreclosure & Zombies

14 14 What is Foreclosure? Legal process where lender attempts to recover balance of loan from borrower by judicial-authorized sale of asset, or as otherwise authorized in state law Once lender completes foreclosure process, they take possession of property NYS has fourth-slowest foreclosure process in the nation (418 days)

15 Tools: Combating Foreclosure Homeownership Protection Program (HOPP) Direct funding to legal services and housing counseling agencies that provide no cost representation to struggling homeowners

15 15 Tools: Combating Foreclosure Homeownership Protection Program (HOPP) Direct funding to legal services and housing counseling agencies that provide no cost representation to struggling homeowners Goal is to keep people in their homes NYS Community Restoration Fund Purchased 398 mortgages in targeted communities to keep owners out of foreclosure and abandonment through renovation, and resale if needed

16 16 What is a Zombie? Lender begins the foreclosure process but fails to complete Property remains in owner s name, although they vacate the premises Owners are often unaware of the obligations of continued ownership NYS Zombie Law

17 Zombie Property Remediation Act Four components: 1. Requires mortgagees to inspect, secure and maintain mortgage delinquent properties 2. Requires mortgagees to register vacant and abandoned properties with new state property registry 3. Allows mortgagees to complete expedited mortgage foreclosure proceedings for abandoned property 4. Enhanced consumer protections enacted to protect homeowners after the subprime mortgage collapse in 2008

18 18 NYS Zombie Property Remediation Act Duty to Inspect: RPA 1308 Applies to vacant/abandoned 1-4 family residential properties Within 90 days of delinquency, servicers must inspect property s exterior to determine its occupancy status After initial inspection and throughout the loan s delinquency, servicer must conduct exterior inspections every days If servicer has reasonable basis to believe property is vacant and abandoned, then servicer has to secure and maintain property

19 19 NYS Vacant Property Registry Maintained by NYS Dept. of Financial Services: DFS must provide local officials access to registry info regarding properties within their jurisdiction Within 21 days of learning a property is vacant/abandoned, lender must report to DFS: Contact information for lender/servicer responsible for property maintenance If foreclosure action has been filed and commencement date Property owner s last known address and contact info

Attorney General s Zombie Remediation and Prevention Initiative City

20 Case Study: Niagara Falls Zombie Fight Project City used new zombie law to get vacant houses back on the market recipient of NYS Attorney General s Zombie Remediation and Prevention Initiative City received $250K over 3 years Money used to hire Zombie Fight Project Coordinator

Case Study: Niagara Falls Zombie Fight Project First round of inspections found 100 zombie properties, 80 suspected zombie properties 21 Zombie Project Coordinator and code

21 Case Study: Niagara Falls Zombie Fight Project First round of inspections found 100 zombie properties, 80 suspected zombie properties 21 Zombie Project Coordinator and code enforcement staff determined vacancy status and code violations City informed banks of violations If they didn t respond, lawn signs placed on properties to shame banks into action

Case Study: Niagara Falls Zombie Fight Project City informed one bank/servicer they had 17 zombies: 14 properties had code violations; 12 were fixed 2 properties were unsafe;

22 Case Study: Niagara Falls Zombie Fight Project City informed one bank/servicer they had 17 zombies: 14 properties had code violations; 12 were fixed 2 properties were unsafe; bank paid $75K for demolition City working with the bank/servicer to speed up disposition of property Once foreclosure is complete, houses can be auctioned off to new owners 22

23 23 Land Use Strategies & Tools

24 24 The Comprehensive Plan Include existing building inventory: residential, industrial, commercial and historic properties Identify: vacancy rates, property age and condition Include: housing needs assessment, demographics report, economic development study Identify areas for redevelopment and preservation, targeted infrastructure Set timelines for achieving goals Town Law 272-a Village Law City Law 28-a

25 25 Strategy: Shared Vision People living in neighborhoods most deeply affected by vacancy and abandonment are best suited to determine a vision Vision is most valuable if it is realistically achievable Should focus on short, mid and longrange goals

26 26 Identifying and Tracking Vacancies Vacant buildings are difficult to count in many municipalities Data is often kept in many places Municipalities often lack a system for tracking vacant commercial and residential properties Establishing and maintaining a vacant building registry can be very difficult Aggregating property conditions can be difficult to identify common problems with properties Tracking tends to be complaint-driven

27 Approaches to Vacancy Accounting Recommendations: Use standardized system for proactively tracking vacancies before they become expensive problems Identify

27 27 Approaches to Vacancy Accounting Recommendations: Use standardized system for proactively tracking vacancies before they become expensive problems Identify municipal department responsible for monitoring vacancies Employ coding system to define types of structural damage sustained Recover maintenance costs through municipal liens

28 28 Strategy: Know Your Local Housing Market It provides context in which all anti-vacancy strategies operate and can determine what will be successful In strong markets, focus on preventing vacancy in the first place Get responsible owners and occupants into vacant properties quickly Facilitating re-occupancy of all properties may be difficult, and fines for code violations may not have transformative effect

29 Data Driven Solutions Growing number of cities are establishing local and regional data warehouses that organize and manage public and private sector

29 29 Data Driven Solutions Growing number of cities are establishing local and regional data warehouses that organize and manage public and private sector data about the status of real property Examples: Status of real property Tax and mortgage foreclosure data Code enforcement cases Water utility shutoffs

30 30 Case Study: Capital District Action Cluster Pilot project with Amsterdam, Gloversville, Schenectady, Troy and the U. at Albany s Center for Technology in Government Uses technology to account for and combat blight Increased availability of data will inform strategic decision making Funded through DOS Local Government Efficiency grant

31 31 Strategy: Code Enforcement Building Code Officers enforce: Uniform Fire Prevention and Building Code NYS Property Maintenance Code

32 The Red X 2015 International Fire Code requires fire departments to placard unsafe vacant buildings Indicates to first responders that building

32 32 The Red X 2015 International Fire Code requires fire departments to placard unsafe vacant buildings Indicates to first responders that building is considered unsafe for emergency personnel Limit fire fighting to outside operations only Does not indicate that building is slated for demolition

zoning outside of settled areas stressing the

33 33 Strategy: Plan for Main Street Comprehensive plans can support redevelopment by: limiting commercial zoning outside of settled areas stressing the importance of maintaining/recreating a vibrant downtown with retail

Supporting downtown anchor projects Façade and building renovations Interior

34 34 Tools: NYS Main Street Program Grant designed to strengthen traditional Main Streets Funding for targeted commercial and residential improvements including: Supporting downtown anchor projects Façade and building renovations Interior commercial/residential building upgrades Streetscape improvements nyshcr.org/programs/nymainstreet/

historic building using a Main Street grant and private funding Project

35 Case Study: The Community Co-Op at Newberry 35 Lyons, Wayne Co. Community Action in Self Help (CASH) renovated the Newberry, a vacant historic building using a Main Street grant and private funding Project includes an artisan s co-op, antique co-op, a certified commercial kitchen and a coffee shop

36 36 Case Study: Main Street Revitalization Beacon, Dutchess Co. 1970/80s: Historic downtown was mostly boarded up 2003: Dia: Beacon Museum opened in former Nabisco Box factory, sparking a Main Street renaissance Zoning promoted dense mixed-use and walkability Rigorous code enforcement

37 37 Tools: Adaptive Reuse Adapting old structures or sites for new purposes presents unique challenges for redevelopment: Environmental remediation Building code issues Physical development costs, often too high for local governments to take on

3-story, 22,000 sq/ft building transformed into 15 apartments, artist space, commercial

38 38 Case Study: Adaptive Reuse Poughkeepsie, Dutchess Co. Hudson River Housing s The Underwear Factory revitalized Middle Main Street Vacant 3-story, 22,000 sq/ft building transformed into 15 apartments, artist space, commercial space with communal kitchen space, and coffee roaster National Register of Historic Places enabled use of state/federal tax credits

39 39 Tools: Community Art Arts and culture help reveal and enhance community identity Community art can attract: Residents Businesses Visitors/tourists Other investments

in Buffalo Incorporates public art as a way to beautify neighborhood

40 40 Case Study: Bailey Fights Blight, Buffalo Community-based project to board up and secure blighted and vacant storefronts along Bailey Avenue in Buffalo Incorporates public art as a way to beautify neighborhood Turning vacant buildings into art begins to change attitudes about the community

41 Tools: Community Gardens Community gardening on vacant lots can improve quality of life Benefits include: Nutritious food, especially in food deserts

41 41 Tools: Community Gardens Community gardening on vacant lots can improve quality of life Benefits include: Nutritious food, especially in food deserts Encouraging social interaction Beautifying neighborhoods Improving air quality Encouraging self reliance Opportunities for recreation, exercise, education, etc.

42 42 Strategy: Brownfield Redevelopment Brownfields are dormant properties where contamination or perceived contamination has impeded investment and redevelopment, making them an economic and environmental drain on localities

Tools: Brownfield Opportunity Areas Program Provides resources to NY communities that return dormant and blighted parcels into productive

43 Tools: Brownfield Opportunity Areas Program Provides resources to NY communities that return dormant and blighted parcels into productive properties Brownfields are transformed from liabilities to community assets that generate: New business, jobs and revenue New housing New public amenities 43

44 44 Community Land Trusts and Land Banks Community Land Trusts Membership-based nonprofits They own/control land to create community assets, including permanent affordable housing CLTs retain ownership of land in a trust and offer long-term leases to tenants, which allow them to keep an eye on condition and affordability Land Banks Quasi governmental entities that return vacant/abandoned and tax foreclosed property to productive use Can acquire and hold property tax free, clear title and back taxes and dispose of property intentionally, not just to highest bidder After sale, they lose rights to it

45 New York State Land Banks 45

46 46 Life Cycle of a Land Bank Land banks acquire abandoned property from county If savable, land bank may rehabilitate it and sell to new owner If unsavable, then demolish and restore lot into productive use

47 47 Common Functions of NYS Land Banks A Market Conduit Land bank can clear title and other issues that keep property from the market Neighborhood Stabilization Land banks can acquire, stabilize, and hold properties until a responsible party comes forward

48 Common Functions of NYS Land Banks Further Local Planning Goals Land banks can advance local planning goals by acquiring and holding properties

48 48 Common Functions of NYS Land Banks Further Local Planning Goals Land banks can advance local planning goals by acquiring and holding properties with long-term planning importance Addressing Legal & Fiscal Challenges Local governments are often limited in handling vacant & abandoned properties

49 Common Functions of NYS Land Banks Historic Preservation Repurposing historic properties can be too costly for local governments, but land banks can play a role in achieving historic

49 49 Common Functions of NYS Land Banks Historic Preservation Repurposing historic properties can be too costly for local governments, but land banks can play a role in achieving historic preservation goals Sustainability Land banks can help prevent further deterioration of buildings that would have to be demolished and can be more creative by piloting deconstruction practices

neighborhood average appraisal was more than $100,000 Land Bank acquired

50 50 Case Study: Land Bank Fredonia (Chautauqua Co.) home was an eyesore in stable neighborhood Appraisal was $17,000; neighborhood average appraisal was more than $100,000 Land Bank acquired it at county tax foreclosure Negotiated with local developer to rehab it After rehab, house sold to new owner

51 Conclusions Time: Revitalizing blight takes time and patience Money: Adequate funding is difficult Partnerships: It takes many people and land use actors to create real, substantial change

51 51 Conclusions Time: Revitalizing blight takes time and patience Money: Adequate funding is difficult Partnerships: It takes many people and land use actors to create real, substantial change Creativity: Municipalities need to be flexible and creative. What works in one place may not work elsewhere Transparency: Public trust is crucial. Public should be involved throughout entire process

52 Resources: Funding Resources Through DOS Local Government Efficiency Grant (LGE) Municipal Restructuring Fund (MRF) Citizens Re-Organization Empowerment Grant (CREG) Brownfield Opportunity Areas Program (BOA) Local Waterfront Revitalization Program (LWRP) Community Services Block Grant (CSBG) Appalachian Regional Commission (ARC) Northern Borders Regional Commission (NBRC) 52

53 53 Other Resources: NYS Department of Financial Services: Zombie Property Maintenance Home Page: To report hazards, blight or other concerns related to vacant/abandoned property call: or visit: New York Land Bank Association:

54 54 New York Department of State Division of Local Government Services Technical Assistance: (518) Counsel s Office: (518) localgov@dos.ny.gov Website:

Distressed & Abandoned Properties: Understanding New York s New Zombie Property Law

Distressed & Abandoned Properties: Understanding New York s New Zombie Property Law NYS Bar Association Local & State Government Law Section January 26, 2017 Presented by Wade Beltramo New York Conference