Schneiderman announces nearly $13 million in awards for cities to combat vacant and zombie homes

The zombie remediation and prevention initiative provides nearly $13 million to 76 towns, cities and villages statewide; funding will support their efforts to reverse the proliferation of vacant and abandoned properties and help families avoid foreclosure

Attorney General Eric T. Schneiderman announced grant awards totaling $12.6 million to help 76 cities, towns, and villages across the state address the problem of vacant properties and so-called "zombie homes" - vacant and abandoned homes that are not maintained during a prolonged foreclosure proceeding. (See below for a list of local grant awards.)

The grants were awarded under the zombie remediation and prevention initiative, which the Office of the Attorney General established in July with funds drawn from the $3.2 billion settlement agreement with Morgan Stanley that Schneiderman, as co-chair of the federal-state working group on residential-mortgage-based securities, negotiated in February. That settlement generated $550 million in cash and consumer relief for New Yorkers.

The Local Initiatives Support Corp., a national community development intermediary that specializes in affordable housing, economic development and community revitalization, is overseeing the initiative; selected the grantees; and will be providing technical assistance to the funded municipalities as they implement their plans.

"Too many homeowners across New York are still struggling to rebuild their communities in the wake of the housing crisis caused by major banks," Schneiderman said. "I'm proud that the funding obtained by my office's settlement with Morgan Stanley will now help cities and towns across the state reverse the proliferation of zombie properties, which invite crime and threaten the value of surrounding homes. These grants will help rebuild, revitalize and stabilize communities across the state."

"LISC is thrilled to be awarding $12.6 million in grants to cities, towns and villages, in partnership with Attorney General Schneiderman, to combat their zombie and vacant properties," said Denise Scott, LISC's executive vice president for programs. "We can't wait to work with mayors and supervisors and their communities, in places urban, suburban and rural, all over New York state. Together, we'll fight the blight!"

The money will address housing vacancy and blight by bolstering municipalities' capacity for housing code enforcement, for tracking and monitoring vacant properties, and for legal enforcement capacity to ensure banks and mortgage companies comply with local and state law.

The initiative coincides with the June passage of the Abandoned Property Neighborhood Relief Act, a bill the attorney general wrote. Among other provisions, that law requires banks to register any properties abandoned by their owners with the Department of Financial Services, and to maintain those properties during the foreclosure process, and not just once the process has been completed. Banks face significant fines for noncompliance. The state will share the registry with localities and will run a toll-free hotline for individuals to report such properties.

Grants ranged from $52,500 to $350,000, and were awarded to municipalities as large as New York City, with a population of 8.5 million and an estimated 9,692 vacant properties, and the Town of Hempstead, with a population of 760,000 and an estimated 1,286 vacant properties; and as small as the Town of Ticonderoga, with a population of 5,042 and an estimated 104 vacant properties.

Examples of funded projects include the following:

•The City of Syracuse will use $180,000 of its funding for its "Blight Busting Program": To seed a revolving fund to pay for "cut and clean" efforts to maintain vacant and zombie properties. The charges will be added to the tax bill on the property and the funds recycled for other maintenance efforts.

•The City of Amsterdam will conduct surveys of vacant properties and establish a vacant properties database.

•The Town of Colonie will establish a vacant property unit to streamline and synchronize the town's vacant property elimination efforts.

All the funded proposals include a prevention component, to connect at-risk homeowners to services so they can avoid foreclosure and stay in their homes.

Municipalities with populations of at least 5,000 residents and at least 100 vacant and abandoned properties were invited to apply for the funds through a competitive application process. Funding decisions were based on the following criteria: the number of abandoned properties within the municipality; the proportion of such properties compared to the overall size of the municipality; its level of general economic distress; and its demonstrated interest in addressing the problem of housing vacancy and blight. In total, 108 municipalities were invited to apply for funding; 76 submitted proposals; and all were awarded grants.

While accurate numbers have been hard to come by, it has been estimated, based on data released by Realty Trac in 2015, that there are some 16,000 zombie homes across the state.

The Abandoned Property Neighborhood Relief Act allows the state, for the first time, to accurately track the number of abandoned properties and ensure their upkeep. The zombie remediation and prevention grants allow cities and towns across the state to maximize the impact of the law and to partner with the state in addressing the blight of abandoned properties.

The zombie remediation and prevention initiative is one component of Schneiderman's strategy to help New York families and communities recover from the housing crash. He has led the fight for strong bank settlements that hold the banks accountable for their recklessness and responsible for mitigating the damage they caused. He has obtained settlements that brought more than $95 billion to communities across the country.

More than $5.5 billion of that settlement money has flowed into New York. With that settlement money, the office of the attorney general has:

•Established the homeowners protection program, HOPP, in 2012, which currently funds 90 agencies across the state and has provided legal services and counseling to help nearly 65,000 families stay in their homes and avoid foreclosure. Nearly a third of them have mortgage modifications pending or approved.

•Established the New York State Mortgage Assistance Program in 2014. Since it began, MAP has provided $18 million in small loans to homeowners to clear other debts and qualify for mortgage modifications. It has prevented more than 650 foreclosures and preserved $153 million in property value for nearby homeowners.

•Allocated some $30 million from settlement monies toward land banks - local, nonprofit entities that purchase and rehabilitate abandoned properties. To date, the first 10 of these land banks have restored hundreds of abandoned properties to productive use. Recently, settlement money helped establish five additional land banks, and a sixth is in the process of getting certified.

•Launched "Neighbors for Neighborhoods" in August, a $4 million pilot program that will enable land banks to provide subsidies for local community members to take over individual, abandoned properties and convert them into long-term affordable rental units.

"We are grateful for this grant, which allows HPD to increase direct outreach to families in foreclosure and also develop individual and targeted plan‎s to secure 'zombie properties,' or abandoned homes - many of which are not being properly maintained, are creating blight and hurting our neighborhoods," said New York City Department of Housing Preservation and Development Commissioner Vicki Been. "Bottom line, the funds help us continue to stabilize affordable homeownership in many neighborhoods still recovering from the mortgage crisis."

"The City of Niagara Falls is thankful to LISC for this innovative opportunity, and to Attorney General Schneiderman for his leadership in the fight against blighted, abandoned properties," Niagara Falls Mayor Paul Dyster said. "The Niagara Falls Zombie Fight Project will use better technology and data-based strategies to address vacancy and, most importantly, responsibility in our neighborhoods. This grant allows us to focus in on this issue with a level of resource that is often not available to local municipalities." 

Grant recipients:

City	Grant Award
City of Buffalo	$ 350,000
City of Dunkirk	$ 125,500
City of Elmira	$ 149,295
City of Jamestown	$ 147,970
City of Lackawanna	$ 100,000
City of Lockport	$ 150,000
City of Niagara Falls	$ 250,000
City of North Tonawanda	$ 90,000
City of Rochester	$ 350,000
City of Syracuse	$ 350,000
City of Tonawanda	$ 150,000
New York City	$ 350,000
Town of Amherst/Williamsville Village	$ 350,000
Town of Cheektowaga	$ 250,000
Town of Tonawanda	$ 250,000
Town of West Seneca	$ 175,000
Town/Village of Hamburg	$ 175,000
Village of Albion	$ 75,000