New York's eight land banks can apply for funding to rehabilitate vacant and abandoned properties; funds will be drawn from last year's $25 billion settlement with nation's largest banks
Attorney General Eric T. Schneiderman has announced the opening of a competitive request for applications process for funding to rebuild and restore neighborhoods hit hard by the housing crisis. Applications are available on the OAG website. Funding will be allocated in two rounds. Land banks authorized under the Land Bank Act of 2011 are eligible to apply. The deadline for submitting an application in the first round is Sept. 15, 2013. Funding decisions for the first round will be announced in mid-October.
"Communities across the state are blighted by vacant and abandoned properties, a problem made worse by the foreclosure crisis," Schneiderman said. "Today, we are taking an important step toward solving the problem. Land banks are a proven tool for redeveloping abandoned properties and revitalizing communities. By dedicating money from the National Mortgage Settlement to land banks across New York, we'll empower local communities to rebuild their own neighborhoods, house by house, block by block."
During the decade of the housing boom and bust, from 2000-10, the number of vacant properties in New York increased 27 percent. Following the collapse of the housing market, the State Legislature passed a bill in 2011 establishing land banks that could acquire vacant, abandoned or foreclosed properties, and choose to rebuild, demolish or redesign them. By restoring vacant or abandoned properties, land banks aim to lower costs for local governments, benefit public schools, reduce crime and boost the local economy.
Since the passage of this legislation, however, no state or federal funds have been dedicated to any of New York's land banks. The attorney general announced on June 26 that his office would make funding available for land banks through a competitive application process to enable the land banks to fulfill their intended purpose: reviving neighborhoods still recovering from the housing collapse and the ensuing foreclosure crisis.
To assist in the administration of this program, the office of the attorney general has selected Enterprise Community Partners, a national nonprofit that specializes in the creation of affordable housing and community development initiatives. Enterprise has a 30-year track record of working with public and private partners to expand access to affordable housing in vibrant communities.
"The acquisition and rehabilitation of foreclosed properties will not only help stabilize properties, but also reinvigorate communities still recovering from the housing crisis," said Alma Balonon-Rosen, director of relationship management, northeast region, Enterprise Community Partners. "Enterprise is committed to creating stable homes and building strong neighborhoods, and we look forward to working closely with the office of the attorney general to help revitalize and restore the vibrancy of communities throughout New York state."
Eight land banks have been officially designated in New York state; under the state authorizing legislation, another two land banks may be established pending an application process. The eight existing land banks in New York state are located in:
The AG's camp said that, while abandoned and vacant properties depress property values, discourage property ownership, and attract criminal activities in the surrounding area, a land bank provides tools to quickly turn these properties back into assets that reinvest in the community's long-term vision for its neighborhood. Land bank programs act as an economic and community development tool to revitalize blighted neighborhoods and business districts. Land banks can benefit urban schools, improve tax revenues, expand housing opportunities, remove public nuisances, assist in crime prevention and promote economic development.
By transferring vacant and abandoned properties to responsible landowners, local governments benefit because they avoid the significant cost burden of property maintenance, like mowing and snow removal. In addition, local governments benefit from increased revenue because the new owners pay taxes on the property. In turn, local schools benefit because they receive more funding when there is an increase in property owners in their school districts. Land bank programs can also increase the variety of mixed-income housing offered and provide more opportunities for affordable housing.
Land bank properties that become owner-occupied discourage criminal activity, benefiting public safety and decreasing the cost burden on the local police and fire departments. Finally, the more residents and businesses that occupy property in a neighborhood, the more services and amenities will be needed, which boosts local economic activity.