Newark Targets Derelict Property Owners With New Ordinance

NEWARK, NJ — “Blighted” properties can drag a neighborhood down in several ways. That's why a new local law in Newark aims to tackle the problem by penalizing unreachable corporations and absentee lot owners, city officials say.

Earlier this week, the Newark Municipal Council approved an ordinance that will jack up annual registration fees for residential properties if they remain unrenewed. The result? Property owners who abandon their lots will be hit where it hurts – their wallets, according to a statement from the office of Mayor Ras Baraka.

Read the full ordinance here, and watch a video of the Oct. 19 meeting below.

Baraka supported the council’s Wednesday vote, saying that the new ordinance will help stop neighborhood blight and “LLC speculators” who buy up Newark vacant and abandoned properties, then hold them for years without development.

It’s a serious issue in a city where as many as half of all residential properties are owned by corporations – the highest rate in the nation, according to a recent study from the Rutgers Center on Law, Inequality and Metropolitan Equity. Read More: Who Owns Newark? City Fights Back Against Corporate Home Buying Spree

“Vacant, abandoned, and blighted properties cause a cycle of neighborhood deterioration and damage residents’ quality of life,” Baraka said Friday.

According to Baraka’s office, here’s how it will work:

“The registration and fee requirements are designed to prevent abandoned properties and mortgagees from allowing properties to be abandoned, neglected, or left unsupervised. The property registration requirements mandate that abandoned or vacant property owners maintain a place in New Jersey where the person responsible for maintaining and securing the property can be contacted and violation notices or other legal filings be received. The property must be secured against unauthorized entry and contact information for the responsible person must be posted on a sign in front of the property. These rules will prevent abandoned or vacant property owners from vanishing and hiding behind uncontactable LLCs, often registered outside of our state. The annual registration fees for residential properties escalate from $1,000 at initial registration to $3,000 at first annual renewal, $6,000 at second renewal, and $10,000 at any subsequent renewal. This creates a strong incentive for property owners to develop their properties. Owners of abandoned or vacant commercial properties are subject to similar registration requirements, but with annual renewal fees escalating from as little as $15,000 to as much as $75,000 depending on the size of the property.”

But that’s not all, the mayor’s office continued:

“The ordinance also contains strict requirements for the maintenance of structures that include rules to ensure that the property is not left unsightly or unattractive nor detract from the appearance of the building or the neighborhood. After the first registration is filed, the City Department of Engineering must be given access for inspections. Violations are subject to fines ranging from $500 to $1,000 and the fines are assessed daily until the violation is fixed.”

For properties in foreclosure, the mortgagee will be subject to registration, inspection, security, and maintenance requirements similar to those for abandoned/vacant property owners, Baraka’s office added.

LAND BANK TRANSFERS

During their Wednesday meeting, the council also voted to transfer 89 city-owned vacant or deteriorated properties to the municipal Land Bank, where they can be “prepared for productive reuse and sold to residents or community organizations,” Baraka’s office noted.

To view a list of the properties, click here.

Land banks are a legal mechanism that help towns, cities or counties to buy abandoned, vacant or neglected properties for the public good. Working with a nonprofit or other public entity, governments can then sell the run-down properties to someone who wants to give them a new life.

Gov. Phil Murphy signed a bill clearing the way for land banks across the state in 2019, including in Newark.

It’s a win-win for everyone involved, supporters say. Newark residents get a chance to become homeowners. Vacant eyesores become productive buildings. More affordable and market rate housing is created. And the city gets ratables to help ease the local tax burden.

• See related article: Newark Mayor Says 'Land Banking' Is Powerful Way To Fight Blight
• See related article: Newark 'Land Bank' Hopes To Boost Homeownership

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