Residents Will Soon be Able to Buy, Restore Abandoned Homes in their Communities

New York has just announced a new pilot program that will allow residents to buy abandoned properties in their neighborhoods at little to no cost and rehabilitate them into affordable rental housing.

Created with affordable housing and community development nonprofit Enterprise Community Partners (Enterprise), the program requires the new housing units to remain affordable for at least 20 years. Funding for the program will come from the Attorney General’s 2014 and 2015 settlements with Citigroup and Bank of America over the banks’ conduct leading up to the 2008 housing crash.

The program, called Neighbors for Neighborhoods, builds on the success of New York State’s non-profit land banks. Ten of these lands banks have, with support from the Office of the Attorney General, reclaimed over 1,600 abandoned properties across the state since 2013, including the Nassau County Land Bank.

The land banks will be provided with $4 million in subsidies to get the program off the ground. It will be very useful in communities ravaged by Hurricane Sandy, where many properties still sit vacant. These “zombie homes” are an eyesore and a safety risk for surrounding homes.

The initiative was inspired by such successful land bank efforts as 13 Chambers Street in Newburgh. The property, which was acquired by the Newburgh Community Land Bank in 2013, was renovated by a local architect and now provides three families with affordable rental housing.

“Too many communities across this state are still plagued by the blight of vacant and abandoned properties, while at the same time suffering from a critical shortage of affordable housing,” said Attorney General Eric Schneiderman. “Neighbors for Neighborhoods helps communities reclaim their neighborhoods from blight and will help generate the affordable housing stock that New York families need.”

The grant program will be administered by Enterprise, which for more than 30 years has created affordable housing opportunities for low- and moderate-income communities across the country. In early fall, Enterprise will invite the 16 land banks across the state to submit their qualifications and select those land banks that:

• Demonstrate the capacity to oversee the rehabilitation of the properties and enforce the long-term affordable-rental requirement;
• Demonstrate that they are in an area with a concentration of potential rental properties and a set of local community members who have the capacity to own and manage a nearby rental property.

Land banks that meet the requirements will then be able to submit requests for the subsidy on a project-by-project basis.

Once selected, land banks will transfer ownership of the dilapidated properties at low or no cost to the identified community members, provide the new community-based property owners with a subsidy toward the costs of renovation (approximately $50,000 per unit) and dictate the terms and scope of the renovation. Importantly, the renovations must also include exterior rehabs -- to provide “curb appeal,” a critical part of boosting property values in neighborhoods plagued by vacant homes.

In exchange for the property and the renovation subsidy, the new property owners will convert the properties to affordable low- and moderate-income rental units for local families. This $4 million investment is estimated to yield up to 80 affordable rental homes for working families in the cities and towns where land banks are active.

Funding for the initiative will be drawn from the $7 billion settlement agreement with Citigroup and the $16 billion settlement agreement with Bank of America that Schneiderman negotiated in July and August 2014, respectively. Those two settlements together brought $982 million in cash and consumer relief to New York State alone.

Photo: Courtesy Cpl. Bryan Nygaard