Across New York State, the Great Recession housing collapse mired thousands of houses in foreclosure limbo, creating so-called “zombie” homes that are a drain on resources and neighborhoods. But communities where such properties languish are finally getting support, as LISC deploys $12.6 million from an Attorney General settlement for “zombie relief” grants to partners in 76 municipalities. An article in Shelterforce explains how LISC’s expertise is helping bring those homes back to the land of the living.
The excerpt below is from:
Bringing “Zombies” Back to Life
by Katharine Greider, Shelterforce
For years, code enforcement officers in the Western New York state Town of Cheektowaga had been aware of decaying properties in their midst, but finding a party to cite for code violations had been difficult, and getting compliance was nearly impossible. In some cases, town officials watched in frustration as heavy winters further deteriorated a vacant home, turning it from a local asset to eyesore, and then hazard. A worst-case scenario was that the home would end its life as a ruin, to be demolished and carted away at a cost of thousands or even tens of thousands of dollars—paid for by local taxpayers.
Since the collapse of the housing market after the Great Recession, thousands of properties stuck in foreclosure limbo—also called zombie properties—have been left vacant and deteriorating in towns and cities across the state. With the owner of record long gone and the bank showing little progress toward taking possession, the burden of maintaining these semi-foreclosed properties has often fallen on strapped municipal governments.
Using funds from a settlement between the New York State Attorney General Eric T. Schneiderman and a major bank over misconduct that led to the housing crisis, 76 New York municipalities are working to push these homes back into productive use. In the process, they are gaining fine-grained intelligence about clusters of vacant homes in their neighborhoods and developing preventative tools that can protect and benefit their communities into the future.
In early 2016, the Local Initiatives Support Corporation (LISC) was enlisted to deploy and steward $70 million of the settlement. The settlement funds are in place to create and preserve affordable housing across the state and support 11 of its land banks—nonprofit entities empowered to acquire distressed properties at low cost and rehabilitate them when possible.
The “zombie relief” grants represent $12.6 million of the settlement, and will support the capacity of New York municipalities to inventory vacant and abandoned homes, dig into the causes of vacancy, step up code enforcement, and innovate policies that can put an end to the phenomenon. The grants are also connecting local governments with the specialized nonprofits to reach out to at-risk homeowners to offer foreclosure prevention counseling.
Grants are prioritized to towns and cities with at least 100 vacant properties. Through monthly check-ins with grantees, LISC is gathering insight from across the network, sharing it in real time, and brainstorming. Some towns, for example, are finding that they need to upgrade technology for code enforcement officers; others are discovering a need for legal research and representation.
“If you put more effort at the front end, at prevention and early intervention, even with limited resources you can do more to avoid blight,” says LISC’s Helene Caloir. “You can manage it in a way that doesn’t create this terrible cycle.”