In an op-ed for the New York Daily News, New York Attorney General Letitia James and LISC president Denise Scott describe how communities and local governments can turn the tide on vacant and so-called “zombie” homes that drive crime, sap the resources of municipalities and undermine the wellbeing of Black and brown people and their neighborhoods. A New York State law, proceeds from an Attorney General settlement with banks responsible for the foreclosure crisis, and a groundbreaking initiative stewarded by LISC have helped municipalities across New York State can show the way forward in the post-pandemic era.
The op-ed below was originally published on New York Daily News:
Vacant homes and New York’s future
When our economy faces broad shocks, like during the Great Recession or as a result of a public health disaster like COVID-19, disinvested communities are affected most. Those impacts often leave an enduring scar on neighborhoods in the form of newly vacant and abandoned houses. Deteriorating, empty homes reflect a devastating loss of wealth and place for individual families. They also pose an ongoing threat to the community itself by dragging down neighbors’ home values, inviting crime, and burdening municipalities with added maintenance while at the same time shrinking tax revenues. Black homeowners, whose properties are already undervalued as a result of systemic racism, are often impacted most.
As low-income communities of color continue to bear the brunt of the pandemic’s impacts, policymakers have braced for a spiraling vacancy crisis. Fortunately, New York has developed an effective, if unconventional, toolbox of legislation and strategy that has greatly alleviated the negative effects of vacancy since the foreclosure crisis in the wake of the Great Recession. Similar approaches can help today.
New research finds that the state’s past approach worked because of three key components: an innovative state law, a $12.6 million infusion of funding from the New York State Attorney General Office’s settlements with banks that contributed to the national foreclosure crisis, and a grant program that supported local governments’ capacity to inventory and maintain vacant homes. Those elements offer a roadmap for how New York State can continue to support municipalities in adapting equitable and more efficient practices as well as for other states and communities across the country grappling with increased vacancy.
In 2016, the state Legislature passed the Abandoned Property Neighborhood Relief Act, which made lenders accountable for maintaining “zombie” houses — homes where a foreclosure has been threatened or initiated but not completed, leaving the property in legal limbo. Under this law, creditors must keep the property maintained and secure while they complete the foreclosure process, or face fines. Banks also are required to list their zombie properties in a state registry.
Local governments typically focus on enforcing housing codes on occupied, not vacant, homes. In order to make sure that fines could be enforced, the Attorney General’s Office partnered with the Local Initiatives Support Corporation to use a portion of the hundreds of millions of dollars obtained through settlements with large financial institutions to provide grants to local governments to focus on zombie and other vacant housing. These grants allowed municipalities to hire additional staff or invest in new systems and technical support to help with their work.
Through that process, more than 76 municipalities across New York shifted from a complaint-driven, reactive code enforcement program to a more proactive, strategic approach. That shift required local governments to get creative to figure out how many vacant homes existed in this “limbo” state, and do everything from tracking utility shut-off data to implementing drive-by “windshield” surveys and in-person inspections. As a result, in just a couple of years, 11,000 homes across the state were returned to occupancy and the tax rolls.
The program allowed every municipality to tailor their approach to local needs. New York City, for example, used its grant to create its first comprehensive vacancy database. It used statistical models and exterior surveys to identify zombie homes, and developed an app with photos to document maintenance issues. The city brought ten lawsuits against banks not meeting the zombie law’s maintenance requirements. The results of these lawsuits have given city officials additional leverage in negotiations with banks and officials. Now they can often bring lenders into compliance with just a phone call.
Meanwhile, Ogdensburg, a town of around 10,000, used the funds to develop an innovative property-tax amnesty program that helped dozens of families stay in their homes.
Crises will come and go. To protect families and communities from aftershocks that turn cherished homes into empty and deteriorating liabilities, New York should continue to provide resources to ensure code enforcement is smartly reacting to the needs of their communities and other states should follow New York’s example. That means crafting comprehensive vacant-property laws to require maintenance and move properties swiftly toward productive reuse. We must also help low-resourced municipalities understand and address vacancy — including giving them resources to prevent foreclosures in the first place.
These initiatives, paired with federal investments in community development to fund house repairs and renovations, can help local places become more resilient in the face of the impacts of pandemic or other disasters that may come, with every occupied and well-maintained house a sign of community — and individual — wellbeing.