N.Y. Invests $20M in Settlement Funds to Rehabilitate Vacant Properties
New York Attorney General Eric Schneiderman will use up to $20 million in mortgage settlement funds provided by the nation’s top five banks to rebuild and restore neighborhoods that are still struggling with blight and large inventories of vacant properties.
The task is assigned to so-called land banks through a competitive application process.
In 2011 New York State legislators established “land banks” whose intended purpose is to acquire vacant, abandoned, or foreclosed properties, and choose to rebuild, demolish, or redesign them, as a way to lower redevelopment costs for local governments.
Settlement funds represent the first allocation earmarked for land banks across New York.
According to Schneiderman, roughly $2 billion in relief provided by the state so far to struggling homeowners is not nearly enough. “It will take innovative approaches like this—driven and managed by those who know the community best—to boost local economies and finally put this crisis behind us,” he said.
Funds are critical for upstate land banks, such as the Syracuse Land Bank because in Syracuse nearly 2,000 properties are unoccupied and have turned into blighted structures, said U.S. Rep. Dan Maffei. Central New York communities benefit if land banks “acquire these properties and work with buyers to responsibly redevelop and repurpose them” in more than one way by helping create jobs, he added.
The city and county have collaborated to get the Syracuse Land Bank, “one of the first land banks in the state, up and running,” said Syracuse Mayor Stephanie Miner.
After Onondaga County and the City of Syracuse formed the first land bank in 2012, seven more land banks were established throughout the state.
“Utilizing funds from the national mortgage settlement,” the AG said, his office will review proposals from these land banks in New York State and award funds in two rounds, during a two-year period.
Once land owners take over these properties they will shoulder property maintenance costs and generate revenue for local governments, create mixed-income and affordable housing opportunities, discourage criminal activity and boost local economic activity. The final goal, however, is to turn land bank properties into owner-occupied homes.