Eric Schneiderman for Attorney General

Schneiderman unveils zombie property rehab program

August 23, 2016

As published in the Albany Times Union on August 19, 2016.

It’s the rising of the dead.

The dead homes, that is.

State Attorney Eric Schneiderman was to announce late Friday morning a pilot program that will make available to land banks statewide $4 million for New Yorkers to take over “zombie homes” in their neighborhoods and rehab them into affordable rental housing. Affordable rental rates for those formerly abandoned homes would be required for at least 20 years.

Schneiderman’s office said the state’s 16 non-profit land banks, which includes the Albany County Land Bank, will receive funding part of the $4 million pot, and those land banks will transfer ownership of run-down properties at low or no cost to community members who seek to restore them to livable condition. Roughly $50,000 per unit will be made available to the new property owners to assist with renovations.

Renovations must include exterior work to provide “curb appeal” in hopes of boosting the values of other neighborhood properties.

Schneiderman’s office estimates that up to 80 affordable rental homes will be created out of the $4 million in funding, which will be drawn from settlements with Citigroup and Bank of America stemming from residential-mortgage-based securities cases.

The program will be administered by national real estate investment services company Enterprise Community Partners beginning in the early fall.

“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,” Schneiderman said in a statement. “Neighbors for Neighborhoods helps communities reclaim their neighborhoods from blight and will help generate the affordable housing stock that New York families need. Just as important, it empowers the people who have the most at stake in revitalizing their communities — the community members themselves. This is truly a win-win.”

The scourge of zombie properties, which references properties that have been foreclosed upon and have fallen into disrepair without a bank performing upkeep, has been a Schneiderman target in recent years. The Legislature also has moved to act, passing during the 2016 session legislation that created new maintenance duties for banks and a hotline to report potential zombie properties. That legislation, tucked into a larger omnibus package of miscellaneous policy, promptly was signed by the governor in June.