Broken windows, boarded-up doors, overgrown lawns. These are just a few signs of the abandoned, dilapidated so-called “zombie homes” that can wreak havoc on neighborhoods.
Officials assert that zombie homes, those neglected houses stuck in prolonged foreclosure proceedings, can be magnets for crime and drag down surrounding property values. But a new $13 million statewide initiative aims to give a select group of communities a helping hand to deal with the blight.
The Zombie Remediation and Prevention Initiative invited the 100 communities in New York that have the most significant zombie-home problem to apply for a piece of that funding. Among the group were four Westchester cities: Yonkers, Peekskill, Mount Vernon and White Plains.
“This new grant initiative puts tools directly in the hands of towns and cities across the state to reverse course, rebuild from the foreclosure crisis and put zombie homes in the rear-view mirror,” Attorney General Eric T. Schneiderman said in a statement.
There are at least 16,000 zombie homes across the state based on data released by Realty Trac, a California-based realty information company. According to a report from the Independent Democratic Conference, bank-owned foreclosed homes in Westchester County have caused more than $9.2 million in house value depreciation. The IDC also reported 49 bank-owned homes and 91 zombie properties in the 40th Senate District, which includes parts of Westchester, Dutchess and Putnam counties. In total, there are 247 zombie properties in Dutchess County and 114 in Putnam County.
The new grant initiative aims to boost municipalities’ ability to enforce housing codes, improve their ability to track and monitor vacant properties and up their enforcement capacity to ensure banks and mortgage companies comply with local and state law. Funding will be drawn from Morgan Stanley’s $3.2 billion settlement with state and federal authorities over its creation of mortgage-backed bonds prior to the global financial crisis.
Syracuse Mayor Stephanie A. Miner said in a statement that this program will support cities as they continue to deal with issues presented by zombie properties, adding that rehabbing blighted properties will improve the quality of life for neighborhoods statewide, as well as generate more property-tax revenues.
The program will be run by the Local Initiatives Support Corp., a national community development intermediary specializing in affordable housing, economic development, and community revitalization. All municipalities invited to participate in the funding have populations of at least 5,000 residents and at least 100 vacant and abandoned properties.
The grants come on the heels of a state law passed earlier this year that imposes new rules on banks, requiring them to maintain abandoned houses before foreclosures are completed or face civil penalties of up to $500 per day. That law also establishes a statewide electronic registry of vacant and abandoned properties, along with a hotline where community members can report those sites.
“It’s too early to say that (the new legislation) is making an impact, but everyone is very optimistic,” said Madeline Fletcher, director of the Newburgh Community Land Bank. Newburgh was one of four Orange County municipalities invited to participate in the new grant program.
But Peekskill Mayor Frank Catalina, who estimates around 20 to 30 zombie houses in his home city, said legislation like this “just adds to the problem.”
As part of the Zombie Remediation and Prevention Initiative, the grants require communities to develop programs for at-risk homeowners to help them avoid foreclosure, something Catalina believes only amplifies the underlying issue.
“It looks like another intermediate step to keep them in occupancy,” Catalina said.
“If it in any way slows down the turnover and foreclosure process, it’s really just putting a Band-Aid on a cancer,” he said. “It’s not getting people in there that can afford the maintenance and the upkeep.”
Fletcher said that the Land Bank is investing more than $75,000 in almost every building it acquires “just to make it developable or just to get it to a point where it’s a reasonable investment for a homeowner or a developer.”
The Newburgh Community Land Bank, which has acquired around 70 properties and has sold or is actively under development on about 50 of those, has seen “a lot of new interest” in vacant properties in recent months, according to Fletcher.
“We see prices are kind of eking up,” she said. She estimates around 600 vacant properties in the city today, down from a 2010 study that identified 700 vacant buildings in Newburgh.
“I think the trend (in vacant properties) is downward, but it’s a long haul,” she said.
Catalina agreed that while there seems to be a similar trend in the number of zombie properties in Peekskill, he attributes that more to delinquent borrowers remaining in their homes longer during the foreclosure process than an actual decrease in the number of foreclosures.