1. REUSING PROBLEM PROPERTIES TO CREATE
OPPORTUNITIES FOR CITIES
Presentation by Diane Sterner
Housing and Community Development Network of NJ
2. REUSING PROBLEM PROPERTIES TO CREATE
OPPORTUNITIES FOR CITIES
Restoring Vacant and Problem
Properties is Critical to:
Creating vibrant communities
Improving communities’ bottom line
“If a city can’t control its land, it can’t control its future.”
--- Former Baltimore Mayor Martin O’Malley
3. REUSING PROBLEM PROPERTIES TO CREATE
OPPORTUNITIES FOR CITIES
Challenges in New Jer sey’s Cities
Weak housing market and economy
Foreclosure crisis
State budget problems/cuts in state aid
Market won’t come back easily or on its own
4. REUSING PROBLEM PROPERTIES TO CREATE
OPPORTUNITIES FOR CITIES
USING EXISTING PROPERTY
INVENTORY
BETTER CAN:
Create more homes and jobs
Increase safety and reduce crime
Save money and grow the tax base
New Jersey needs better laws, systems and
strategies to reclaim problem properties
5. REUSING PROBLEM PROPERTIES TO CREATE
OPPORTUNITIES FOR CITIES
CURRENT TOOLS TO HELP RECLAIM
AND PRESERVE PROBLEM PROPERTIES
IN NJ:
Accelerated tax foreclosure for
abandoned properties
Abandoned property list
Spot blight eminent domain
Vacant property registration ordinance
Creditor responsibility law for properties in
foreclosure
6. REUSING PROBLEM PROPERTIES TO CREATE
OPPORTUNITIES FOR CITIES
CURRENT TOOLS (cont’d):
Code enforcement powers
Nuisance abatement
Redevelopment powers
These tools can combine in a powerful way to return
properties to productive use.
More cities and CDCs are using tools creatively as a result
of our partnership
7. REUSING PROBLEM PROPERTIES TO CREATE
OPPORTUNITIES FOR CITIES
But More Tools Are Needed
We are working on:
Land Banking Proposal
Tax Sale Reform
Expedited Foreclosure for Vacant
Properties
8. REUSING PROBLEM PROPERTIES TO CREATE
OPPORTUNITIES FOR CITIES
Land Banking Proposal (A.1648/S.583):
Purpose: to integrate functions needed to acquire
problem properties and return to beneficial use.
Permits towns to designate redevelopment entities to
act as a land bank on their behalf:
redevelopment agencies
housing authorities
county improvement authorities
nonprofit entities.
9. REUSING PROBLEM PROPERTIES TO CREATE
OPPORTUNITIES FOR CITIES
Land Banking Proposal (A.1648/S.583):
Land banks can:
Assemble properties for redevelopment
Provide CDCs with a supply of houses to
rehabilitate
Sell lots to adjacent homeowners to use as side
lots
Redevelop pivotal sites to spur redevelopment
10. REUSING PROBLEM PROPERTIES TO CREATE
OPPORTUNITIES FOR CITIES
Land Banking Proposal (A.1648/S.583):
Land banks may obtain properties through:
Conveyance of city-owned properties
Assignment of city-owned liens or purchasing
liens at tax sale
Carrying out lien foreclosures
Eminent domains
Gifts or purchase
11. REUSING PROBLEM PROPERTIES TO CREATE
OPPORTUNITIES FOR CITIES
Land Banking Proposal (A.1648/S.583):
Other Features:
Formal agreement between town and land bank
Properties may be exempt from taxes if land bank is a non-
profit
Community advisory board will provide input
May serve other municipalities through shared services
agreement
May receive up to 50% of new property taxes for up to 10
years on parcels conveyed to private entities
12. REUSING PROBLEM PROPERTIES TO CREATE
OPPORTUNITIES FOR CITIES
LAND BANKS HAVE PUT THOUSANDS OF
PROPERTIES BACK ON THE TAX ROLLS
IN OTHER PLACES:
30+counties in Michigan have land banks
12+ Ohio counties have or are creating land
banks under a new state enabling law.
NY State is implementing a recently adopted
land bank law
PA legislature is considering a similar
proposal.
13. REUSING PROBLEM PROPERTIES TO CREATE
OPPORTUNITIES FOR CITIES
TAX SALE LAW PROPOSAL :
The tax foreclosure process is main way for
towns to gain control of problem properties.
NJ tax sale law requires auction of tax liens to 3rd
party bidders (unless towns can budget up front
within their 2% cap)
Result is loss of control over properties and loss
of potential revenue.
14. REUSING PROBLEM PROPERTIES TO CREATE
OPPORTUNITIES FOR CITIES
TAX SALE PROPOSAL
Purpose: would allow towns to:
Gain control of tax delinquent properties by presumptive
bid without having to compete with private investors
Acquire liens on tax delinquent properties with no upfront
appropriation.
Issue delinquent tax anticipation notes (DTANs) secured
by these liens, either individually or jointly with other
municipalities.
Permissive legislation - towns are not required to do this
15. REUSING PROBLEM PROPERTIES TO CREATE
OPPORTUNITIES FOR CITIES
TAX SALE LAW PROPOSALS:
Benefits:
Towns could acquire liens selectively for targeted
strategies or in bulk
Properties not redeemed could be foreclosed and
conveyed for redevelopment
DTANs could plug budget gap while allowing town to keep
fees and interest that now go to investors/ speculators
In drafting phase now
Expect to have legislation introduced by the restart of the
legislative session
16. REUSING PROBLEM PROPERTIES TO CREATE
OPPORTUNITIES FOR CITIES
EXPEDITED MORTGAGE FORECLOSURE
FOR VACANT PROPERTIES:
Purpose: Accelerate process to preserve homes and
prevent neighborhood deterioration
Included in new Residential Foreclosure Transformation
Bill (S.1566)
Judge can expedite foreclosure if there is no legal
resident or tenant for 45 days or more.
17. REUSING PROBLEM PROPERTIES TO CREATE
OPPORTUNITIES FOR CITIES
HOW YOU CAN GET INVOLVED:
Help get local resolutions enacted in support of
Land Banking legislation
Write letters to the editor about the need for tools
to repurpose problem properties
Meet with your state officials about the need for
these tools
Sponsor activities in your community to create
momentum for better solutions
18. REUSING PROBLEM PROPERTIES TO CREATE
OPPORTUNITIES FOR CITIES
COMING UP
The
Second Institute for
Community Leadership
September 11 & 12
Location TBD
19. REUSING PROBLEM PROPERTIES TO CREATE
OPPORTUNITIES FOR CITIES
THANK YOU!
HCDN Contact info:
dsterner@hcdnnj.org or sberger@hcdnnj.org
www.hcdnnj.org
Like us on Facebook (facebook.com/hcdnnj)
Follow us on Twitter (twitter/hcdnnj)
Notas del editor
In the last year, we have identified the need for additional tools to help communities gain more control over these properties.