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Funding uncertain as new "land banks" move forward
Newly formed "land banks" in upstate New York are moving forward, despite uncertainties on just how they'll work - or be funded.
The quasi-public entity in Syracuse recently presented a plan to the city to begin foreclosing on its approximately 3,900 vacant and tax delinquent properties, but there are still unanswered questions.
This spring New York approved the creation of five land banks. The land banks are new agencies with the goal of handling vacant and tax delinquent properties and returning them to the tax rolls.
Along with the one in Syracuse, Erie County and the Capital Region were approved to create land banks.
They face a tall order. For example: almost one-tenth of property in Syracuse is vacant or delinquent, according to the Office of Planning and Sustainability.
There are 73,360 delinquent properties in Erie County.
As populations in upstate New York cities have declined, vacant properties have increased. At the same time, those cities are starving for revenue sources as budget deficits pile up.
chicken or the egg
The Greater Syracuse Property Development Corp. wants to move forward with its plan to foreclose on thousands of properties, but one issue dogs the body: funding.
It's a bit of a "chicken or the egg" dilemma for the Syracuse land bank.
Foreclosing on 3,900 properties will take about three years, according to city planner Katelyn Wright.
The lengthy foreclosure process will certainly involve lawyers, and once seized properties come into the possession of the land bank they'll need to be maintained until ideally, they're resold.
Wright says the plan right now is for revenue collected from delinquency payments in excess of the normal annual levels to be directed toward the land bank.
"The idea is that by threatening to foreclose on properties that haven’t paid their taxes, the city will collect more revenue on time going into the future; probably $2 million a year more each year," Wright says.
But the land bank can't begin collecting revenue until it starts sending out the foreclosure notices. Right now Wright and others involved are working on the city's dime. (Board members for the land bank are volunteers.)
The bank's idea needs to be approved by the Common Council. Currently all revenue goes to the city.
"One of the things that proved to be a disappointment, at least for me, is that back in March when we passed this, we were lead to believe that there was a possibility that there would be some money that went with it," says councilor Jean Kessner. "That hasn’t happened."
Syracuse hasn't foreclosed on a property since 2008, according to Kessner, because it's risky and expensive to take on vacant properties. A city also cannot move forward with a foreclosure unless a potential buyer comes forward.
Right now Syracuse has given its blessing for its legal council to work with the land bank through the end of the year, according to Kessner. Wright says foreclosure notices would begin going out in November, if the council signs off on the plan.
"This is about neighborhoods," says Kessner. "So to me, the balancing act is how do we get a land bank that will help - the end game is getting our neighborhoods strong. We can't just say 'here, take all these properties and take all the money from them.'"
"Waiting for funding"
Seed money is what the Capital Region's land bank is going after before it moves forward with a solid plan.
Right now that land bank is targeting the cities of Schenectady and Amsterdam, as well as Schenectady County, but could grow to include up to seven counties in the region, according to County Legislator and land bank board member Bob Hoffman.
The Capital Region land bank is still looking at possible sources of revenue, either from government grants or nonprofits, according to Hoffman.
"We're waiting for some funding, we're waiting for [Schenectady] to kind of settle out what they're going to keep and what they're going to offer to the land bank," he says. "And then we need to do some strategizing."
You can follow reporter Ryan Delaney on Twitter @RyanWRVO