nj future forum 2012 problem properties sterner

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REUSING PROBLEM PROPERTIES TO CREATE OPPORTUNITIES FOR CITIES Presentation by Diane Sterner Presentation by Diane Sterner Housing and Community Development Network of NJ Housing and Community Development Network of NJ

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Page 1: NJ Future Forum 2012 Problem Properties Sterner

REUSING PROBLEM PROPERTIES TO CREATE OPPORTUNITIES FOR CITIES

Presentation by Diane SternerPresentation by Diane SternerHousing and Community Development Network of NJHousing and Community Development Network of NJ

Page 2: NJ Future Forum 2012 Problem Properties Sterner

REUSING PROBLEM PROPERTIES TO CREATE OPPORTUNITIES FOR CITIES

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

Restoring Vacant and Problem Properties is Restoring Vacant and Problem Properties is Critical to:Critical to:

Page 3: NJ Future Forum 2012 Problem Properties Sterner

REUSING PROBLEM PROPERTIES TO CREATE OPPORTUNITIES FOR CITIES

Challenges in New Jersey’s CitiesChallenges in New Jersey’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

Page 4: NJ Future Forum 2012 Problem Properties Sterner

REUSING PROBLEM PROPERTIES TO CREATE OPPORTUNITIES FOR CITIES

USING EXISTING PROPERTY INVENTORY USING EXISTING PROPERTY INVENTORY BETTER CAN: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

Page 5: NJ Future Forum 2012 Problem Properties Sterner

REUSING PROBLEM PROPERTIES TO CREATE OPPORTUNITIES FOR CITIES

Accelerated tax foreclosure for abandoned properties

Abandoned property list Spot blight eminent domain Vacant property registration ordinance Creditor responsibility law for properties in

foreclosure

CURRENT TOOLS TO HELP RECLAIM AND CURRENT TOOLS TO HELP RECLAIM AND PRESERVE PROBLEM PROPERTIES IN NJ:PRESERVE PROBLEM PROPERTIES IN NJ:

Page 6: NJ Future Forum 2012 Problem Properties Sterner

REUSING PROBLEM PROPERTIES TO CREATE OPPORTUNITIES FOR CITIES

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

CURRENT TOOLS (cont’d):CURRENT TOOLS (cont’d):

Page 7: NJ Future Forum 2012 Problem Properties Sterner

REUSING PROBLEM PROPERTIES TO CREATE OPPORTUNITIES FOR CITIES

We are working on: Land Banking Proposal Tax Sale Reform Expedited Foreclosure for Vacant

Properties

But More Tools Are NeededBut More Tools Are Needed

Page 8: NJ Future Forum 2012 Problem Properties Sterner

REUSING PROBLEM PROPERTIES TO CREATE OPPORTUNITIES FOR CITIES

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 authoritiesnonprofit entities.

Land Banking Proposal (A.1648/S.583):Land Banking Proposal (A.1648/S.583):

Page 9: NJ Future Forum 2012 Problem Properties Sterner

REUSING PROBLEM PROPERTIES TO CREATE OPPORTUNITIES FOR CITIES

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

Land Banking Proposal (A.1648/S.583):Land Banking Proposal (A.1648/S.583):

Page 10: NJ Future Forum 2012 Problem Properties Sterner

REUSING PROBLEM PROPERTIES TO CREATE OPPORTUNITIES FOR CITIES

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

Land Banking Proposal (A.1648/S.583):Land Banking Proposal (A.1648/S.583):

Page 11: NJ Future Forum 2012 Problem Properties Sterner

REUSING PROBLEM PROPERTIES TO CREATE OPPORTUNITIES FOR CITIES

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

Land Banking Proposal (A.1648/S.583):Land Banking Proposal (A.1648/S.583):

Page 12: NJ Future Forum 2012 Problem Properties Sterner

REUSING PROBLEM PROPERTIES TO CREATE OPPORTUNITIES FOR CITIES

LAND BANKS HAVE PUT THOUSANDS OF LAND BANKS HAVE PUT THOUSANDS OF PROPERTIES BACK ON THE TAX ROLLS IN PROPERTIES BACK ON THE TAX ROLLS IN

OTHER PLACES: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.

Page 13: NJ Future Forum 2012 Problem Properties Sterner

REUSING PROBLEM PROPERTIES TO CREATE OPPORTUNITIES FOR CITIES

TAX SALE LAW PROPOSALTAX SALE LAW PROPOSAL::

The tax foreclosure process is main way for The tax foreclosure process is main way for towns to gain control of problem properties.towns to gain control of problem properties.

NJ tax sale law requires auction of tax liens to 3NJ tax sale law requires auction of tax liens to 3rdrd party bidders (unless towns can budget up front party bidders (unless towns can budget up front within their 2% cap)within their 2% cap)

Result is loss of control over properties and loss Result is loss of control over properties and loss of potential revenue.of potential revenue.

Page 14: NJ Future Forum 2012 Problem Properties Sterner

REUSING PROBLEM PROPERTIES TO CREATE OPPORTUNITIES FOR CITIES

TAX SALE PROPOSALTAX 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

Page 15: NJ Future Forum 2012 Problem Properties Sterner

REUSING PROBLEM PROPERTIES TO CREATE OPPORTUNITIES FOR CITIES

TAX SALE LAW PROPOSALS:TAX SALE LAW PROPOSALS:Benefits:

Towns could acquire liens selectively for targeted strategies or in bulkProperties not redeemed could be foreclosed and conveyed for redevelopmentDTANs 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

Page 16: NJ Future Forum 2012 Problem Properties Sterner

REUSING PROBLEM PROPERTIES TO CREATE OPPORTUNITIES FOR CITIES

EXPEDITED MORTGAGE FORECLOSURE FOR EXPEDITED MORTGAGE FORECLOSURE FOR

VACANT PROPERTIES: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.

Page 17: NJ Future Forum 2012 Problem Properties Sterner

REUSING PROBLEM PROPERTIES TO CREATE OPPORTUNITIES FOR CITIES

Help get local resolutions enacted in support of Land Banking legislationWrite letters to the editor about the need for tools to repurpose problem propertiesMeet with your state officials about the need for these tools Sponsor activities in your community to create momentum for better solutions

HOW YOU CAN GET INVOLVED:HOW YOU CAN GET INVOLVED:

Page 18: NJ Future Forum 2012 Problem Properties Sterner

REUSING PROBLEM PROPERTIES TO CREATE OPPORTUNITIES FOR CITIES

COMING UPCOMING UP

The The Second Institute for Second Institute for

Community LeadershipCommunity Leadership

September 11 & 12September 11 & 12Location TBDLocation TBD

Page 19: NJ Future Forum 2012 Problem Properties Sterner

REUSING PROBLEM PROPERTIES TO CREATE OPPORTUNITIES FOR CITIES

THANK YOU!THANK YOU!

HCDN Contact info: [email protected] or [email protected]

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