nj future forum 2012 problem properties sterner
TRANSCRIPT
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
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:
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
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
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:
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):
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
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):
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):
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):
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):
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.
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.
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
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
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.
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:
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
REUSING PROBLEM PROPERTIES TO CREATE OPPORTUNITIES FOR CITIES
THANK YOU!THANK YOU!
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