NJ Future Forum 2012 Problem Properties Sterner
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NJ Future Forum 2012 Problem Properties Sterner

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  • In the last year, we have identified the need for additional tools to help communities gain more control over these properties.

NJ Future Forum 2012 Problem Properties Sterner NJ Future Forum 2012 Problem Properties Sterner Presentation Transcript

  • REUSING PROBLEM PROPERTIES TO CREATE OPPORTUNITIES FOR CITIES Presentation by Diane Sterner Housing and Community Development Network of NJ
  • 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
  • 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
  • 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
  • REUSING PROBLEM PROPERTIES TO CREATE OPPORTUNITIES FOR CITIES CURRENT TOOLS TO HELP RECLAIMAND 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
  • REUSING PROBLEM PROPERTIES TO CREATE OPPORTUNITIES FOR CITIES CURRENT TOOLS (cont’d): Code enforcement powers Nuisance abatement Redevelopment powersThese tools can combine in a powerful way to returnproperties to productive use.More cities and CDCs are using tools creatively as a resultof our partnership
  • REUSING PROBLEM PROPERTIES TO CREATE OPPORTUNITIES FOR CITIESBut More Tools Are Needed We are working on:  Land Banking Proposal  Tax Sale Reform  Expedited Foreclosure for Vacant Properties
  • REUSING PROBLEM PROPERTIES TO CREATE OPPORTUNITIES FOR CITIESLand 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.
  • REUSING PROBLEM PROPERTIES TO CREATE OPPORTUNITIES FOR CITIESLand 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
  • REUSING PROBLEM PROPERTIES TO CREATE OPPORTUNITIES FOR CITIESLand 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
  • REUSING PROBLEM PROPERTIES TO CREATE OPPORTUNITIES FOR CITIESLand 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
  • REUSING PROBLEM PROPERTIES TO CREATE OPPORTUNITIES FOR CITIESLAND 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.
  • REUSING PROBLEM PROPERTIES TO CREATE OPPORTUNITIES FOR CITIES TAX SALE LAW PROPOSAL :The tax foreclosure process is main way fortowns to gain control of problem properties. NJ tax sale law requires auction of tax liens to 3rdparty bidders (unless towns can budget up frontwithin their 2% cap) Result is loss of control over properties and lossof potential revenue.
  • REUSING PROBLEM PROPERTIES TO CREATE OPPORTUNITIES FOR CITIES TAX SALE PROPOSALPurpose: 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: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/ speculatorsIn drafting phase nowExpect to have legislation introduced by the restart of thelegislative session
  • REUSING PROBLEM PROPERTIES TO CREATE OPPORTUNITIES FOR CITIESEXPEDITED MORTGAGE FORECLOSURE FOR VACANT PROPERTIES:Purpose: Accelerate process to preserve homes andprevent neighborhood deteriorationIncluded in new Residential Foreclosure TransformationBill (S.1566)Judge can expedite foreclosure if there is no legalresident or tenant for 45 days or more.
  • REUSING PROBLEM PROPERTIES TO CREATE OPPORTUNITIES FOR CITIES HOW YOU CAN GET INVOLVED:Help get local resolutions enacted in support ofLand Banking legislationWrite letters to the editor about the need for toolsto repurpose problem propertiesMeet with your state officials about the need forthese tools Sponsor activities in your community to createmomentum for better solutions
  • REUSING PROBLEM PROPERTIES TO CREATE OPPORTUNITIES FOR CITIES COMING UP The Second Institute for Community Leadership September 11 & 12 Location TBD
  • 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)