Two and a half years in, land banking takes shape in New York State

(Learn more about what New York”s land banks are up to in the new report,  “New York State Land Banks: Combating Blight and Vacancy in New York Communities.”)

The house at 257 S. Collingwood Avenue is no longer abandoned.

Last December, the Greater Syracuse Land Bank sold it to Shaqir and Zahide Halimi, Kosovar immigrants and longtime Syracuse residents who are fixing up the home for Zahide’s parents to move in and be close to their family.

In just over two years, land banks in New York are already enabling new homeowners to invest in their communities. This is just the beginning, though. Right now, each land bank is still assessing local conditions and developing tailored strategies to fight blight and plan for the future of their communities.

Growing support for a critical tool

Attitudes toward land banking in New York have come a long way in the two and a half years since Governor Andrew Cuomo signed the New York Land Bank Act into law.

“A few years ago, people were pretty skeptical of land banking,” said Dominic Robinson, Director of the Northside Urban Partnership and Deputy Director of Urban Initiatives at CenterState CEO, “but now […] the automatic reaction to problems is, ‘I wonder if the land bank can do something about that?'”

Land banking, of course, is not a silver bullet. As Katelyn Wright, Executive Director of the Greater Syracuse Land Bank, explained, “To effectively combat blight and abandonment land banking needs to be coordinated with a number of other tools that address tax-current vacant properties.” Nonetheless, as Robinson said, “land banking is really one of the more profound tools that we have come to develop.” Supporters expect land banking to be a critical part of the fight to eliminate New York’s blight in coming years.

 

Developing individual identities

Since 2011, eight land banks have been established in New York: The Buffalo Erie Niagara Land Bank Corporation, The Broome County Land Bank Corporation, The Suffolk County Land Bank Corporation, The Chautauqua County Land Bank Corporation, The Greater Syracuse Property Development Corporation (Land Bank), The Land Reutilization Corporation of the Capital Region (Schenectady), The Newburgh Community Land Bank, and The Rochester Land Bank Corporation. Their start-up journeys have been far from identical.

New York State, with highly decentralized regulations and laws, creates a unique context for land banking compared to many other states. In addition to facing local demographic, geographic, and economic differences, land banks have had to adapt to local legal contexts, and have in turn adopted unique characteristics and priorities. Thus, land banking in Onondaga County, for example, looks different from that in Suffolk County.

Syracuse, a city of 145,000 within Onondaga County (which has a population of 467,000), has 1,800 vacant properties. Before the land bank was created, there were 3,800 properties eligible for foreclosure, and the existing collection policies were not adequately addressing the scale of the issue. With the creation of the land bank, however, the City and the County have been able to move towards a comprehensive foreclosure policy, with the land bank taking title of those properties that do not get redeemed. This is resulting in a marked increase in revenue coming into the city, a portion of which is being shared with the land bank to continue its good work. This funding is a significant and unique achievement, but the Greater Syracuse Land Bank has still faced many difficulties.

One of the greatest challenges in Syracuse, where the land bank can only access about 1/3 of the vacant housing stock through municipal foreclosure (the rest are tax-current), is the number of privately owned vacant properties adjacent to those that are publicly owned. This makes it more difficult to assemble adjoining properties for disposition and to address the full scope of a block’s blight.

The situation in Suffolk County, with a population of nearly 1.5 million on eastern Long Island, is notably different.  Forming a land bank has given the County an economically viable mechanism to facilitate the sale and redevelopment of brownfields while protecting its taxpayers from environmental liabilities as a title holder.

Now, the Suffolk County Land Bank has secured funding from the Environmental Protection Agency and the NYS Office of the Attorney General to assess and remediate 22 suspected brownfield sites with tax arrears totaling approximately $8 million, and is starting to develop the environmental assessment tools, planning, and legal analysis needed to return these abandoned sites to positive use and spur economic development

Uncovering common challenges

Despite the diversity among New York’s land banks, common needs have emerged.
In particular, as Madeline Fletcher, the Consulting Director of the Newburgh Land Bank,explained in a video interview with Community Progress, “The biggest common priority for the eight land banks is sustainability. How are all of these very different land banks going to figure out how they can each operate in a way that enables them to exist in the long term?”

 

 

There are some systems in place to ensure funding for land banks in New York, such as the 5/50 tax recapture program, where the land bank receives up to 50 percent of the income generated by properties it puts back into productive use for five years. Generating revenue, however, is difficult for many of New York’s land banks as they get off the ground, and funds have been limited.

When the Buffalo Erie Niagara Land Bank was formed, for example, it relied exclusively on volunteer hours from government employees. “In the beginning we were a little bit overly optimistic,” said Thomas Dearing, Deputy Commissioner of the Environment and Planning for Erie County. “We still have great hope and great plans for land banking in Erie County, but to get the level of Genesee County will take some time,” he continued, referring to the well-established land bank in Flint, Michigan.

“A land bank needs revenue to operate, to address the most challenging properties,” said Robinson. “There are some people in the state that think land banks can work as a developer, but they are taking on properties, many of which are fundamentally worthless. There have got to be ways to get funds not attached to development pay-offs.”

Responding to this need, in June of 2013, New York State Attorney General Eric Schneiderman announced the allocation of up to $20 million in funding for land banks over the next two years, using a portion of the State’s funds from the national mortgage foreclosure settlement with major banks. The grants that were ultimately awarded to 6 out of 8 land banks ranged from $675,000 to $3 million, with the two other land banks receiving technical assistance grants.

The award has been a huge boon. In fact, Dearing said, “The greatest success the Land Bank in Erie County has had so far has been receiving the generous grant from the Attorney General for the next two years.”

Wright added that these funds are critical to the Greater Syracuse Land Bank’s ability to promote and strengthen homeownership in the area. “With the AG funds,” she said, “we can renovate single family homes to develop opportunities for homeownership, whereas private investors are more interested in renovating for rental use.” It is not a long-term solution, but these funds are a critical first step towards building a sustainable future.

 

Speaking with a unified voice

In late 2013, seven of the eight land banks came together for the second New York Land Bank Summit, convened by CenterState CEO and the Center for Community Progress. It was an opportunity for leaders from around the state to learn from each other’s efforts and share ideas and challenges.

For example, Wright found it helpful to learn about Broome and Suffolk Counties’ brownfield remediation efforts. “We haven’t figured out an effective answer for brownfield reuse [in Syracuse],” she said. “So learning how to gain access and conduct the initial contamination assessment [prior to foreclosure and acquisition] was extremely helpful.”

The New York Land Bank Summit also created a space in which common goals could emerge.

In addition to the common need for an information-sharing forum, the land banks also face shared policy challenges. “I think that there are a lot of natural benefits for land banks to be in touch,” said Robinson. The land banks hope to work together to ensure that critical stakeholders in Albany and throughout the state understand land banking and its benefits to communities across the state.

As a result, at the Summit, land bank leaders joined together to create the New York Association of Land Banks (NYALB).

The NYALB follows in the footsteps of a similar association in Georgia, the Georgia Association of Land Bank Authorities, which enabled the state’s land banks to organize a successful push for state policy reform. “As we started on our work [in Georgia], it made sense that we needed a natural platform to come together and share ideas,” explains Chris Norman, Executive Director of the Fulton County/City of Atlanta Land Bank, in an interview with Community Progress.

 

 

Dearing hopes the new association will allow the land banks to “become a unified voice to the state legislature and governor to voice our experiences and shared interests.” Wright thinks a “land bank operating manual would be very helpful,” and, thinking beyond land banks to consider the broader revitalization toolbox, added that she “would hope in the long term to have a conversation about vacant properties more generally, and pursue legislation that will bring improvements in code enforcement, tax foreclosure, etc.”

The association is, at this stage, an informal one, but land bank leaders are excited about the possibilities for statewide collaboration.

Looking forward

Land banking in New York is still in its early stages, but there are signs that the future is bright. The Buffalo Erie Niagara Land Bank recently hired its first Executive Director. The Greater Syracuse Land Bank is planning at least 40 renovations over the next two years. There is even a proposal from the New York Attorney General’s office to double the number of land banks allowed statewide to 20.

Families like the Halimis are moving into homes that were previously vacant, and more are expected to follow. “There is already evidence in Syracuse, and other places with some maturity,” Robinson explained, “that the process is working in the way that it should have been.”