Nearly two years after Gov. Andrew M. Cuomo signed legislation allowing local governments to create nonprofit land banks that purchase and collect vacant properties either for sale or redevelopment, the state is now making money available to help fund the efforts.
Attorney General Eric T. Schneiderman this week announced that – thanks to a recent $25 billion settlement with some of the nation’s top banks in the aftermath of the foreclosure crisis – up to $20 million will be made available to fund state-approved land banks across New York, including one in Erie County.
The $20 million will be disbursed over two years, and the eight approved land banks that are eligible for the funding will have to compete for the money.
“We intend to submit a very competitive application,” said Maria Whyte, Erie County commissioner of environment and planning and chairwoman of the Buffalo Erie Niagara Land Improvement Corp.
Buffalo and Erie County was one of five areas in the state approved for a land bank in the initial round of applications after Cuomo signed the legislation in July 2011. Statewide, a total of 10 land banks have been authorized, including land banks in Chautauqua County; the City of Rochester; and the City of Syracuse and Onondaga County.
As a nonprofit land-banking entity, the Buffalo Erie Niagara Land Improvement Corp. is charged with curbing the problems of vacant and abandoned properties across Erie County. Despite the name, it does not include Niagara County. Like Erie County’s three cities – Buffalo, Lackawanna and Tonawanda – the land bank can bid for properties at tax foreclosure auctions.
However, land banks are required only to bid the amount equal to what’s owed in back taxes and fees on a property, after which they automatically win the auction and become the property owner. Municipalities competing in the same arena would have to outbid a speculator to gain possession of a property.
According to county sources, there are 8,765 properties countywide eligible for foreclosure this year. Of those, 5,752 properties are located in the cities, which are not included in the county’s foreclosure sale because each of the cities is empowered to hold its own auction.
The Buffalo Erie Niagara Land Improvement Corp. received an appropriation of $100,000 from the county in the 2013 budget. Whyte said the funding being made available by the state could increase that tenfold.
“It was very exciting when the statute was passed in 2011 and signed by the governor, but there was no funding provided. As we know, vacant and abandoned properties are an extremely expensive problem,” Whyte said.
In explaining the rationale for having the state help fund the land banks, Schneiderman said that land banks, by restoring vacant or abandoned properties, lower costs for local governments. In addition, he said, by getting properties back on the tax rolls, they benefit public schools, help reduce crime and give a boost to the local economy.
“By dedicating money from that settlement to land banks across New York, we’ll empower local communities to rebuild their own neighborhoods, house by house, block by block. The road to recovery is long, but it will take innovative approaches like this – driven and managed by those who know the community best – to boost local economies and finally put this crisis behind us,” Schneiderman said in a prepared statement.