New York faces a crippling housing shortage, but there are thousands of vacant homes across the state that could help ease its affordability crisis.
One group has a solution to turn these so-called “zombie” homes into affordable housing by forcing banks to complete the foreclosure process and return the home to livable condition.
Zombie houses are all they look like run down, dangerous and abandoned properties. But they are also a relic of the subprime lending gold rush of the mid-2000s, a time when many communities of color was victim to predatory lending practices that have often resulted in foreclosures.
The Local Initiatives Support Corporation, a national non-profit organization, funded and provided advice to the Department of Housing Preservation and Development, which is responsible for developing and maintaining the City of New York’s affordable housing stock. York to make sure banks follow the state’s “zombie law” to restore vacant homes into affordable units.
There is a valued 1.3 million zombie homes across the United States, and New York State has the highest share. From 2022, thousands of these vacant homes are scattered throughout the state, especially in communities of color. Not only do they reduce property values and promote local crime, but the wasted housing stock also contributes to the worsening housing shortage in the state.
But there is a solution in the works, said Jenny Weyel, director of neighborhood stabilization at HPD New York. “We’ve successfully sued banks for letting vacant homes deteriorate, and now we’re finding ways to renovate them and resell them to low-income families,” she said.
New York is overrun by zombies
HPD estimates that over 2,000 zombie homes are vacant in New York City alone.
In 2013, a wave of seizures hit New York, resulting in a surplus of vacant homes and hung homes in the foreclosure process. When the state became the second-largest foreclosure inventory in the nation, the state attorney general’s office introduced the Abandoned Neighborhood Assistance Act, known as the Zombie Law.
With financial assistance from the Local Initiatives Support Corporation, HPD used the law to force banks to keep their promises to maintain vacant New York housing. The law, the first of its kind, could serve as a model for other states hoping to tackle backlogs of vacant and struggling homes with banking liens.
It requires financial institutions to maintain the exterior of vacant homes that hold delinquent mortgages by repairing windows, cutting grass and repairing roofs until a foreclosure process is completed. If banks do not follow the law, they are fined $500 a day for each house.
And so far it’s work in more than 11,000 homes.
Through the “Vacant Homes Initiative”, LISC and HPD have ensured that banks comply with the law by tracking and surveying properties, certifying that vacant homes are properly maintained and do not pose a threat to communities. that they infest. Their efforts have also led to new avenues to restore these properties into affordable housing.
“Each vacant home restored means a safe and affordable home for a family, increased taxes, and an infusion of vitality and care for the neighborhood and neighborhood,” said Helene Caloir, senior director of New York State Housing Stabilization. Fund, Insider said. “It has a positive multiplier effect on community life that you can see just by walking around.”
A home in Brooklyn’s Brownsville neighborhood is one of the city’s greatest success stories.
As of 2017, Wells Fargo owned the vacant home but failed to maintain the property. HPD filed a complaint.
When it did not receive a sufficient response from Wells Fargo, the city demolished the property, leaving the bank liable for demolition costs. Seeking to cancel this debt, Wells Fargo transferred ownership of the property to New York City.
By 2024, the property will be included in a Habitat for Humanity home ownership project that plans to turn it into affordable multi-family housing.
“With the housing crisis in New York, we can’t leave houses vacant for a year,” Weyel said. “Zombie homes are a potentially untapped source of affordable housing. Families could live in these homes and they could provide a homeownership opportunity for someone who may not be able to afford it.”