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To address ‘zombie house’ blight, two strategies

The house on Chapel Avenue in Cheektowaga has a broken fence, and advertising circulars are piled high on the front porch. No one has lived there for about four years.

It is one of 270 “zombie foreclosures” sucking the life out of neighborhoods around the town after owners walked away from the mortgage, and the banks started but did not complete the foreclosure process.

Similar properties are found in Amherst, Buffalo, Lackawanna and many other local communities, where banks pay the property taxes, preventing municipalities from foreclosing and selling the property at auction.

“To do nothing hurts the entire community,” said Cheektowaga Councilman Charlie Markel, who has taken the lead in trying to get a handle on the town’s 500 vacant properties.

That’s why representatives from federal, state, county and local governments came together Friday to announce two initiatives to stop zombie foreclosures from bringing down communities and to put other vacant properties back on the tax rolls. They discussed solutions that include state legislation to hold banks accountable for maintaining houses in foreclosure and the hiring of an executive director for a local land bank aimed at dealing with other types of problem properties.

“Deteriorating houses are like cancer,” said Rep. Brian Higgins, D-Buffalo, who recalled that vacant houses were a major issue when he was on the Common Council in the late 1980s and early 1990s. Now the problem has spread to the suburbs as well.

Attorney General Eric T. Schneiderman is developing legislation that will create a statewide registry of zombie foreclosures – there are an estimated 15,000 of these properties statewide – so municipalities can track abandoned homes and enforce property codes. The bill also makes banks responsible for the upkeep of the houses. It would close a loophole, changing state law to make lenders responsible for delinquent properties soon after they are abandoned, not at the end of the foreclosure process, which can take years.

“It puts the burden on the bank to maintain the property,” Schneiderman said. “I think it will help us speed up the foreclosure process as well.”

But getting legislation that affects banks passed in Albany is not simple.

Assemblyman Michael P. Kearns, D-Buffalo, sponsored legislation in 2012 that would require banks to post their contact information on abandoned houses when the foreclosure process has started, so neighbors know whom they can call when the grass gets too high, but it only passed in the Assembly. The banking lobby was against the bill, and it did not pass in the Senate, Kearns said.

He’s hoping that as more lawmakers are aware of the problem with zombie foreclosures in their own communities, they will support his bill before the Legislature’s session ends.

“The banks have a moral responsibility to the community to be a good neighbor,” he said.

Locally, the land bank that was established in 2012 has funding and is getting off the ground.

Jocelyn Gordon, who holds masters’ degrees in urban planning and business administration and has worked in community development and public engagement, is the newly appointed executive director of the Buffalo Erie Niagara Land Improvement Corp., a public authority.

In October, the land bank was awarded $2.1 million by Schneiderman’s office to demolish eyesores or rehabilitate houses that still have value but are unattractive to private investors because they have too many back taxes or otherwise would not be feasible investments.

Half of the funding will go to demolitions in Buffalo, and $100,000 will go toward demolitions in Lackawanna, for a total of 55 demolitions. The remaining funding will go toward rehabilitating eight to 10 properties around Erie County so they can be returned to private ownership and productive use, and the rehabilitation of 10 vacant lots, which can be sold to neighboring property owners.

The City of Buffalo will choose which properties will be demolished within its borders, and will select the crews to do the work, Gordon said.

The goal is to demolish 50 houses in Buffalo, half of them by June. These are all owned by the city and are on the city’s demolition list. The demolitions still must be reviewed by the city Preservation Board.

The city has identified 15,000 “problem properties” that need to be addressed, and there are between 7,000 and 8,000 problem properties in the rest of the county.

While the city has more problem properties than in the rest of the county, the problem properties outside the city are actually worth more than those in the city, making them likely candidates for rehabilitation, said County Executive Mark C. Poloncarz.

“What we have to do throughout the county is not necessarily the same,” he said.