ALBANY — A new state pilot program will provide $4 million in subsidies for everyday New Yorkers to take over individual, abandoned properties in their neighborhood – at little or no cost – and rehabilitate them into affordable rental housing, Attorney General Eric T. Schneiderman announced today.
Created with affordable housing and community development nonprofit Enterprise Community Partners (Enterprise), the program requires the new housing units to remain affordable for at least 20 years. Funding for the program will come from the Attorney General’s 2014 and 2015 settlements with Citigroup and Bank of America over the banks’ conduct leading up to the 2008 housing crash.
Neighbors for Neighborhoods builds on the success of New York State’s non-profit land banks. Ten of these lands banks have, with support from the Office of the Attorney General, reclaimed over 1,600 abandoned properties across the state since 2013. Recently, five new land banks have formed and received capacity-building grants from the Office of the Attorney General, and a sixth is in the process of getting certified.
The grant program will be administered by Enterprise, which for more than 30 years has created affordable housing opportunities for low- and moderate-income communities across the country, in addition to identifying programmatic solutions and advocating for policies that connect low-income communities to opportunity.
Once selected, land banks will transfer ownership of the dilapidated properties at low or no cost to the identified community members; provide the new community-based property owners with a subsidy toward the costs of renovation (approximately $50,000 per unit); and dictate the terms and scope of the renovation. Importantly, the renovations must also include exterior rehabs—to provide “curb appeal,” a critical part of boosting property values in neighborhoods plagued by vacant homes.
In exchange for the property and the renovation subsidy, the new property owners will convert the properties to affordable low- and moderate-income rental units for local families. This $4 million investment is estimated to yield up to 80 affordable rental homes for working families in the cities and towns where land banks are active.
Funding for the initiative will be drawn from the $7 billion settlement agreement with Citigroup and the $16 billion settlement agreement with Bank of America that Attorney General Schneiderman, as co-chair of the federal-state working group on residential-mortgage-based securities, negotiated in July and August 2014, respectively. Those two settlements together brought $982 million in cash and consumer relief to New York State alone.
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