‘Zombie property’ bill would help
State lawmakers should give serious consideration this fall to legislation proposed earlier this year by state Attorney General Eric Schneiderman to help municipalities deal with abandoned properties.
“Zombie properties,” as they are called, are a byproduct of lengthy foreclosure timelines. Sometimes when homeowners fall too far behind on their mortgages, they simply abandon the homes and let banks foreclose on the mortgages. The home is then in limbo: The property owner abandons it, and the bank often fails to perform basic maintenance like mowing the lawn. The results often are the eyesores we all drive or walk past all the time.
According to RealtyTrac, a company that tracks various housing trends, the incidences of these zombie properties have decreased nationally since the foreclosure crisis of 2007 but still account for one in five foreclosures. New York state, as is often the case, is on the wrong side of the trend. RealtyTrac reports zombie foreclosures increasing 38 percent in New York state, with 12,666 in the second quarter of 2014.
Mr. Schneiderman’s bill would require lenders to perform basic maintenance throughout the foreclosure process. It would also create a statewide registry of abandoned properties and share that information with local officials – sometimes now municipal officials can’t even find out who owns them – create a toll-free hotline to report suspected vacant properties and require homeowners be notified they are legally entitled to stay in their homes until ordered by a court to leave. Even if a house is underwater, it’s better for everyone to have someone living there to maintain it.
These things seem fair to property owners as well as good for the community as a whole. We have criticized Mr. Schneiderman about his silence on the Commission to Investigate Public Corruption, but this bill of his is good. The state Legislature should pass it.
Zombie properties can cost good property owners in ways other than being sore on the eyes. It can be harder to discern the ownership status of a zombie property, making it difficult for municipal officials to have houses brought into code compliance or to find the legal owner if a home needs to be demolished. Taxpayers sometimes end up paying the cost of a demolition because a property owner simply can’t be found.
Government can’t solve all the problems with zombie properties, however. The process of reviving them involves action by the private sector, too, specifically banks.
Even when banks do hire landscapers, that doesn’t mean everything is fine. Lake Placid and the town of North Elba don’t have many abandoned properties, but longtime code enforcement officer Jim Morganson said he’s observed that when a bank hires a property manager for an abandoned house, that can lead to a lack of motivation to sell the property.
“There seems to be a disconnect in promptly getting these properties back for sale, getting people in them, people using them, getting them back on the tax rolls,” Morganson told us Thursday.
Some of these properties have legal knots to untie, but someone needs to do the work of untying them – both for the sake of the community and for their own sakes, to them before they deteriorate and diminish in value. No one wins otherwise.
We urge banks to pay attention to these properties and get moving on restoring them to productivity.
“Vacant buildings are the worst kind of buildings to have in your community,” Mr. Morganson said. “There’s no positive part of a vacant building.”