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Home Rehabs Get A Boost-D&C Article-March 24, 2014

Home rehabs get a boost
Brian Sharp, Staff Writer

When Miriam Zinter first walked into the boarded-up white house on Lorimer Street, the upstairs toilet was in the foyer because the ceiling had rotted through.

The 90-year-old vacant house in the heart of the Susan B. Anthony neighborhood stands adjacent to one of the two churches fronting Jones Square. Valued at just $18,000 — on a block where other houses are assessed at three times that amount — the two-story home with its front porch and peaked roof was clearly a fixer-upper.

Today, 54 Lorimer St. is in the midst of a $100,000 renovation, one of several projects overseen by Zinter and the much-heralded but challenged HOME Rochester housing rehab program.

HOME Rochester relies on public and private funding to renovate vacant houses for sale to low- and moderate-income buyers, who must commit to live in the home for at least 15 years. The program’s focus on homeownership and its ability to require a homebuyer commitment are key to the city’s goal of stabilizing distressed neighborhoods. But rising costs, particularly for asbestos abatement, have reduced the program’s impact from 54 houses renovated in 2010 to 25 last year.

Since January, the program has closed on two homes sales, compared to seven at this point last year.

“It’s been slowing down, which is a shame,” Zinter said.

That is about to change.

With the assistance of the city’s new Land Bank Corp. and a nearly $3 million state grant, HOME Rochester will acquire at least 50 vacant properties through the city’s tax foreclosure auction next month. Currently, more than 90 properties out of a total of 600 are tagged as potential land bank parcels.

“We are trying to be as transparent as possible,” said Delmonize Smith, the city’s neighborhood and business development commissioner. “If somebody comes to the auction, they are able to see up front which properties the city has an interest in.”

Rochester’s land bank, a city controlled entity created last year to help get vacant and abandoned property back on the tax rolls, can put in a “trump bid” at the auction and buy each property at the minimum price regardless of a higher bid. “Normally we have to sit there and raise our paddle and compete with all the other developers who have deeper pockets,” said Zinter, project manager for the Greater Rochester Housing Partnership.

The nonprofit administers and partially funds HOME Rochester, along with the city, state and local banks.

To demolish an abandoned property would cost the city roughly $28,000 and leave behind a vacant city-owned lot. HOME Rochester found it could rehab those homes, and get them back on the tax rolls for an affordable sale price requiring a combined subsidy of about $30,000 from the state and city. But that required subsidy has doubled of late — threatening the viability of the program, Zinter said.

Next month’s tax foreclosure auction will mark the first full-scale use of the land bank. The land bank will sell properties it acquires to HOME Rochester at cost, at which point the program begins paying the property taxes. By lowering the purchase price, money from the eventual re-sale will cover more of the renovation expense.

The land bank is Rochester’s newest effort to deal with vacant and blighted property. The city also has a sizable demolition program and for several years now has sold delinquent tax liens to a collection agency.

Rochester is being more aggressive with its land bank than the Buffalo Erie Niagara Land Improvement Corp., which covers a broader and more varied territory and is testing a number of different approaches while acquiring very few properties. Syracuse, meanwhile, has gone all-in, acquiring 201 properties with plans on taking 500 more this year.

In Erie County, the only parcels acquired in the city of Buffalo are demolition targets, part of a state-funded “quick strike” that could total 55 properties in all, said Jocelyn Gordon, executive director for the BEN Land Improvement Corp. Long term, Gordon said, the goal is to work with a housing agency like Rochester is doing.

Erie County and Syracuse recently stopped selling delinquent tax liens. The Greater Syracuse Land Bank has thus become the default recipient of all tax foreclosed property there. In Syracuse, the land bank is part of a plan to get more aggressive on tax collections and, by doing so, fund the program and get a backlog of 3,900 foreclosure-eligible properties back on the tax roles. “We had to move quickly, so the new policy on tax collection could be applied fairly and equitably,” said Katelyn Wright, executive director for the land bank.

The Greater Syracuse Land Bank bank has subcontracted with private firms to secure, maintain and inspect the properties. All have benefited from state grants at the outset.

In Rochester, more of the targeted land bank properties are on the city’s southwest side than in any other part of the city. The concentration is unintended, officials say, a result of the selection criteria that focused on vacant three-bedroom houses in relatively good shape with off-street parking.

The next highest concentration of targeted properties is in the northeast. That is where Joe Macko of Spencerport has done most of his investing and thus where most of his nearly 100 rental properties can be found.

Macko, his son and his nephew will be among those bidding at the tax foreclosure auction on April 11.

When he first went on the city website and saw the set-aside of more than 90 properties as potential land bank parcels he was perplexed. The city has pulled off “some of the plums” in the past year to save for owner-occupants, he said. What concerns him is not knowing for certain what is available and what isn’t, so he knows what to go after given how much money he has to bid. “A lot of the stuff on the preferred list is what I was very interested in looking at,” said Macko, who tries to buy on streets or in neighborhoods where he has other rentals. “As an investor who doesn’t have a trump card, I guess we will just go (to the auction) and see how it plays out.”

There remain 15 pages of properties that might be available. Property owners can pay off their taxes and get their property off the list up until the day of the auction. In the end, Macko and other investors say, the end goal is the same.

Anyone willing to invest in the city and obtain tax delinquent, abandoned properties, “I’ll hold the ladder for them,” Macko said.

http://www.democratandchronicle.com/story/news/2014/03/23/home-rehabs-get-boost/6802421/

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