New York State calls them “zombies,” properties that have been abandoned by their former residents in light of foreclosure but are not yet owned by the bank. Controlled by no one, these homes quickly fall into disrepair and contribute to local crime, decay, vandalism and arson, causing a number of problems for the community as a result. For example, areas with significant numbers of zombie properties have lower taxes bases, decrease local property values and create a sizable burden for code enforcement and emergency service providers. Now, Attorney General Eric Schneiderman is trying to win legislative approval to help deal with these abandoned homes. But will the state legislature support his plan?
Zombie properties began appearing throughout New York State when the real estate market collapsed, and continued to be a problem as the economy struggled, with a slow foreclosure system failing to ensure that ownership passed on when homeowners were unable to pay their mortgages. Schneiderman has been trying to solve the zombie problems since last year, but previous efforts fell short. Now, he plans to introduce a new bill to address the issue.
“The bill would require banks to provide homeowners with early notice that they are legally entitled to remain in their homes until ordered to leave by a court,” Schneiderman said at a press conference in Syracuse, further explaining that many owners, once they’ve fallen behind on their payments, think they need to vacate the house.
The bill would also speed up foreclosure procedures and hold banks accountable for the abandoned buildings they have mortgaged. As a result, many local leaders, including Syracuse Mayor Stephanie Miner, have spoken out in favor of the plan.
However, the real goal is promoting occupancy in former zombie properties, a development that would not only make neighborhoods safer but could also economic growth in the area. As Federal Housing Administration loans, famous for their small down payments, continue to decrease in many areas, many state residents might find that they can afford to buy a home for the first time, while others might see an opportunity to invest in rental property. If some of these investors then hired rental property management services to help maintain their properties, this change could even spur job growth.
In the end, action on the zombie homes might be exactly what New York State needs to promote its struggling real estate market: Time recently ranked Albany and Syracuse as number one and number three on a list of the top 10 slowest housing markets in the United States.
Schneiderman has commented that the bill could take some time to make headway in Albany, but also stated that he is optimistic about its chances of success. He also said that the bill could benefit communities across New York State.