Housing and Neighborhood Development Services, Inc.

Here's an excerpt from Community Development Digest which published this piece in its 'Neighborhood Development' column: “City Ready to Move Under New Law,"  April 6, 2004, No. 04-07, p. 10.  

City Ready To Move Under New Law

   New Jersey:  Orange will be a testing ground for a statewide assault on blight under a law the governor signed a few months ago giving communities new powers for acquiring abandoned and dilapidated homes.

   The Abandoned Property Rehabilitation Act gives Orange and other cities greater opportunities to stabilize and revitalize neighborhoods, says Pat Morrissy, founder and executive director of Housing and Neighborhood Development Service.   Getting rid of rundown empty houses will be especially critical to cities attracting new development and jobs, he says.

   HANDS will use the state statute (PL 2003 C210) to go after pivotal eyesores—“the properties sucking the life out of neighborhoods,” Morrissy tells CDD.   Many of these nuisance homes have owners who don’t live in the city or state and have allowed their houses to deteriorate and become havens for vagrants, drug activity and crime.

   The city will be able to partner with HANDS to seize and fix up these properties to sell to owner occupants who will maintain them. Dozens of properties HANDS has restored previously have caused neighbors to spruce up their homes, too, he says.

   Ending blight creates a snowball effect in neighborhood revitalization, and the new law will accelerate it, predicts Morrissy. Property values will improve, along with neighborhood pride, he says.

Law cuts red tape

   The Abandoned Property Act, which was spearheaded by the Housing & Community Development Network of New Jersey, drastically reduces the time for foreclosing on properties obtained through tax-lien sales.

   Before, code enforcement was so cumbersome and procedures for grabbing vacant properties were so complex, “they were almost useless,” Morrissy says. Previous state law was heavily weighted in favor of property owners and required at least two and a half years to foreclose.

   Now, HANDS will be able to buy tax liens from the city and foreclose on homes immediately. No local ordinance is needed, says Morrissy. The group plans to purchase tax liens on 5-10 properties later this month.

   The abandoned homes will be completely rehabbed and sold to low- to moderate-income families. “We already have buyers and financing lined up,” Morrissy says.

    The major headache will be clearing title.  This will eat up a good portion of HANDS' staff time and expense.  But Morrissy expects staff to get better and fater after gaining experience.  The group received more than $2 million from the state's Urban Homeownership Recover Program last year, which will help cover administrative and title-work costs (CDD, 7/1/03p9).

City takes properties

   The state law permits a city to seize properties itself rather than relying on lien sales to HANDS and other community development corporations.

   The city can enact a law appointing a public officer to create a list of nuisance properties. It then files actions in superior court demanding owners rehab their homes.

   Owners must comply in a reasonable period of time or the city or CDC agent acquires and repairs the homes. The houses can then be sold. Properties on the problem list can be acquired even if the owners are current on their taxes.

   The city can seize properties through “spot blight” eminent domain, too. A locality is authorized to take one or two homes on a block without having to designate the entire neighborhood as a redevelopment zone.

   Cities can custom tailor tax-lien sales to favor certain buyers. For instance, the city might require a lien purchaser to be a nonprofit CDC able to rehab the properties within a set period of time. The city can even require the tax-lien buyer to resell the renovated properties to lower-income households, Morrissy says.

   The city might further stipulate that a lien purchaser have a homeownership counseling program, including instruction on home maintenance. This enables Orange officials to steer vacant properties to HANDS.

   Morrissy believes it may be a while before the courts are familiar enough with the state law to help implement it smoothly. The number of cases might overwhelm the courts initially as cities start seeking orders of possession.

   But Morrissy expects the courts to assign judges to specialize in such cases. Eventually the courts will gain knowledge of the law while HANDS and other CDCs learn how to assist the courts.

   It’s possible some owners might retain possession of their homes before the court lets the city or HANDS seize them. They could do this by reimbursing Orange or HANDS for rehab costs.

    But HANDS still comes out a winner, Morrissy says. Problem properties will be eliminated and owners will be on notice to prevent future deterioration. Neighborhood revitalization benefits either way, says Morrissy.

   Info: Morrissy, 973/678-3110

Copyright © 2007 Housing and Neighborhood Development Services, Inc.