Thursday, June 29, 2023

Taking Stock of Housing: The promise of land banks

inside a tiny house

Affordable housing is a tough enough nut to crack as is, but events hundreds of miles removed from the Adirondacks can precipitate unexpected headwinds.

In 2015, Hennepin County in Minnesota seized a condominium for $15,000 worth of back taxes and associated costs. The county then sold the property at a tax sale for $40,000.

The previous owner sued, arguing that the county’s $25,000 profit constituted an illegal taking, and that the money rightfully belonged to her.

The case bounced along through the judicial system until on May 25, when in Tyler v. Hennepin County, the Supreme Court agreed that the profits indeed belonged to the former owner.

It was, said Nicole Justice Green, a heart-stopping moment for the Essex County Land Bank, which is counting on tax foreclosures to power a promising avenue of affordable housing.

Green is executive director of PRIDE of Ticonderoga, which is administering the Essex County Land Bank. She said the high court left the details to the states, and the New York Assembly almost slapped a moratorium on foreclosure sales until the issue could be sorted out — just as the land bank has its sights set on seven affordable homes it hopes to create over the next 24 months. (Unlike the Hennepin County situation, land banks do not flip properties for profit.)

But the clock expired before the measure passed, leaving land banks free to “proceed cautiously” for now, Green said. Between now and the next legislative session, Green said she hopes a land-bank exemption can be incorporated into any new law.

Speaking of foreclosures, the annual Essex County tax auction — traditionally a celebration of bottom feeders, low-end landlords and people hoping to get something for nothing, or at least very little — is set for June 21. (View the list of foreclosures here)

The sale also shines a spotlight on the many zombie homes across the Adirondacks and raises questions of how they came to be that way and how they might have been saved.

Whatever the path, the foreclosure sale is often a home’s last gasp before it becomes too far gone and rots in place, a sorry end to what could have been a viable home.

Given soaring home prices (see this week’s installment of Taking Stock) taking a flier on a foreclosure home might seem tempting, but often buyers underestimate the costs of rehabbing and wind up walking away — and the house winds up right back in foreclosure.

Among the dozens of foreclosed properties in Essex is a sorry looking four-bedroom, three bath house in Lewis that was headed to auction until it was pulled out on behalf of the land bank.

It’s near county offices and the Elizabethtown hospital, and Green said she can see it one day being sold to a government or health-care worker.

This first appeared in a short-term newsletter “Taking Stock of Housing,” a special series from Adirondack Explorer. Click here to sign up.

Photo at top: Real estate agent Amy Shalton of Jay created housing out of an Amish-style shed that her family converted into a home for vacationers and visiting family. A year after it was built, it was appraised for $175,000. Photo by Mike Lynch

Related Stories

Tim Rowland is a humor columnist for Herald-Mail Media in Hagerstown, Md., and a New York Times bestselling author. His books include High Peaks; A History of Hiking the Adirondacks from Noah to Neoprene and Strange and Unusual Stories of New York City. He has climbed the 46 high peaks, is an avid bicyclist, and trout tremble with fear when they see his approaching shadow. He and his wife Beth are residents of Jay, N.Y.

3 Responses

  1. Harry Gordon, Chairman, Franklin County Land Bank says:

    The article is incorrect regarding the NY foreclosure moratorium. The legislation was passed by substantial majorities in both the Senate and Assembly. If Governor Hochul signs the legislation, the foreclosure moratorium will become law. It will adversely affect the 28 land banks throughout the state.

  2. Rob B. says:

    One we have to remember here in NY is that it is not only purchase price, but “TCO”, or true cost of ownership. Property taxes in upstate NY are the highest as a percentage of value in the United States. That is driven by the school tax, which in many locations statewide is 60-65% of your total tax bill. All NY States tax rebate gimmicks and endless and increasing property tax exemptions do nothing to adjust tax rates, and the rates go up for all due to the removal of this revenue from the tax rolls, Especially those that do not qualify for the big ticket give-a-aways. How much have we overpaid over the years so the state can magically give some back in drips and drabs, especially during election years? Then you have our gat tax, our mobile phone tax, (some of the highest in the nation) .cable fees, property insurances (that have all increased double digits in the last year) repair and maintenance costs that have sky-rocketed, All these factors are on the periphery of home affordability. Banks, in some cases have increased their debt/income ratios to over 50%to keep pushing business as rates have risen. Honestly, no one should buy any big ticket item based on “gross income” because you never see that number in your bank account. The big banks know that if there is another mortgage crisis, the feds will bail them out with your tax dollars, so quite frankly, they don’t care. Write-downs and government reimbursements are good for the bottom line. I am so grateful I don’t have to try and buy a property, and have tremendous sympathy for those that are trying, but there are a lot of governments and businesses making huge profits on this process at great expense to many, and a good portion of it boils down to extraordinarily poor regressive New York State taxation policy on many fronts.

    Riddle of the day: What happens when you pay off your mortgage but don’t pay your property tax?

    Answer: The county repossesses your property.

    Second riddle: Do you ever truly own anything that can be taken away from you for lack of payment? Think about it!

    Answer: No. You own the right to buy, sell and improve (or not), but your property could be seen as being “leased” from the government.

  3. Charlie Stehlin says:

    “Property taxes in upstate NY are the highest as a percentage of value in the United States. That is driven by the school tax…”

    > Prices, taxes, are up everywhere, and while there may be some places where taxes are lower you can be rest assured people living in those places are getting far less bang for their buck… less healthcare, less public services, less you name it! The rich can afford to pay for every ‘thing’ they need, why should they care about the things everyone else don’t get due to lower taxes?

    So what is the answer to this and all of our financial woes? I am no expert on these matters, and I don’t have the gripes others have as I don’t own property, but my vision is clear and I can see the forest for the trees. And also I know that as time goes along nothing is going to be less expensive, more people are going to come to know poverty, and the rich are going to keep getting richer. Why should that pattern stop any day soon when it’s been going on since before Erasmus? Nuclear missiles being launched! There’s an answer to that query….a rude awakening! Eventually that comes to all of us rich or poor alike!

    There sure is a lot of griping going around, and by the phraseology one can clearly see that values are at play in all of it. What grabbed me the most out of what Rob B says above was ‘school tax,’ as if this is an agent of evil. Or did I read you wrong? I do know that I’ve been hearing for a very long stretch now from homeowners, from taxpayers I know, and seeing in ‘Letters’ to editors in the daily rags, this very thing….an aversion to having to pay taxes for public education, “when my kids aren’t even in school anymore.” “Yeah but what about your education?” I say to that! “Your parents had to pay for the same!” Nothing is different except for the price, it cost more nowadays just like everything else does! So what do we do! One school says, ‘tax the rich feed the poor,’ another school says ‘keep feeding the rich screw the poor.’ Plain as day to see! In the end we all lose with such an attitude, a sheet attitude by the way! Maybe attitudes could use some adjusting, no?

    I pluck two very appropriate quotes from my literary collection on this matter. They are to the point and precise in their significance, and most certainly apply more to these times than it did when they were expressed!

    “The happiness and prosperity of a people depend essentially upon their education. In many of the eastern countries, the people are degraded and miserable. This is owing to their ignorance… In some of these countries the people are governed by a despot, who rules over them with great rigor. They know not that there could be any improvement in their condition; It is only where the people are well educated, that a free government can be maintained. Hence, if we would be a well governed and happy people, the advantages of education must be enjoyed by the mass of citizens.. But there are, in every community, those who have not the means of paying for the instruction of their children: it is therefore the duty of the government to provide the means for promoting the general diffusion of useful knowledge.”

    From: The Principles of Civil Government…Including a Comprehensive view of the government of the State of Vermont Andrew W. Young 1848

    “The order and quiet of society and life of the citizen is more safe in an educated population than an uneducated.”

    From: Reminiscences; Personal and other incidents; Early settlement of Otsego County; Notices and anecdotes of public men; Judicial, legal and legislative matters; Field sport; Dissertations and discussions Levi Beardsley, Esq. Late of the New York Senate 1852

Leave a Reply

Leave a Reply

Your email address will not be published. Required fields are marked *

Wait! Before you go:

Catch up on all your Adirondack
news, delivered weekly to your inbox