State Attorney General Eric T. Schneiderman on Friday announced a pilot program to give millions of dollars to help rehabilitate vacant and abandoned properties so they can be used for affordable housing.
Under the initiative, called Neighbors for Neighborhoods, 16 land banks in the state will vie for some of the $4 million in available subsidies.
Nassau County created its land bank in July 2015 but it was unclear Friday how many properties it has obtained.
Suffolk County formed its land bank in 2013 and, according to a spokeswoman, has six properties, three of which have been rehabilitated and are for sale. Another two homes are currently undergoing work and one home was transferred to Habitat for Humanity which demolished the home and is building another on site. All six are affordable housing, but none are rentals.
Under Schneiderman’s program, the land banks can apply to be a part of the program and, if approved, they must give properties to a nonprofit or an individual at little or no cost. The land bank can then submit requests for subsidies on a project-by-project basis.
Those subsidies can be used by the nonprofits or individuals to repair the homes and turn them into “low and moderate income level” rental units.
Funding for the program comes from Schneiderman’s settlements with Citigroup and Bank of America over the bank practices that led to the 2008 housing crash. That settlement netted the state $982 million.
In a statement, Schneiderman said the program will help communities “reclaim their neighborhoods from blight” while creating needed affordable housing.
Under federal guidelines, affordable housing rentals are available to families earning less than 80 percent of the Area Median Income, which for Long Island in 2016 is $106,200. According to the Garden City-based Long Island Index, only 20 percent of the housing stock on Long Island is rentals, the lowest among New York City’s surrounding suburbs.
It’s unclear how this program might impact properties on Long Island known as “zombie” homes, houses that have gone into foreclosure and been abandoned by their owners, often falling into disrepair. A report last year by Newsday and News 12 Long Island found that Long Island led the state and ranked among the top 10 regions in the nation in the number of zombie houses.
Land banks usually acquire properties through tax foreclosures, according to a spokesman for Scheniderman. Banks and mortgage companies typically stay current on taxes while zombie homes are in the foreclosure process.
However, land banks can also acquire zombie properties after foreclosure is complete, the spokesman said. New York has one of the lengthiest foreclosure periods in the country, sometimes taking three years or longer.