New York State Attorney General Letitia James announces an additional...

New York State Attorney General Letitia James announces an additional $9 million in grant funding for municipalities facing problems with empty, foreclosed homes. Credit: Howard Schnapp

New York State is making another $9 million in grant funding available for communities to continue to address long vacant and abandoned properties in the foreclosure process, otherwise known as zombie homes.

The homes are a problem largely born out of the 2008 financial crisis and persists on Long Island, although many municipalities have ramped up enforcement and prevention measures following a previous round of grant funding and a 2016 change to state law.

Still, Suffolk and Nassau County had the highest and second-highest number of vacant pre-foreclosure homes in the country in 2018 at 610 and 377 homes respectively, according to Irvine, California-based ATTOM Data Solutions.

The funding announced Saturday, dubbed “Zombie 2.0,” follows the Zombie Remediation and Prevention Initiative, which made $13 million available to New York municipalities in 2016.

“These abandoned houses significantly decrease property values and threaten the safety of surrounding neighborhoods,” Attorney General Letitia James said in a statement. “Zombies 2.0 will be a key resource for cities and towns across the state to combat this nuisance, and make communities whole.” 

The funding is a result of a $500 million settlement in 2018 between the state attorney general’s office and the Royal Bank of Scotland over what the attorney general’s office said was deceptive practices involving residential mortgage-backed securities before the 2008 financial crisis. 

Local Initiatives Support Corporation will once again administer the grants and is accepting applications by invitation only through March 8. Eligible municipalities must have at least 5,000 residents and at least 100 vacant or abandoned homes. Awards are expected to be announced April 12 and projected to range from $50,000 to $500,000 depending on the size and severity of the issue.

Towns, villages and cities have used $3.1 million in grants announced by the attorney general’s office in 2016 to improve data collection, hire additional code enforcement staff and reach out to homeowners at risk of entering foreclosures among other initiatives.

Riverhead Town used a $100,000 grant to fund an additional town attorney to coordinate with code enforcement, to hire a Spanish-speaking code enforcement officer to connect residents with foreclosure prevention resources and to purchase additional software to track the problem.

“The grant funding has permitted the town to permanently enhance its staffing and existing resources to provide education in a meaningful and ongoing way,” Riverhead Town community development director Dawn Thomas wrote in a report to LISC.

Municipalities have also reported better compliance from property owners following the passage of the New York State Abandoned Property Neighborhood Relief Act in 2016. The law requires banks and other mortgage holders to maintain vacant homes during the foreclosure process or face fines up to $500 per day.

“It has gotten better,” Southampton assistant town attorney Richard Harris said of the zombie house problem. “They [banks and mortgage holders] have gotten more responsive when we lean on them because they know what we can do.”

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