How New York State’s “Zombie” Law and a LISC Initiative Have Been Bringing Vacant Homes Back to Life
In a Q+A with Brick Underground, LISC’s Helene Caloir, lead author of a new LISC-Urban Institute report on remediating vacant homes and preventing foreclosure, explains the nature of “zombies houses” in our midst, and what to do about them. There’s important news in the story: says Caloir, “In the current crisis, [we have] more tools for keeping people in their homes.”
The excerpt below was originally published by Brick Underground
Zombie houses: Inside NY's effort to release derelict properties from legal limbo
By Jennifer White Karp, Managing Editor of Brick Underground
In New York City's feverish real estate market, you may be surprised to learn that “zombies”—vacant, derelict properties stuck in legal limbo—are a significant problem.
A new report by the Local Initiative Support Corporation and the Urban Institute assesses the effectiveness of New York State’s 2016 “Zombie Law” (also known as the Abandoned Property Neighborhood Relief Act). With an uptick in owners behind on their mortgages as result of the pandemic, New York’s experience with zombies underscores the numerous benefits of keeping people in their homes.
Zombies, which are defined as one-to-four family houses with a mortgage in delinquency or in the foreclosure process, are more challenging to deal with than other types of vacant properties—and are more common as a result of the wave of foreclosures initiated in the years after the Great Recession.
Under the Zombie Law, banks that hold delinquent mortgages or mortgages in foreclosure are required to maintain the properties and comply with exterior housing code and property maintenance requirements. If they don’t keep up the property, they can be hit with a penalty of $500 per day per house.
The report explains that zombies are created as a result of a bank initiating a foreclosure, but not seeing it through to completion. Typically families vacate the properties for one of two reasons after getting a notice of foreclosure—either because they expect to lose the house or mistakenly think it has already been foreclosed upon. When the vacant property deteriorates—because the bank doesn’t yet have the title (giving it the ability to sell it off to someone who will fix it up)—you get a house that's stuck in a half-dead limbo like a zombie.
Brick spoke to Helene Caloir, senior director of the Housing Stabilization Fund at LISC and lead author of the report, to find out more about how NYC is dealing with its zombie problem.