Vacant Property Working Group Property Acquisition, Land Reclamation Tools and the City of Pittsburgh Property Reserve January 30 1:00 PM Staff Contact: Sarah Slater, Program Coordinator 412.391.6732 or sslater@pcrg.org

Overview What is the Vacant Property Working Group? Context: Definitions Context: Land Use in Pittsburgh Using the Pittsburgh Property Reserve

What is the Vacant Property Working Group?

VPWG The Vacant Property Working Group, a program of the Pittsburgh Community Reinvestment Group (PCRG), is a collaboration of non-profit, community-based organizations, financial institutions and other stakeholders who have an interest in eliminating blight and revitalizing communities. Mission: To enable the revitalization of all land in the Greater Pittsburgh Area. Objective: to identify economic development policies, programs and resources that are necessary for neighborhood based redevelopment. VPWG works collectively towards the eradication of vacant and nuisance properties within the neighborhoods of the City of Pittsburgh and Allegheny County.

VPWG The VPWG is an open table to anyone in the City or County, and is made up of up of CDCs and CBOs, representatives of elected offices and government agencies, and partner nonprofits. PCRG founded: 1988 First VPWG meeting: 1996 In 2016, VPWG met ten times and had over fifty different attendees. 240+ properties are currently in the process of having title cleared for sale to community groups.

Current & Past Focus Areas: Land Acquisition Coordination and Improvement of the Treasurer’s Sale Process and the Land Reserve Community Land Trusts Conservatorship REO Portfolios Comprehensive Land Recycling & Management Creating a City of Pittsburgh/Regional Land Bank System Unified Property Management System State Policy Tax Foreclosure Blight Reduction Local Policy & Programs Access to Data and Parcel Information Lien Portfolios Affordable Housing Greening Planning Registered Community Organizations Code Enforcement Condemnations: Preservation v. Demolition Housing Court Quality of Life Ticketing

Land Acquisition Methods Second Class City Treasurer’s Sale City of Pittsburgh Property Reserve [PPR] Side Yard Sales Program Real Estate Owned (REO) properties PCRG Partnerships with local & national lenders National Community Stabilization Trust Program Conservatorship Sheriff’s Sale Direct Purchase (from private entity, City, URA, eg) Purchase of Bank Note Pittsburgh is the only second class city in Pennsylvania state law. For more on conservatorship, see the PA Blight Library: http://www.pablightlibrary.com/new-page/ For more on the Sheriff’s Sale, see: http://www.sheriffalleghenycounty.com/real_estate.html Purchase of a bank note enables a private individual to act as the mortgage servicer.

Context: Definitions

Definitions What is blight? Pennsylvania Statutes Title 35 P.S. Health and Safety § 1712.1. Blighted Property Removal The act authorizing the creation of municipal redevelopment authorities (like the Urban Redevelopment Authority of Pittsburgh) defines blight for Pennsylvania. There are many indicators of blight: US Postal Service and gas service shutoffs, and unpaid taxes are some of the most commonly used. Source: http://codes.findlaw.com/pa/title-35-ps-health-and-safety/pa-st-sect-35-1712-1.html; pablightlibrary.com Accessed 1/23/17.

Definitions Parcel vs. Lot: Parcel: a quantity of land for taxable purposes; boundaries do not necessarily coincide with lot boundaries Used by the Department of Finance, City of Pittsburgh, based on the assessment made by the Allegheny County Real Estate Department.1 Lot: a recognized subdivision of a parcel that address restrictions on use Used by the Department of City Planning. 1: Source: https://www.municode.com/library/pa/pittsburgh/codes/code_of_ordinances?nodeId=COOR_TITTWOFI_ARTIXPRTA_CH261PEPRTA_S261.05CIUSCOASIN Accessed Jan. 1/23/2017 2: Zoning Code Definition: “land occupied or intended to be occupied by no more than one (1) main structure, or unit group of buildings, and accessory buildings, together with such setbacks and lot area as are required by this Code, and having at least one (1) frontage upon a street.” Source: https://www.municode.com/library/pa/pittsburgh/codes/code_of_ordinances?nodeId=PIZOCO_TITNINEZOCO_ARTIXMEDE_CH926DE. Accessed Jan. 1/23/2017

Definitions Vacant vs. Abandoned: Vacant: a home which no person currently resides. Abandoned: the owner has walked away from their interest in the property. City of Pittsburgh, Definition of Abandonment3 “Provides a location for loitering, vagrancy, unauthorized entry or other criminal activity; Has one (1) or more broken windows, or two (2) or more windows boarded up for more than thirty (30) days; Has utilities disconnected or not in use; Is not maintained in compliance with City Code, including without limitation, Pittsburgh Building and Fire Prevention Codes. Has taxes in arrears for a period of time exceeding three hundred sixty-five (365) days; Is only partially completed, is not fit for human occupancy and there are no active building permits on the property that will result in restoration of the premises to a safe and habitable condition.” 3. Source: https://www.municode.com/library/pa/pittsburgh/codes/code_of_ordinances?nodeId=COOR_TITSIXCO_ARTVIIDIPR_CH671MAABREPRPEFO_S671.05REVAREPR Accessed 1/23/17.

Context: Land Use in Pittsburgh

City of Pittsburgh Parcels Number of Total Parcels, City of Pittsburgh: ~145,000* Number of Total Residential Parcels, City of Pittsburgh: 112,918* Vacant Residential Lots: between 25-27,000* Vacant Residential Parcels: 35,000 (23.3% of all parcels)* Vacant lots and properties are concentrated in several neighborhoods. ** *OPENPGH, 2011 **Housing Needs Assessment, 2015 City has ~145,000 total parcels. Source: Housing Needs Assessment, http://apps.pittsburghpa.gov/dcp/Pittsburgh_Housing_Needs_Assessment.pdf. Access 1/23/17

City of Pittsburgh Housing Housing Units:156,165** Single Family Homes: 84,989** 88% Occupied, 12% Vacant [not receiving mail delivery due to vacancy].*** National average: 10% 48% Owner Occupied. 52% Renter Occupied* Nearly 50% of Pittsburgh housing stock was built before 1939. * *Housing Needs Assessment, 2015 **2010 Census ***PCNIS 2009

Vacant Parcels By Council District Note: This data includes all tax delinquent parcels that are more than one full year tax delinquent, are vacant or have a condemned structure on them, or were purchased through the Treasurer’s Sale but are not part of or programmed to be dedicated to the City. Source: Department of City Planning, March 2014 Gilman Gross Rudiak O’Connor Harris Kraus Kail - Smith Lavelle Burgess

Tax Delinquency by Neighborhood Source: https://profiles.ucsur.pitt.edu/profiles/dataview/county/42003/tax-delinquent-parcels/?status=print; Accessed 1/23/17.

1937 Residential Security Map The Homeowner’s Loan Corporation was a federal government-sponsored program to help homeowners pay their mortgage during the Great Depression by refinancing. This rating was from the 1920s-30s.

City of Pittsburgh Market Value Analysis For more information on the Market Value Analysis, see: http://pittsburghpa.gov/dcp/mva Factors Housing Units Sales Prices Code Violations Section 8 / HCV Permits – New Res Percent Commercial Mortgage Foreclosures Vacancy

MVA/1937 Residential Security Map

~ 40,545 Parcels are Vacant or Distressed* Source: Department of City Planning, March 2014 ~ 40,545 Parcels are Vacant or Distressed* Vacant and Distressed is Defined by Vacant, Tax Delinquent, City Owned and/or Condemned

Acquisition Tool: Pittsburgh Property Reserve [PPR]

PPR Overview VPWG studied Cleveland model and proposed a cost-effective method of land acquisition of properties by City of Pittsburgh 501c3 community groups. Pittsburgh Property Reserve established by Council Bill 402 of 1998. Utilizes Tax Foreclosure process to recycle abandoned properties, which clears taxes owed to: City of Pittsburgh Allegheny County Pittsburgh Public Schools Note: the main goal is to collect taxes, not to recycle land. For original bill authorizing Pittsburgh Property Reserve, see: http://www.pcrg.org/wp-content/uploads/2008/07/original-property-reserve-resolution.pdf

The PPR Is… A tool to recycle land affordably in cases where: except for the cost of land acquisition, revitalization could occur; the market is weak; or property is ‘underwater’ (the liens and taxes owed exceed the value of the property). Exclusive to non-profit community based organizations. A virtual reserve with a 300 property maximum at any one time. A partnership between the City of Pittsburgh and community groups.

PPR Advantages Utilize State-legislated legal process to acquire land affordably which produces full clear (‘clean’) title at the end. City Departments take onus of doing the legal and financial work. Properties are available at end of process for approximately $3,000 each. Note: the City can only recover 3rd party costs.

PPR Disadvantages Significant investment of time is needed; properties are identified 7 months before sale and are not ‘clear’ until at least 12 months post-sale. Complicated, with many steps. At several stages of the process, a parcel can become ineligible for sale to the community group.

Usage Provisions CDC must: Have a redevelopment plan in place, including proof of (current or future) ability to finance and complete project Adhere to designated process and ALL timelines Remove properties from reserve in designated time (2 or 5 years) If necessary, submit a formal request for a time extension (properties with clear title) There is a one year restriction on utilizing Reserve if in default of provisions.

PPR Process Outline Property Research and Eligibility Request Feasibility Application and Selection Treasurer’s Sale & Redemption Period Hand Money and Promissory Note Clearing Title, Settlement Statement, and Closing

I. Property Research Property Information Location Owner(s) of record Street address Ward Lot/block number Owner(s) of record Vacancy status Must be vacant Tax delinquency At least 1+ years delinquent Liens or other foreclosure activity Data Sources County Real Estate1 Property information City of Pittsburgh Finance2 City tax delinquency County Office of Court Records3 Foreclosure activity Other judgments and claims USPS Vacant Address Database4 Available for nonprofits Department of City Planning5 SNAP Data Open Space Database Other Data Sources6 Western PA Regional Data Center Sources of Information: 1: Allegheny County Real Estate Assessment Site: http://www2.county.allegheny.pa.us/RealEstate/Default.aspx 2: City of Pittsburgh Tax Delinquency: http://pittsburghpa.gov/finance/tax-delinquency and http://apps.pittsburghpa.gov/finance/Web_Delinquent_9-6-2016_(1).pdf 3: https://dcr.alleghenycounty.us/SelectCaseID.asp?filename=Welcome.htm&NoLoginRequired=yes 4: Sign up here: 5: PGH SNAP: http://www.pittsburghpa.gov/dcp/snap/raw_data Web Maps from City Planning: http://pittsburghpa.gov/dcp/gis-webmaps-new 6: WPRDC: http://www.wprdc.org/

Requirements for Eligibility Eligible 1+ Years Tax Delinquent Vacant More than $1 of taxes owed (vacant lot) Ineligible Tax Payment Plan Sheriff’s Sale/ Foreclosure Bankruptcy Late Payment in Full Already in Acquisition Process Private Bidder Side Yard Sale Current year is not truly delinquent. Delinquency requires the previous year plus one other year – ideally, the year before and so on (as opposed to 15 years in the past) as this shows a recent path towards abandonment, instead of someone forgetting to pay a bill one year awhile ago. A property is not vacant if there are squatters, due to the Federal Relocation Act requirements. (The City does not use eminent domain; the URA and County will to varying degrees).

Other Barriers to Inclusion Inclusion of city-owned property Three Taxing Body guidelines Inclusion of occupied property Relocation costs Property reserve and for-profit developers ‘Flipping’ properties is prohibited [Immediate ReSale without improvement] unless community groups splits proceeds with the City of Pittsburgh. Objections, service, and other obstacles: City must be able to serve notification to property owners or heirs Objections can be made at various points in the process Property may be sold to a neighbor as a sideyard Judges can remove property from sale City councilmembers can refuse to pass legislation

II. Application and Selection Submit a Project Feasibility Application Strategic development plan Development and financing plan Commitments not necessary Group must perform research /due diligence Seek community/political support Examples of Partners: Urban Redevelopment Authority City of Pittsburgh Finance Department, Real Estate Division Pittsburgh Community Reinvestment Group Allegheny County Dept. of Economic Development Existing Community Organizations Affordable Housing Developers

Treasurer’s Sale & Redemption Period Properties Approved for Sale URA Approval City of Pittsburgh Approval No redemption or payment plan Properties advertised in newspaper, law journal Treasurer’s Sale Public bids do not result in cleared title Ninety Day Redemption Period Opportunity for CDC to request revenue properties

IV. Hand Money and Promissory Note Vacant Lots Cost :$100 plus 3rd party fees ($200 Deposit +$400 Promissory) Up to 5 years in Reserve Structures Cost: $1000 plus 3rd party fees ($200 Deposit + $800 Promissory) Up to 2 years in Reserve 3rd party costs: Legal notification (mailings and public notices) Title search and clearing costs Maintenance and inspections

V. Clearing Title & Closing Proposal to Purchase City Council Approves Sale Title Clearing Petition to quiet title Lienholder period to answer Satisfaction of Liens City designated buyback funds Court Authorizes Clear Title Deed Generated Settlement Statement Property is now eligible for closing

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Tax Delinquent Parcels ~9.0% (13,200)* parcels have been tax delinquent for 2+ years *Accuracy of Data cannot be guaranteed. Data Source: Department of City Real Estate 2014

Public Ownership 3,462* parcels are in the City’s name** (excluding parks, greenway, and other managed city facilities) 28,200 parcels within the city are vacant City Owned Vacant *Accuracy of Data cannot be guaranteed. Data Source: Department of City Planning/Allegheny County 2014 ** All of which do not have clear title

Publicly Owned Vacant Lots

The Absentee Landlord Price Point Sales 1/03-7/04 Below $20,000

Sales 1/03-7/04 $20,000-100,000 Median Sales Price 2005: $115,000 2015: $145,000 Source: trulia.com 6/25/2015 Average Sales Price 2015: $175,000 (Pgh) Source: realtor.com 6/25/2015

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