What’s New? – The Latest Tools, Tactics and Trends for Fighting Blight PAHRA Conference September 19, 2017

Trending now Growing popularity of tax foreclosure sales Focus on “middle neighborhoods” Partnerships to tackle blight and abandonment PA’s Land Banks

Tax Sales Inexperienced and underfunded buyers are flocking to tax sales to find real estate bargains. The tax sale process perpetuates blight by allowing sale to the highest bidder with no requirements regarding property redevelopment capacity or intent. TACTICS TO COUNTER: Work with tax claim bureau to ensure that winning bidders don’t have outstanding code violations and haven’t had a landlord license revoked. Make sure that “Condemned” properties are identified as such on tax sale lists. Some code enforcement professionals have advocated for a bond requirement. “Like a flea market for property speculators” – Dave Patton Harrisburg Codes Director

Middle Neighborhoods “One way to think about middle neighborhoods is they are on the edge between growth and decline. These are neighborhoods where housing is often affordable and where quality of life— measured by employment rates, crime rates, and public school performance—is sufficiently good that new home buyers are willing to play the odds and choose these neighborhoods over others in hopes they will improve rather than decline.” Paul Brophy, Editor “On the Edge: America’s Middle Neighborhoods” case studies and essays by leading policymakers, community development professionals, and scholars that aims to stimulate a national dialogue about middle neighborhoods

Middle Neighborhoods Nearly half of all urban residents currently live in a middle neighborhood. But conversations about cities usually focus on the problems of concentrated poverty, gentrification, and the need for downtown revitalization. Largely missing from the discussion - middle neighborhoods. Those neighborhoods in between the thriving and the distressed neighborhoods. On the edge between growth and decline. Authors contend that investing in middle neighborhoods can often produce the biggest returns. TACTICS TO CONSIDER: Understand the middle neighborhoods in your community. Address blighted and abandoned properties quickly to undercut contagious blight. Design strategies to build residents’ confidence in the future of their neighborhoods.

Partnerships to Tackle Blight Tackling blight is a community effort. Residents, neighborhood organizations, nonprofit organizations, developers, landlords, businesses, and institutions are essential partners to resolve blighted properties. Plus, funders are looking for partnerships when selecting projects for grants. TACTICS WORTH TRYING: Tri-County Community Action performed a housing conditions survey of all properties in the National Historic Mount Pleasant District, South Allison Hill neighborhood of Harrisburg.

PA Land Bank Act Signed into law in October 2012 Provides a flexible and optional tool for local governments to systematically remove problem properties from an endless cycle of vacancy, abandonment and tax foreclosure, and return them to productive use Signed into law in October 2012 PA joined other states like MI, NY, and OH in authorizing land banks National best practice Recognition of need for another new tool to address blight Goal – healthy real estate market Goal – development serving the public interest Goal – thriving, vibrant communities

How Does a Land Bank Work? Side lot dispositions New and rehabbed housing Brownfield development Parks and community spaces Green infrastructure Enacted to enable communities: To systematically remove problem properties from an endless cycle of vacancy, abandonment, and tax foreclosure, to clear title, and return them to productive use. Land banks are a tool to address long-term vacant and abandoned blighted properties. Blight is remediated by getting the property into the hands of a responsible new owner who will choose to either demolish or rehabilitate the property. A land bank can make problem properties more attractive by working to remove liens and clear back taxes ~ clean title. Image credit: Philadelphia Land Bank

How Does a Land Bank Work? Bank Owned Properties Schuylkill County Land Bank received a donation of this property plus $10K for rehab from Wells Fargo. With the Wells Fargo $10K and an additional $10K in Act 137 grant funds, the Land Bank will rehab the property and make it available to a new owner. Image source: Republican Herald

Funding – PHARE/Realty Transfer Tax PHARE stands for Pennsylvania’s Housing Affordability Rehabilitation and Enhancement Act. Also known as the state housing trust fund, PHARE expands opportunity for people and communities in need by funding local housing programs – including programs to reduce blight. Think of the trust fund as kind of a giant piggy bank that can take in funds from different sources. Marcellus Shale Impact Fees – Act 13 of 2012 Realty Transfer Tax – Act 58 of 2015 (expands fund to all counties) National Housing Trust Fund    So far, PHARE funds have been saved in current budget negotiations. Continued vigilance and advocacy required to protect these funds

Funding – PHARE/Realty Transfer Tax Schuylkill County Land Bank $175,000 grant (April 2017) Acquire and rehab of 2 vacant properties To be sold to low-to-mod income households Partners: Ashland Borough and Delano Township (land bank members) and Wells Fargo

Funding – County Demolition Fund Act 152 of 2016 allows county to adopt a resolution or an ordinance that authorizes the recorder of deeds to charge and collect an additional fee not to exceed $15 for each deed and mortgage recorded Fees collected must be deposited in a county demolition fund and used exclusively for the demolition of blighted property in the county

Funding – County Demolition Fund To date, 5 counties have established County Demolition Funds under Act 152 and filed with DCED: Lawrence, Delaware, Dauphin, Cameron, Cambria How will the Act 152 funds help? Lawrence County expects to demolish 10- 15 properties per year through the County Demolition Fund. (Initial report filed with DCED on 2/17/17) Delaware County estimates about $450,000 will be generated and that 9 to 15 residential and nonresidential buildings could be demolished per year. (Initial report filed with DCED on 2/14/17)

Legislative Developments HB 352 Adverse Possession Legislation Addresses clouded title issue. Would allow an individual to obtain a clear title to a property under adverse possession in 10 years instead of the 21 years required by current law. Limited to single- family home properties that are less that one-half (1/2) acre in size. HB 653 Expedited Foreclosure for Vacant and Abandoned Properties Would provide a process to have a property certified as vacant and abandoned, either by a municipal code officer or through judicial certification, before an expedited foreclosure may commence. Specifies the process a lender must follow when using expedited foreclosure on these properties. Reduces foreclosure process time by 240 days (currently takes 300-540 days in PA). SB 667 Land Bank Powers Expansion Would provide to redevelopment authorities certain powers given to land banks pursuant to the PA Land Bank Law, Act 153 of 2012.

Contacts Winnie Branton Branton Strategies LLC wbranton@brantonstrategies.com David Hunter Policy Director Housing Alliance of PA David@housingalliancepa.org www.pablightlibrary.org