Its stone veneer cladding is hideous to behold in the afternoon shadow cast across the street by the clock tower of Redeemer Lutheran Church, but this run-down property at 29 Rogers Street in Kingston has been marked for repossession by Kingston City Land Bank (KCLB).
Behind a wrought-iron railing at the top of a short flight of crumbling concrete, Landbank CEO Daniel Kanter spoke to supporters, allies and the curious who had gathered on the sidewalk outside. Among those in attendance were Kingston Mayor Steve Noble and State Senator Michelle Hinchey.
“We rolled up our sleeves and got to work rehabilitating the first round of zombie properties that were made available to us,” Katner said, using the loose slang word for derelict properties burdened with tax arrears , whose titles exist in real estate limbo. “At the end of 2021 we completed our first three rehabs and our first three families have been living the dream of owning their own home for almost a year now.”
Tackling rot and making neglected properties available to prospective homeowners is KCLB’s mission. The non-profit organization was founded four years ago this month by Kingston’s Common Council and the Empire State Development Corporation to bring tax-exempt properties owned by the city back onto the housing market.
A partnership between New York State’s Homes and Community Renewal (HCR) Division and the Community Preservation Corporation (CPC) has facilitated this mission.
“CPC is a not-for-profit mortgage company,” said CPC President Sadie McKeowan. “We fund ourselves with private sector capital, which we raise and invest in neighborhoods, which is typically very difficult for banks.” The CPC is investing $40 million to create opportunities for seed developers and small-scale development. The Legacy City Access Program was created when CDC funds were added to the capital by government agencies and other partners. The program will channel millions of dollars to combat neighborhood rot and transform previously lost causes, particularly vacant or distressed properties.
Kingston first in the state
Kingston City Land Bank is the first land bank in the state to complete financing through Legacy Cities. Similar awards are in the pipeline for eleven other land banks across the state.
CPC provided $866,661 in financing to Kingston City Land Bank. HCR provided an additional $600,000.
“As everyone knows, Kingston, like many communities in the Hudson Valley, is in need of affordable housing,” said HCR Commissioner RuthAnne Visnauskas. “Real estate prices here have accelerated in a way that has made it unaffordable for so many who are already here, as well as people looking to move here.”
Funds from the Legacy City Access program will be used to fully rehabilitate four foreclosed homes in Kingston.
“We bought her for the full price of the tax refund,” said Mike Gilliard, executive director of the KCLB. “Between the purchase price and the cost of rehab, because rehab isn’t exactly cheap, we also put some money on the table. The cost of rebuilding is getting expensive, and we’re selling them for a lot less than they’re costing us. So we need these partners and private lenders.”
The KCLB is a corporation under public law that can accept tax-deductible donations, a donation for non-profit organizations.
“In July 2020, we purchased five foreclosed properties from the City of Kingston,” says Gilliard, “and initiated a pilot program to begin rehabilitating and selling these properties as affordable housing.”
Set for success
Affordability can be a very relative term. “We’re not interested, nor do we think it’s the right thing to do with an unaffordable mortgage provider,” says Gilliard. “The interest rate is always a fixed rate, and there are many programs to pay for down payments and graduation fees through the state. Linking these together really paves the way for people to succeed.”
Gilliard claimed that everyone who has bought a home from the KCLB to date has found their household expenses cut by almost half because of the way the program was underwritten.
This talking point reveals as much about the inherent disadvantages of renting as it does about the habits of some lenders in taking advantage of potential buyers.
“Just to create expectations is not an easy process,” says Gilliard. “Not everyone who becomes a first-time homeowner is able to qualify. For example, there is an obligation to buy a home mortgage. But we work with prospects, household families to submit an application and go through the application process. And then the families are selected by drawing lots, completely independently of our decision-making authority. We don’t choose the families.”
While selecting potential homeowners via a lottery can have a dystopian flavor, blind selection brings a kind of justice to the process.
“We really tried to prioritize the expansion of home ownership for black households,” Visnauskas said. “People who have been excluded from the housing market system in the past, not just in New York state but across the country, and first-time buyers who are having trouble finding a home they can afford.”
The amount of homes KCLB is putting back on the market is far from enough to solve Kingston’s housing crisis, admits CEO Gilliard. But KCLB thinks it’s done a good job for the people it’s helped. Applicants qualify based on household size and household income.
“The best way to get involved with our work and become aware of a home for sale is to join our mailing list on the KCLB website,” says Gilliard. “We’ll be sending out notifications when homes are for sale and it’s going out to everyone in the public. Everyone is invited.”
In addition to the property at 29 Rogers, three more are being renovated at 169 Hurley Avenue, 237 East Union Street and 63 German Street.
Foreclosures are run down and long neglected. Maeda Construction, a Hudson Valley minority contractor, will install new kitchens, baths, roofing, flooring, insulation, windows and doors. It will modernize structural, plumbing and electrical systems.
Goldstein Hall will provide legal services. Advisory services are provided by Pathstone Community Improvement of Newburgh.
“It’s programs like this and the funding that we can reallocate here at the state level,” State Senator Hinchey said, “because that’s going to be a game changer for so many families in our communities.”