KINGSTON, N.Y. — A proposed policy to dispose of certain city-foreclosed properties places a priority on creating affordable housing out of the parcels.
City Director of Housing Initiatives Bartek Starodaj told aldermen during a meeting of the Common Council’s Finance and Audit Committee on Wednesday that the proposed disposition policy had undergone a few revisions since it was initially presented to them last month. He said those revisions included clarifying that the amount of back taxes owed on any property would include taxes and fees incurred before, during, and after the foreclosure process.
The second change was to make it clear “that the objective of this disposition policy is the production of affordable housing,” Starodaj said. “So we added a specific affordable housing goal that the (Kingston City) Land Bank has to comply with as part of its reporting under this disposition policy.”
The policy states that its intent is to incentivize the production of low-to-moderate affordable housing opportunities in the city. Accordingly, it is expected that at least 65% of all one- or two-unit residential properties sold by the Kingston City Land Bank will be disposed to households at or below 130% of the area median income for Ulster County, the policy states.
Starodaj said a provision was also added that would allow the city to offer certain residential properties to another affordable housing organization should the Kingston City Land Bank not comply with the terms of the disposition policy.
The committee ultimately endorsed a resolution to adopt the property disposition policy. That resolution must still go to the full council next month for a vote.
Under the proposed policy, any one- or two-family residential properties the city forecloses on that owe less than $30,000 in back taxes would be first offered to the Kingston City Land Bank, Mayor Steve Noble previously told the committee. The land bank, which the council created, would not necessarily pay the full amount of back taxes owed on the property. Noble said the land bank could get the property at a discount if it is able to then sell the parcel to someone who earns less than the area median income.
For properties purchased by households earning less than 80% of the area median income, the land bank would pay the lesser of $7,000 or the full amount of back taxes and fees owed at the time of the foreclosure, according to the proposed policy. That amount would increase to the lesser of $13,000 or taxes and fees owed for households earning between 80 and 100% of the area median income. For households earning between 100 and 130% of the area median income, the land bank would pay the lesser of $18,000 or taxes and fees owed on the property. The land bank would pay the full amount of back taxes and fees, plus 10% of the net sales revenue, for any property sold to someone earning more than 130% of the area median income.
Noble said there also is a provision for the land bank to acquire any vacant land the city forecloses on that owes less than $30,000 in back taxes.
For properties that owe more than $30,000 in back taxes, the city would set up a process to accept requests for proposals from potential purchasers, Noble said. He said it would then be up to the council to decide whether to award the property based on those requests. If the council opts not to award the property, it would then go to auction, which is the least advantageous option because the city would lose a lot of control over what happens with it, Noble said.
Noble added that the disposition policy has timelines and requires quarterly reports from the land bank. He also said commercial properties would not be covered under the policy.
The city could decide to keep a foreclosed property it determines there is a purpose for, according to the proposed policy. All transfers of properties would be subject to approval from the Common Council.
“I am looking forward to this helping the land bank move along and create more affordable homeownership in our city,” Alderwoman Michele Hirsch, D-Ward 9, said. “And I’m happy to see that we (the council) retain control of the situation for each transfer.”
