Vacant, abandoned, and distressed properties are a persistent problem in New York State’s most financially distressed regions. Thousands of properties currently sit empty throughout the state. The City of Newburgh, New York, provides a case study of the level of distress local governments are tackling, while serving as a beacon of hope for other municipalities. Despite a struggling economy, the strained fiscal condition of the city, and continuing bad news from the streets of Newburgh, several key opportunities to remediate distressed properties exist that will set the stage for future revitalization of the city’s physical and social fabric. There is a clear and persistent connection between the condition of the city’s vacant and abandoned properties and increased crime, declining property values, and the city’s limited tax base. Further, there is a sense of urgency among citizens and city leaders to embrace a new strategy for remediating distressed properties as the first step in revitalizing the city’s historic neighborhoods and overall economy.
October 31, 2014
Distressed Properties and a City’s Response
Sixty miles north of New York City along the Hudson River, the City of Newburgh offers scenic beauty, a rich cultural and architectural history, navigable Hudson River access, the juncture of two intersate highways, and proximity to Stewart International Airport. Newburgh is the site of General George Washington’s headquarters during the final year of the Revolutionary War and a large Historic District listed on the National Register since 1973. In 1952, Look magazine named the City of Newburgh an “All-American City.” A failed urban renewal program in the 1960s marked a turning point for the city’s reputation. This program leveled the majority of the buildings in the city’s waterfront and commercial districts, which comprised most of the city’s housing stock. The city has become increasingly distressed since, and in 1981, federal officials listed the city as one of the most distressed areas in the country.
The City of Newburgh has a population of about 28,651 and approximately 10,920 housing units. U.S. Census Bureau, Newburgh (city) QuickFacts, http://quickfacts.census.gov/qfd/states/36/3650034.html. Roughly 10% of these properties are vacant. Such a high number of vacant properties correlates with and corroborates the city’s high foreclosure rate.
Newburgh was hit particularly hard by the foreclosure crisis [of 2008] and has one of the highest vacancy and abandonment rates in New York State. As of March 2013 the Metropolitan Statistical Area that includes Newburgh had a foreclosure rate ranked #17 among the top 25 most impacted Metro areas. Nationally, it ranks #13 on a “Serious Delinquency Rate” index.
Land Bank Fact Sheet: Newburgh Community Land Bank (NCLB) (Nov. 2013), http://www.ag.ny.gov/pdfs/Newburgh_land_bank_fact_sheet.pdf.
The high vacancy rate in Newburgh also contributes to higher crime rates; attracts scavengers, squatters, and gangs; leads to an increase in fires; and reduces the value of neighboring properties. Studies have shown that every vacant or abandoned building reduces the value of the adjacent properties by approximately $7,000. From March 2011 through August 2013, 13 fire-damaged properties in Newburgh reduced the value of the surrounding properties by nearly $500,000. In addition, Newburgh has suffered a reputation for high crime since the early 1990s. In 2011, the crime rate in Newburgh was 739 per 100,000 persons, an alarmingly high rate when compared to the U.S. average crime rate of 305.5 per 100,000 persons. Crime Rate in Newburgh, New York (NY): Murders, Rapes, Robberies, Assaults, Burglaries, Thefts, Auto Thefts, Arson, Law Enforcement Employees, Police Officers, Crime Map, www.city-data.com/crime/crime-Newburgh-New-York.html.
Despite this distress, the city is experiencing a period of rebirth. In 2010, Newburgh developed an overall comprehensive program to shift the city’s future from one of hopelessness and blight to one with strong neighborhoods and ample economic opportunity. The program focuses on a transparent, proactive, coordinated strategy that includes improved code enforcement, a streamlined project review and approval process to assist existing owners with distressed property remediation, and a land bank to return vacant and abandoned properties to private ownership and the tax rolls.
To improve its code enforcement efforts, Newburgh will implement a case management system that tracks and communicates information for all code enforcement activities and actions, evaluates performance and effectiveness of various code enforcement interventions, and assists in cost recovery. Newburgh adopted a vacant property registry to track and monitor the city’s abandoned and vacant properties. Under this law, the city may collect contact information for an owner and an authorized agent who will receive notices of code violations or process, specify maintenance requirements and penalties for noncompliance, collect graduated fees based on length of vacancy, and require periodic property inspections. To address distressed rental properties, Newburgh also adopted a targeted rental license program that requires property owners to obtain a rental license before leasing property.
To remove obstacles to redevelopment and better open itself for business, Newburgh is streamlining its land use process. The city removed unnecessary process steps and consolidated all of its environmental review boards into one Conservation Advisory Committee. Newburgh will help applicants through the approval process by creating and distributing official process guidelines that present an overview of the city’s permit process, clearly delineate all process steps, and provide tips for navigating the process. The city also will create streamlined application forms and consolidate forms where appropriate. The city will provide informal, pre-application workshops with city staff and the planning board to offer general advice, as well as technical assistance with applications.
The city’s distressed properties remediation program features an innovative land bank. One of the first in New York State, the Newburgh Community Land Bank (NCLB), www.newburghcommunitylandbank.org/#, was incorporated under the New York State Not-for-Profit Corporation Law and is a community-owned entity that acquires title to real property that is tax delinquent, tax foreclosed, vacant, and abandoned. After acquiring this property, the NCLB manages, maintains, and redevelops these properties, then transfers them to new owners in ways that support community needs and priorities. To revitalize Newburgh’s downtown and increase the city’s taxable property base, the NCLB’s initial work focuses on the city’s East End Historic District north of Broadway, which contains the highest concentration of vacant and abandoned properties in the city, and will expand its footprint over time. City properties placed into the land bank are granted title free from liens and back-taxes, and NCLB properties are exempt from all taxation while they are held by the entity.
Finally, the city created its Distressed Property Task Force to facilitate its distressed property remediation program through an integrated, focused, and institutionalized city effort. A cross departmental team, the Task Force meets regularly to develop benchmarks, monitor progress, assess the effectiveness of ongoing interventions, and ensure ongoing civic engagement, transparency, and accountability.
If implemented properly, the city’s distressed property remediation program can become the central component of the city’s broader economic development and job creation strategy. To date, the program has rekindled hope and support and leveraged the energies and resources of local businesses, workers, investors, civic institutions, nonprofits, and the religious community. The program has attracted technical and financial support from outside governmental agencies and private entities. Newburgh’s distressed property remediation program successfully responds to the city’s need for a systematic and deliberate approach for returning properties to their highest and best use to stabilize the community’s property values and economic health.