Skip to main content

abandoned properties

Like a lot of communities, Le Roy trying to figure out the best way to deal with abandoned properties

By Howard B. Owens


It's a decade since the national home mortgage meltdown but there are still communities plagued by vacant and abandoned properties, including in Western New York, including the Town and Village of Le Roy.

There are about 20 properties in the town and village, Town Supervisor Steve Barbeau (top photo) said last night, that are at a minimum unsightly, but they also present a health and safety issue.

In many cases, if not all, the properties are banked owned and the financial institutions show little interest in dealing with the properties.

"Almost all of these properties are uninhabitable," Barbeau said. "They haven’t been inhabited for years. We’re not talking about 30 days, or 90 days, or 365 days. There are a few in here, as I eyeball it, where it’s been three or four years, most of all the rest of them have been vacant for a decade."

To help deal with the issue, the town and village of teamed up to write a new ordinance that would define vacant and abandoned properties and put some pressure on the title holders to sell the parcels, including a fee that could cost a property owner as much as $1,500 a year if the building continues to sit vacant.

Village and Town officials held a public hearing on the proposed ordinance at the Town Hall last night.

A few of the residents who turned out to speak were either skeptical about the ordinance as written or downright hostile to the idea.

The way Jason Shu has read the ordinance is that if he went on vacation for six weeks, the code enforcement officer could declare his property vacant and abandoned and he would either have to sign a waiver to allow the code enforcement officer to enter the property or pay a fine. He called the law overly broad, subject to selective enforcement, and a potential violation of his Fourth Amendment rights.

"I agree with the whole problem of abandoned property but there’s a different approach to it," Shu said. "It doesn’t seem right. It doesn’t seem fair. The selective enforcement is only going to lead to problems."

Both Barbeau and the town's attorney Reid Whiting said that isn't how the ordinance works.

First, Barbeau said, the ordinance defines temporary vacancy and seasonal use, which would cover a six-week vacation, and the 30-day clock for registering the house wouldn't begin until after a code enforcement officer determined the property appeared to be abandoned.

There are a number of criteria the officer would weigh to make that determination, such as that nobody is living in the house, it's devoid of contents, lacks utility services, is or has been subject to foreclosure, and code violations.

Properties determined "temporarily vacant" would not be required to register as vacant and abandoned.

Whiting said there is no violation of the Fourth Amendment because either the property owner voluntarily signs a waiver or the code enforcement officer would be required to get a warrant to enter the property from a judge.

Leonard Dries attacked the law as a violation of private property rights, yet another high New York tax, and accused Le Roy's elected officials of not listening to his concerns.

Because of the law, he said, which he says is a violation of property rights, the town or the village will end up getting sued.

"You're going to start doing all this stuff on these properties and you’re going to bite the wrong hand and the lawsuit is going to overwhelm you," Dries said.

At times he interrupted other speakers or tried to shout them down.

One of the properties of concern discussed during the meeting is the boarded-up residence next to the Le Roy House. Historian Lynn Belluscio said she fields constant complaints from visitors about the unsightly building.

"They come to us and want to know why Le Roy can’t deal with that property next door," she said.

Dries responded, "Then don’t look at it. Tell them not to look at it."

" I’m going to tell 10,000 people -- " Belluscio said.

"-- you don’t get 10,000 people, you don’t 100 people a day coming through. Le Roy is a dead town," Dries said.

Barbeau rose from his chair and said Dries was out of order.

"That’s what we get to live with twice a month," he said. 

"Oh listen, Stevie Bo-Bo, sit down and shut up," Dries said. "You are paid by my tax dollars. I don’t want to hear your mouth."

Barbeau managed to restore order and the meeting continued.

Belluscio said the Jell-O Museum has made four attempts to buy the abandoned property, but that bank, based in Hong Kong, won't budge on its $119,000 asking price. Belluscio said she couldn't be irresponsible with how she spends the nonprofit's money and the house isn't worth $119,000 with all of the damage. The bank doesn't want to take the loss, though, of selling it for less.

"They really don't have an incentive to sell," Belluscio said. "They sit back and wait as long as they possibly can. They don't care that the house has deteriorated."

Dealing with bank-owned properties is exactly why the new law is needed, said Mayor Greg Rogers (bottom photo), who is also a real estate agent.

"We felt some of our neighborhoods need to have some of these properties picked up and cleaned up," Rogers said. "Or at least give the owners, and a lot of times it’s banks, further incentive to try to get these back on the market and be viable properties.

"If you live in one o those neighborhoods next to an abandoned house, that becomes an issue and it becomes an issue for the street," Rogers added.

Barbeau added later, "if anybody argues that it doesn’t depress the values of properties around it, they don’t have a clue."


Council members raise concerns about abandoned properties dotting the city

By Howard B. Owens


The city continues to be dogged by vacant, abandoned and unkempt residential properties, prompting a City Council conversation Tuesday night about the city's progress on a few specific nuisance properties.

City Manager Jason Molino said the city's effort to deal with so-called zombie houses is making progress, but it's a "slow-moving train."

"Some of the vacant homes that were vacant are no longer vacant," Molino said. "They’ve been picked up and worked on, so we're seeing some progress."

Three properties, in particular, were singled out by council members -- 129 Hutchins St., 404 S. Jackson St., and a house on Ellicott Avenue.

The house on Hutchins fits the description for what officials usually mean by a "zombie property." It's long been vacant and there's little indication that anybody is taking responsibility for it.

There's junk piled on the front porch and scattered around the back yard, and the grass hasn't been cut all season. Inspectors have posted a notice on the front door.

Councilwoman Rose Mary Christian has determined the USDA, which apparently financed the purchase the property, has possibly foreclosed on the house and she's been in contact with USDA officials about cleaning up the property.

At 404 South Jackson, across from Jackson School, is the burned out hulk of a former multifamily complex. The building was destroyed in a fire March 8 and has sat untouched since, except for a safety fence the city erected around it.

Molino said the owners, Barton H. Bowman and Thomas W. Hallock, have been cited and were ordered to appear in court earlier this month, but neither showed up in City Court, so a warrant has been issued for both men.

Through the normal court process, it could take 30 to 90 days to get the structure torn down, Molino said. If the city wants razed sooner, like immediately, the city could do that, but would have to foot the bill.

As for the property on Ellicott Avenue, Councilman Bob Bialkowski raised it as a possible zombie property. A check of the residence led to the discovery of an open door with possible forced entry. When police responded, there was nobody inside and dispatchers were able to contact the property owner, who indicated she is in the process of moving out. There was no forced entry, a police officer said. The broken glass near the door was from damage the property owner knew about.

The city has a tax exemption available for owner-occupants who buy a zombie property and rehabilitate it. While there have been several inquiries about the exemption, and several former zombie houses are now owned and occupied, no exemptions have been granted yet, Molino said. That could soon change.

Molino said a young couple recently purchased a house that had been vacant for at least seven years, getting it on a short sale, and the couple plans to invest a significant amount of money rehabilitating it. Molino said he is meeting with the couple next week to discuss the exemption.

"This definitely qualifies," Molino said. "This might be our first actual case."

The city is also working with potential community partners on a loan program to help people finance the purchase of owner-occupied former zombie homes. He said an announcement about that program could come within 30 to 60 days.


County and city looking into agreement to form nonprofit corp to help deal with vacant, abandoned property

By Howard B. Owens

In an effort to more effectively and efficiently deal with vacant and abandoned properties, the city, the county and the counties of Livingston and Orleans are considering the formation of land banks.

Land banks have been around for just this purpose since 1971 but didn't start to get traction for county and municipal governments until the early 2000s when Genesee County, Mich., started a successful land bank.

Land banks, which are nonprofit corporations formed by local governments, are able to acquire tax-foreclosed property on a streamlined basis and then more quickly get that property back into residential or commercial use.

Typically, land banks are self-funding, generating revenue from real estate sales that is reinvested in the process of moving more property from unproductive use to productive use.

They're particularly popular in rust-belt communities where populations have declined and industry has left hulks of buildings vacant. 

The proposed agreement between the three counties and the city has a provision for the land bank to hire an executive director and potential staff members.

The board of directors would be appointed by the government bodies and those members would serve without compensation.

The corporation would be known as the GLO Regional Land Bank.

County Manager Jay Gsell introduced the potential agreement to members of the County Legislature on Wednesday evening. The Legislature has not yet been asked to take action on the proposal.

Currently, when a property owner allows a parcel to pass into tax foreclosure, the property is sold at auction. Each local government would have the option to let a property go up for auction or transfer that parcel to the land bank.

New owner takes long-vacant house off city's 'zombie' list right after court fines bank

By Howard B. Owens


Pat O'Brien was a little surprised, but not shocked to learn yesterday that the house on Ross Street that he moved into Monday was the subject of a $841,500 fine by Batavia City Court for a long string of alleged code violations.

Before O'Brien bought the home, the city determined the responsible party for the property was HSBC Bank. The bank was allegedly issued a summons to appear in court to answer to the code violation charges, but reportedly, no representative of HSBC ever appeared.

When defendants fail to appear in court as directed, judges have the discretion to find the party guilty and after another demand to appear in court, in the defendant's absence, the judge can issue a sentence.

That's what Justice Durin Rogers did Friday against HSBC and another entity responsible for a local property that has allegedly failed to appear on the matter.

That defendant is Kaja Holdings 2, LLC, held responsible for 21 Hutchins St., Batavia. Kaja was found guilty in absentia of 1,092 violations of the city's property maintenance code.

HSBC was found guilty of 3,336 violations.

Rob Sherman, corporate communications for HSBC, did not respond to a voicemail left yesterday requesting comment.

Kaja Holdings did not respond to a request for comment. 

City Manager Jason Molino said the judgments against HSBC and Kaja are part of the city's ongoing, aggressive efforts to deal with so-called "zombie" homes -- homes that have been left abandoned and vacant for extended periods of time following a foreclosure.

"We going to push aggressively with non-responsive individuals with an interest in properties in hopes of getting people's attention and start getting them to respond," Molino said.

Molino said the city was only notified on Monday that the Ross Street property had been transferred to the new owners.

"We're pleased with the outcome," Molino said. "It's exactly what we like to see."

Whether HSBC will still be on the hook for the $841,500 fine, Molino said he didn't know. That will be up to Justice Rogers to decide.

As for Pat O'Brien, he said he's thrilled with the house and happy to become a Batavia resident.

He took a job in Henrietta in the fall and found the house on the house listed for sale on the Fannie Mae Web site. He worked with local real estate agent Chuck Flynn to complete the purchase.

He's had a new gas line installed (it was cut off at the street), new electrical installed and the city turned the water on two days ago, making the house livable once again.

"Even though it looks a little bit bad on the outside, surprisingly, it's not that bad on the inside," O'Brien said. "Structurally it's really sound."

O'Brien said he liked Batavia because it's a small, quaint community that seems to have a lot going for it. Workers who have come over to his house have had good things to say about Batavia, he said, that it's a community on the rise.

And commuting to Henrietta, he said, is no big deal.

"Back in Jersey, I actually had a longer commute, so the commute between Batavia and Henrietta doesn't bother me," he said. "It's all Thruway. It's under 45 minutes, which I don't think is that bad."

Molino said O'Brien will be given time to get the house in good shape once again, which O'Brien said he intends to do.

"If you look at the house, it's actually not as bad as you think because the top third has all been aluminum sided and so I only have to repaint the lower two-thirds of the home, so like I said, I think by the end of the summer it should be a gem on the street," O'Brien said.

Our news partner WBTA AM/FM contributed to this story.


21 Hutchins St., which is vacant and condemned.

Legislature passes zombie house bill for Batavia

By Howard B. Owens

Press release:

Assemblyman Steve Hawley (R,C,I-Batavia) today announced that a bill he introduced to provide tax incentives to renovate "zombie" properties in the City of Batavia, A.7570-A/S.5196A, was passed by the Assembly and Senate on Thursday.

The legislation establishes a program giving property-tax assessment incentives to residents of Batavia who purchase and renovate dilapidated single-family properties. The program, if successful, could be allowed in other cities statewide.

“I was pleased to have had the opportunity to work with Senator Ranzenhofer to ensure that this legislation passed both houses before the end of session,” Hawley said. “Zombie properties have plagued Batavia for years and this is a monumental step toward addressing the issue. Residents who purchase these dilapidated properties will be given a property-tax exemption to help alleviate the financial burden of repairs made to the home.

"This will ensure that home renovation costs do not exceed property value. Also, the legislation protects against large real estate companies buying many properties and subdividing them into apartments or multiple-family dwellings. The bill will now be sent to the governor for his signature. If it receives his approval the program will take effect immediately.”

Senator Michael Ranzenhofer carried the bill in the Senate and Hawley applauded his efforts and said he is pleased to have worked with him.

“By spurring redevelopment of vacant homes, this innovative program will help to benefit all taxpayers," Ranzenhofer said. "For prospective home buyers, it will provide a real incentive to make costly repairs to a distressed home. For neighbors, it will make their street a better place to live and prevent their home values from being depressed.

"For all taxpayers, it will help to dilute the burden of property taxes by adding more properties with higher valuations to the tax rolls,” Ranzenhofer said. “I am hopeful that the Governor will sign it into law.”

Council takes first step to create tax exemption for investment in vacant and abandoned properties

By Howard B. Owens

To whatever degree some council members were skeptical of a proposal to create a tax exemption to encourage investment by home buyers into vacant and abandoned houses, that skepticism is gone with the change of the season.

The Batavia City Council voted unanimously to move forward with the process to create the exemption. 

That process requires the council to pass a resolution, which it did, asking the Legislature to create a bill and generate a bill number amending the city's local law to create the exemption.

Once that's done, the city can give final approval to the exemption.

The exemption would apply to any single-family home that has been abandoned and vacant for at least three years and a would-be owner-occupant is planning on investing money on restoration.

The targeted home is one where the cost of rehabilitation exceeds the value of the home.

Typically, a home requiring less repair wouldn't yield much in the way of an increase in assessed value, making the proposed exemption of little value.

The exemption only applies to the portion of the property tax generated by an increase in assessed value as a result of improvements to the property.

There are a number -- though the exact number is unknown -- of vacant and abandoned homes in the city that can be salvaged before they completely deteriorate.

City officials have made the point several times that vacant and abandoned properties bring down neighboring property values and are a potential blight on the city.

In a report to Council, City Manager Jason Molino said vacant and abandoned properties are costing the city at least $25,000 in unpaid taxes per property, $11,300 in unpaid fees and fines and more than $500,000 in lost local buying power.  

The assessed value of the properties continues to fall while they sit dormant.

The proposed exemption is just one prong in the city's strategy to deal with vacant and abandoned properties. City officials are also trying to inventory all the properties and use code enforcement to get banks, mortgage and/or title holders to deal effectively with the properties or get them on the market.

Creating incentives for potential home buyers to invest in such properties will help spur banks into putting the homes up for sale, it's hoped.

Two previous objections raised by council members were addressed in Molino's report.

First, if the property owner is eligible for more than one exemption, the property owner will receive only one exemption and that will be the one most financially favorable to the property owner.

Second, on the objection that the proposed exemption creates an unfair disparity in benefits, there is already a tax-exemption program in place for property owners who wish to remodel their existing properties. The council approved the exemption in 2010 and it applies to all 3,611 single-family homes and 712 double-family homes in the city. It provides an exemption on the increase in assessed value for remodeling projects with greater than a $3,000 investment.  

So far, four property owners have entered the program with an average investment of $33,000 and resulting increase in assessed value of $22,225.

Councilman Eugene Jankowski said he received a number of favorable comments from constituents about the proposed exemption.

"People say we're on the right track," Jankowski said.

Council delays on proposal to deal with vacant and abandoned homes

By Howard B. Owens

The Batavia City Council took a step back from a proposal aimed at spurring investment in vacant and abandoned residential properties.

Rather than send a resolution to state representatives asking for legislation to make a tax exemption for investment in such properties possible, the council asked that the proposal be brought back to a future conference meeting.

City Manager Jason Molino warned that with the legislative session under way and ending in June, a delay could decrease the opportunity for timely passage of the legislation.

Councilman Eugene Jankowski took the lead role in opposing passage of the resolution last night.

Jankowski said what little feedback he's gotten on the proposal from constituents is opposition to other homeowners getting a tax exemption not available to them.

He also said he would like to provide residents with more time to digest the proposal and provide feedback to council members.

Molino said the idea that current homeowners are missing out on something is a misunderstanding what the tax exemption is about.

The proposal would provide a limited tax exemption on select owner-occupied properties to offset the significant investment required to rehabilitate vacant and abandoned homes. 

The exemption would be graduated over a number of years, starting at 100 percent of the difference of taxes due on the increase in assessed value that would result from rehabilitation. The homeowner would still pay taxes on the original assessed value.

The exemption is called "gap financing" because it's designed to address the fact that it simply isn't financially realistic to expect somebody to invest tens of thousands of dollars to save a home that has limited value in a market not known for a rapid increase real estate values.

"We're trying to create a tool that attracts investment," Molino said.

The value of the tax exemption, Molino said, would be less than what the city would start receiving in water and sewer payments once the house was occupied again.

In some cases, it would return properties back to tax roles that previous owners have abandoned and allowed to go into foreclosure.

Councilwoman Patti Pacino pointed out that by saving these homes, it would help protect the home values of neighboring residents.

Both Jankowski and Councilwoman Rosemary Christian voted against a motion to suspend the rules for moving the proposal to the same night's business meeting. A rules suspension requires a unanimous vote to pass.

City putting pressure on banks to deal with vacant and abandoned properties

By Howard B. Owens

The modest yellow house at 420 North St., Batavia, was probably somebody's dream home in 1930.

Today, it's emblematic of the difficulties the City of Batavia faces in dealing with abandoned and vacant homes.

There are somewhere in the neighborhood of 50 such homes in Batavia and City Manager Jason Molino thinks it's an important enough of a problem that he would like to spend more time during his work days on the issue in 2015.

Vacant and abandoned homes can attract squatters. They serve as eyesores for neighborhoods. They bring down property values for surrounding residents. They are safety hazards. They can contribute to economic decline. They use city resources without contributing revenue or economic impact to the city.

It's important that vacant and abandoned homes be returned to the housing stock quickly. That's one reason the city is getting aggressive with banks that hold mortgages, and in some cases even hold title, by putting pressure on them to deal with code enforcement issues. 

Today, six banks were summoned to City Court to answer to code violation citations.  

Three banks were to be represented by attorneys when their cases were called. One bank previously received an adjournment of its case because the property will soon be sold. And counsel for two banks didn't show at all.

One of those was Bank of America, the bank the city identified as responsible for the quaint 1,600-square-foot house at 420 North St.

After court, The Batavian reached out to Bank of America and our call was returned by Rick Simon, a California-based spokesman for the bank. 

Simon said that Bank of America is not responsible for 420 North St.  

He referred us to Rushmore Loan Management Services in Irvine, Calif.

A spokeswoman for Rushmore quickly returned our call, but said she needed time to research the property before responding to questions.

The confusion over who is responsible for the property is exactly the sort of problem the city runs into as it tries to deal with vacant and abandoned homes.

First, the city must research who the mortgage holder is, whether there's ever been a foreclosure, or if the bank or somebody else ever took title, and then find the right person to talk with about the property.

Often times, Molino said, these big banks aren't even certain what properties they are handling and whether they're now responsible for it.

Simon, with Bank of America, said his company tries to be responsive to municipal governments with troubled properties in their neighborhoods, but it's up to the local officials to contact the bank. They don't know there is a problem unless they're told, he said.

In the case of today's scheduled court appearance for 420 Bank St., Simon couldn't confirm the bank ever even received the summons.

City records indicate the summons was delivered in October to a bank employee in Charlotte, N.C., where Bank of America lists its official headquarters.

The Bank of America employees responsible for these properties, whom Simon could normally check with, the spokesman said, were all off on this Friday afternoon.

After an initial phone conversation, he did further research on 420 North and called back to report bank records show responsibility for 420 North was transferred to Rushmore.

To help smooth away these wrinkles in the accountability process, Molino would like to see the state pass a "zombie law." The law would make it possible for municipalities to hold banks who issued the mortgage on the property accountable for the condition of the property. It would be harder for bankers to throw up their hands and say, "not our problem."

For the most part, however, bankers have been responding to the city's code enforcement efforts.

Of the four properties represented by attorneys in City Court today, all four are either now in compliance or moving toward compliance.

"We are getting some banks to take responsibility for the properties," Molino said. "We're serving papers and finding ways to get them into court where judges are receptive to telling them they have to comply with the code."

Today's successes:

  • 35 Manhatten Ave., with Michale Jabloski representing Wells Fargo. Many repairs were completed Feb. 1, though there is still some work to be done. The case was continued to April when the city expects Wells Fargo to be in full compliance.
  • 129 Summit St., another Wells Fargo property. Wells Fargo was not aware it was responsible for this property until just recently. The bank is awaiting more information from a code enforcement officer on what work needs to be done on the property. The bank was given until May 15 to bring the property into compliance.
  • 6 Manhatten Ave., with Jason Racki representing Ocwen Mortgage. Since Racki's last court appearance on the case, many of the required repairs have been completed, but there is new water damage to the structure that must be repaired. Ocwen has also put the property out for bid and anticipates accepting a bid soon. The matter was continued to May 15.
  • 40 Manhatten Ave., with Richard Fay representing Citi Mortgage. There have been previous appearances on this property and some work has been done, such as repairing and repainting the garage door. The chimney has been stabilized and the bank is now putting siding out to bid. The case was continued to May 15.

Also not showing today was HSBC bank, whom the city is holding accountable for 128 Ross St.

Another bank, J.P. Morgan, had its case adjourned in advance because it's about to sell 42 Porter Ave.

Some of these properties, like many vacant and abandoned properties in the city, are worth a lot less than it would cost an investor to buy and rehab the property.

Even if an investor can get the house for a song, he might be looking at spending $50,000 to fix up a place that he can't sell for much more than that, so he's now upside down on the so-called investment.

To help address that problem, Molino is working on a local law that would allow the city to offer tax abatements to would-be homeowners who buy distressed homes and fix them up.

"For every $1,000 paid in taxes, that's $1,000 that can't be paid on a mortgage or for rehabilitation," Molino said. "We're already not collecting taxes on it and at that valuation, the amount of taxes you would collect are miniscule, so why not redirect those taxes to rehabilitation."

A vacant home, Molino said, doesn't have a family in it who is bringing their buying power to our community.

"This is a process we really have to vet and decide whether it's appropriate for some of these upside-down properties," Molino said. 

He also thinks there are opportunities to work more with groups such as Habitat for Humanity, Neighborhood Works and Pathstone to help identify people who would be productive homeowners even if they can't afford to buy a home without assistance.

"They have the capital, the overhead, to acquire properties and if they can get them cheaply, they are able to screen for good homeowners and arrange for financing, or they have the financing tools to help people get into homes," Molino said.

The first step, though, is bringing vacant and abandoned homes back into the housing stock, and that's only going to happen to the degree the city is successful in identifying responsible parties and getting them to move the property.

Previously: The problem of distressed properties complex and easy solutions elusive

6 Manhatten Ave.

40 Manhatten Ave.

129 Summit St.

The problem of distressed properties complex and easy solutions elusive

By Howard B. Owens

There are an estimated 53 vacant and abandoned homes in the City of Batavia, which creates a drain on city resources, brings down property values for neighbors and are black holes in local economic growth.

It's a problem.

How we go about solving that problem was the subject of a 45-minute talk Monday evening by City Manager Jason Molino.

Forty-five minutes. It's that complicated of a problem.

The city can't legally seize the properties, except for the nine or so that are falling behind in property taxes, and with banks that hold mortgages leaving the properties in legal limbo, there's no way for the city to enforce code violations.

Fixing the problem will take a mixture of tactics: research to locate responsible title holders; trying to locate mortgage holders and convince them to move the title one way or another; convincing Albany legislators to change state law regarding abandoned properties; and creating programs locally to make upgrading abandoned homes more economically feasible. 

It's relatively easy to identify which homes in the city have been abandoned. They've stopped using city water.

The 53 homes believed to be abandoned have been vacant an average of three and a half years.

On average, they've generated five visits each year while vacant from code enforcement officers, and one police patrol response per year.

The code enforcement efforts cost taxpayers about $8,000 per year.

Often, the code enforcement citations result in no action because the previous owner who occupied the property can't be located. And though a bank or mortgage holder is continuing to pay taxes on the property, the bank hasn't taken title so it can't be held legally accountable for code violations.

Molino said there's no one answer, and no firm reason is really known, as to why banks don't take title on abandoned properties.

It could be that a large institution is dealing with so many mortgages, nobody is even aware a particular property is on its loan rolls or is abandoned. It could be the company is dealing with so many abandoned properties, some fall through the cracks. It could be that a bank is so bogged down by bureaucracy that it takes years to deal with the paperwork of an abandoned property. It could be the bank has no financial incentive, and some disincentives, to deal with the property.

"We really have to dig into that issue," Molino said. "That's one of the things we really need to look into in the coming months to really understand who are all the lending institutions and why are they not moving on title.  ...  We really need to get a good understanding of that, because everything hinges on moving title for these properties."

Once a property is back on the market -- either the bank puts it up for sale or auction or the city somehow obtains title -- it becomes subject to the market forces that determine value and the value of restoration.

Molino spent some time explaining supply and demand as it relates to the local housing market.

Since 1960, Batavia has lost 2,700 residents. At the same time, there has been a slight increase in housing stock. During the same time period, people have become more mobile, thinking nothing of driving 20 or 30 minutes to work or an hour and a half to outlet stores. As time as passed, Batavia's housing stock has also aged.

All of this affects the value of properties, the interest of people in living in a place like Batavia, and the affordability of remodeling and restoration.

While there are economic growth activities in and around the city that could lead to more jobs, a population boom isn't necessarily a given.

"Obviously, we'd love to have another 2,000 or 3,000 people come back in the city and increase the demand for housing stock," Molino said. "Realtors would love it. People would be demanding houses and prices would go up. Truth is, that's probably not practical."

Even if economic growth doesn't bring a few thousand more people to Batavia, economic growth is still vital to increasing the value of homes locally.

"If that median income number doesn't go up, then you're limiting your ability to do things, and we can't do a lot of what we want to do or achieve what we want to achieve," Molino said.

What we need, he says, is enough growth to fill the housing stock we have, and then make it economically viable for owner-occupants or speculators to buy and invest in those properties.

Molino used the example of a house currently valued at $50,000. With upgrades, its value might rise to $75,000, but a modernization and restoration project might cost $45,000. That means the owner would need to sink $95,000 into a property that wouldn't be worth more than $75,000 when ready for occupancy.

That's where "gap financing" tools come into play. There are various government programs available. A single program the city could create -- laws would need to be changed by Albany to make it possible -- would allow for abated taxes on the increase in assessed value.

If the assessment goes up by $25,000, the city would tax only on the original $50,000 for the first eight years after restoration, foregoing tax revenue on that $25,000.

That makes economic sense for the city, Molino said, when you consider that's only $230 annually on a property that may currently be costing the city more than $1,000 annually on code enforcement, law enforcement, and lost fees for a property that is abandoned and vacant. Moreover, if a family lived in that home, it would generate from $10,000 to $20,000 in local buying power.

The state needs to pass legislation that would allow Batavia and other cities to create such a program.

Changesare also needed in the laws giving cities more power to deal with banks who let abandoned homes sit fallow, so to speak.

Some of these homes may not be worth saving, Molino acknowledged. While the city may not want to seek demolition of all abandoned homes, some may need to go. That will be a policy decision for the city to make as it learns more about the abandoned housing stock locally.

In the bigger picture, home values are also affected by things related to quality of life, and those, too, are issues the city is taking steps to address or needs to address as part of strategic planning, Molino said.

"When somebody wants to invest on a street," Molino said, "are they going to want to invest on a street on a street that has potholes? Are they going to want to invest on a street that has sidewalks that are turned up? Are they going to want to invest on a street where the neighbors don't talk with each other? Are they going to want to invest on a street where they've got to pay another $1,500 in flood insurance? Who wants to invest there? They don't."

Among Molino's recommendations is creating a home expo, which would bring together representatives of all the various private, government and nonprofit agencies that offer assistance to owners of distressed properties. There's several programs available, but few people know what they all are. Giving residents that kind of information, Molino said, might spur activity that would lead to better housing stock.

Molino's presentation was video-recorded by Alecia Kaus and will be posted to the city's Web site at a later date.

Authentically Local