The Real Deal New York

Why thousands of New Yorkers’ property values are depressed by a total of $53M

IDC takes aim at banks over foreclosed properties in NYC with new fee
December 17, 2017 04:00PM

(Credit left to right: respres and VAs234/Wikimedia Commons)

A new bill seeks to penalize financial institutions that fail to maintain foreclosed properties to the tune of $500 in fees per day based on report examining the state of foreclosed homes in New York City.

The bill, to be put forward by Sen. Jeffrey Klein (D-Bronx/Westchester), came out of a Independent Democratic Conference report on New York’s foreclosed properties.

According to the New York Post, the report found that about a third of the foreclosed properties in the city have cumulative total of more than 2,000 violations with government agencies over issues ranging from broken windows and squatters, to exposed wiring and collapsed roofs. These un-maintained foreclosed homes in New York depress surrounding property values of approximately 8,000 New Yorkers by an estimated total of $53 million.

Citing research, the Post finds that property values drop by 1.3 percent if a foreclosed property is located within a 300-feet. According to the IDC report, the largest concentration of depreciation caused by foreclosed properties in constant states of disrepair occur in communities of color and are owned by major financial institutions.

“It’s a huge problem,” Klein told the Post. “The banks … were very quick to write these mortgages, and quick to foreclose on these properties, and now they don’t want to have to do what the law mandates them to do: maintain these properties adequately.”

A spokeswoman for the New York Bankers Association told the Post their member take foreclosure laws “very seriously.”

[NYP] — Erin Hudson