Its stone veneer siding is hideous to contemplate in the afternoon shadow cast over it by the bell tower of the Redeemer Lutheran Church across the street, but this blighted property at 29 Rogers Street in Kingston has been marked for redemption by the Kingston City Land Bank (KCLB).
Behind a wrought-iron railing at the top of a short flight of crumbling concrete stairs, land-bank board chair Daniel Kanter spoke to supporters, allies, and the curious who had gathered along the sidewalk out front. Kingston mayor Steve Noble and state senator Michelle Hinchey were among the attendees.
“We rolled up our sleeves and got to work rehabbing the first round of zombie properties made available to us,” Katner said, using the loose slang word for blighted properties saddled with back taxes whose titles exist in a real-estate limbo. “We completed our first three rehabs at the end of 2021, and our first three families have now been living the dream of home ownership for nearly a year.”
Combating blight and getting neglected properties ready for potential homeowners is the mission of the KCLB. The non-profit was established four years ago this month by Kingston’s Common Council and the Empire State Development Corporation as a means to move tax-foreclosed properties from city ownership back into the housing market.
A partnership between New York State’s division of Homes and Community Renewal (HCR) and the Community Preservation Corporation (CPC) has made that mission easier.
“The CPC is a not-for-profit mortgage bank,” explained CPC president Sadie McKeown. “We’re funded with private-sector capital that we take on and invest in neighborhoods in ways that banks typically find very difficult.” CPC is investing $40 million to provide opportunities for seed developers and small developments. The Legacy City Access Program was born when CPC funds were added to capital from state agencies and other partners. The program will steer millions of dollars to combat neighborhood blight and transform previously lost causes, particularly vacant or distressed properties.
Kingston first in state
The Kingston City Land Bank is the first land bank in the state to close on financing through Legacy Cities. Similar awards will be coming down the pipeline for eleven more land banks statewide.
The CPC provided financing in the amount of $866,661 to the Kingston City Land Bank. HCR provided another $600,000.
“As everyone knows, as with many communities across the Hudson Valley, Kingston needs affordable housing,” said HCR commissioner RuthAnne Visnauskas. “Home prices here have accelerated in a way that has made it unaffordable for so many who are already here as well as for people who want to move here.”
The funds from the Legacy City Access Program will pay for the complete rehabilitation of four foreclosed homes in Kingston.
“We purchased them for the full price of back taxes,” said Mike Gilliard, executive director of the KCLB. “Between the purchase price and the cost of the rehab, because they’re not cheap to rehab, we brought some money to the table, too. The cost to rebuild them, it gets expensive, and we sell them for much less than it costs us. So we need these partners and private lenders.”
The KCLB is a public authority which can accept tax-deductible donations, a benefit for the charitably minded.
“In July of 2020 we purchased five properties from the City of Kingston that they had taken through foreclosure,” says Gilliard, “and began a pilot program to begin rehabbing and selling these properties as affordable homes.”
Set up for success
Affordability can be a highly relative term. “We’re not interested, nor do we believe it’s the right thing to do, to work with a non-affordable mortgage provider,” says Gilliard. “The interest rate is always a fixed rate, and there are many programs available to pay for down payments and closing costs assistance through the state. Dovetailing those together, it really sets people up for success.”
Gilliard claimed that everyone who has purchased a home from the KCLB so far has found that their household expenses dropped by nearly half due to the way the program was underwritten.
This talking point reveals just as much about the inherent disadvantage of renting as it does about the habits of some lenders to prey on potential buyers.
“Just to set expectations, it is not an easy process,” says Gilliard. “Becoming a first-time homeowner, not everyone is in a position to qualify. There is the requirement to purchase a home mortgage, for example. But we work with interested parties, household families, to submit an application and go through the application process. And then the families are selected via lottery entirely independent of our decision-making authority. We don’t choose the families.”
While selecting potential homeowners via a lottery may have a dystopian flavor, making the choice blind introduces a sort of equity to the process.
“We’ve really been trying to prioritize expanding homeownership for households of color,” explained Visnauskas. “People who have historically been shut out of the housing-market system, not just in New York State but across the country, and first-time buyers struggling to find a place they can afford.”
The amount of houses the KCLB brings back to the market isn’t anywhere near enough to solve the housing crisis in Kingston, executive director Gilliard concedes. But KCLB feels it’s done a good job for the people it has helped. Applicants qualify based on household size and household income.
“The best way to get involved in our work and become aware of a house coming up for sale is to join our mailing list at the KCLB website,” says Gilliard. “We will send out notifications when homes are for sale and it goes out to everyone in the general public. Everyone’s invited to it.”
Besides the property at 29 Rogers, three more will be under renovation at 169 Hurley Avenue, 237 East Union Street and 63 German Street.
The foreclosed properties are run down and long neglected. Maeda Construction, a Hudson Valley minority contractor, will install new kitchens, baths, roof, flooring, insulation, windows and doors. It will upgrade structural, plumbing and electrical systems.
Goldstein Hall will provide legal services. Counseling services will be provided by Pathstone Community Improvement of Newburgh.
“It’s exactly programs like this and the funding that we’re able to reallocate here at the state level,” said state senator Hinchey, “for that will be a game-changer in the lives of so many families across our communities.”