NY Rising’s Acquisition Program in question [Guest Author]

Anthony,

Long time reader, first time poster. Thank you for agreeing to post the following information that I hope your readers will find valuable.

Last evening I approached our City Council and the city’s management with concerns I have with NY Rising’s Acquisition program.  For those of you who are unaware, this program is in the process of purchasing 60+ properties in the City of Long Beach. According to their website (http://stormrecovery.ny.gov/ny-rising-buyout-and-acquisition-programs) the “properties purchased as acquisitions will be eligible for redevelopment in the future in a resilient manner to protect future occupants of this property.  The State in consultation with local officials will determine the development of acquired areas to ensure that the properties best serve the future goals of the community.  In some cases, the properties will remain undeveloped and be transformed into parks or other non-residential uses, while others will be redeveloped in a resilient manner.”

I brought up various issues and concerns with the program as I detail below.  I was told last night concerning these properties that “the rules are the state will bid them out to developers to be developed as resilient homes at market rate, that is what we (the city) have been told, and your concerns about low income housing should not be a realistic concern, and any concern about that property laying fallow and not being on the tax roll should not be a concern it is something we are watching quite closely.”

I was glad that our city representatives were aware of this program and had some of the same concerns as I did and were able to share their thoughts on it.

Since this program is being administered by NY Rising I do have reason to believe that what the state told the city will be modified/changed/altered/reshaped/revised/tweaked/transformed/reworked/adjusted/converted/mutated as many NY Rising Programs have been.  In fact yesterday afternoon the city itself posted on their Facebook page their concerns with the NY Rising program including the “Intermediate rule and procedural changes by NY Rising”, while the city tried last night to allay my concerns with the program as they further explained how it now exists there is no definitive way to assure me that NY Rising will not modify/change/alter/reshape/revise/tweak/transform/rework/adjust/convert/mutate the rules of this program as well.

I have attached a map I obtained from the NY Rising Funding Portal (http://stormrecovery.ny.gov/funding-portal) which details the location of the properties in the NY Rising Acquisition Program.  I have also attached a list of 11 properties (as of Jan 23) that have been closed on and their sale price. These real estate transactions conducted by the state are public record and were provided in response to a FOIL request.

While my hope is that these properties will be sold for market value, I think the city should remain vigilant with this program and make sure that it does not morph into non market value housing options.

Among the questions I raised last evening were

  • What is the status of the GOSR’s consultation with our local officials regarding these properties and is there any timeline for decisions and actual development?
  • What impact will the loss of these 60 properties from the city’s tax rolls have on future budgets and services?
  • Who is responsible for maintaining these properties?I know for a fact that one of them has not had snow removal done this year.  Will they become eyesores with overgrown weeds this summer or is there a plan for maintenance and cleaning, and at whose expense?
  • Will these properties be developed as market value housing or are plans under way to develop these as “Low/Moderate/Insert Buzzword/Workfare/ Income” housing
  • What impact on the property values will the “dumping” of these 60 properties onto the sale market have?
  • Since these properties are owned by the state, are they required to follow our zoning laws or will they be allowed to build 2 family or if space on the property allows, a 3 family building?

Over the last 2 years, we have all heard stories of our neighbors who have sunk their life savings into rebuilding not only their homes but our community, I wonder if the same level of investment would have taken place knowing that the property next/beside/across to them was part of this program and what I see as the uncertainty surrounding it.

Unfortunately this shows another level of NY Rising’s failure. They purchased a 30X60 lot in the West End for over $504,000 to help one family move out of our community.   Yet the same family one door down is forced to jump through hoops to get a portion of that amount to stay and help rebuild our community.  Can anyone imagine what kind of house could have been built on that lot for $500,000? Just imagine what you could build for even a fraction of that amount.

GOSRFOIL NYRFundingMap(Click on map to enlarge)

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25 thoughts on “NY Rising’s Acquisition Program in question [Guest Author]”

  1. Great post, I believe the majority of people in LB don’t have the slightest idea about this.

    On a side note, that map is just another confirmation on the area south of Park and east of Grand being a completely different planet value wise.

  2. Well said. As the State tries to figure out what they will do with these properties our city is denied all of the school and property taxes because the state doesn’t pay local taxes. And don’t think for one second that any developer who buys that land won’t try and cram the maximum number of families, stories and square footage onto that property. These guys are all shady – we must be vigilant to protect our community from over development.

  3. Thanks for the research and thanks to Anthony for posting. Long Beach doesn’t need any “affordable” housing. Hopefully these get developed as market rate.

  4. Kevin, great post and thanks for bringing this up at the City Council meeting. Your concern was very well stated. And, the City’s response was equally well stated…a clear commitment to fight below-market pricing.

    This topic probably requires a follow-up a few months from now, to see what really occurs.

  5. I agree with many of the sentiments written here. However, the author makes a pretty obvious mistake when comparing acquisition versus rebuilding. Namely, about 350k of the 500k laid out by the state to purchase the land will be recouped when the lot is sold. 150k is less than the average cost to elevate a home. Therefore, acquisition makes sense when the homeowner doesn’t want to stay in the community. In addition, although the author is not as blatant as other commenters on this blog, I do feel that much of his concern stems from a fear of affordable housing in long beach.

  6. @the real captain obvious
    The $500k you mention does not include the cost to the state for demolition of the property, which according to the latest bids received by NY Rising for the demolition of properties in this program average $30k to $40k (http://stormrecovery.ny.gov/sites/default/files/uploads/bid_tabulation.pdf)
    [Shout out to NY Rising for limiting demolition costs to people wanting to rebuild to $15K! Want to stay? we spend $15K, want to leave? we spend twice as much??????]

    When you add in the normal costs for property acquisition along with the lost taxes to the city, county and school. I feel it safe to say the actual cost to the taxpayer for this property will be closer to $600K, probably even higher depending on how long development takes. Along with the loss of property taxes with this property being fallow there is also a loss of the spending power of the occupants on the local businesses. Compound this with the intangible losses the visual and spiritual degradation caused to the the community with the empty lot being a constant presence on the block and this program looks worse and worse with each word I write

    And if you actually believe a developer is going to pay $350K for a 30X60 property in the west end when the state is offering up approx 25 identical parcels in the same neighborhood, you are sadly mistaken. The developer is well aware that the property at 350K plus construction and carrying costs will not be a viable business model especially since other developers will be flooding the market with similar houses under the same program.

    And it appears you missed my last sentence when I asked what kind of house they could have built for that person with the $500K, hell for $500K most of us could have built a house in Long Beach along with buying a summer/winter house upstate in the mountains.

    PS. I have no issue with affordable housing. In fact all of my family, neighbors and friends live in affordable housing. We worked hard, saved our money, cut out frivolous expenses and bought houses that we can afford. I do have an issue with the state coming into neighborhoods under the guise of what they perceive as fairness and implementing programs that will lead to the devaluation of my family’s as well as my friend’s and neighbor’s affordable housing. And while that in and of itself is a relevant topic worthy of discussion, I ask that you try to keep this thread simply on the aspects of this NY Rising program as described.

  7. thank you for this post I had no idea they were buying houses I would have gladly sold mine instead of going through the tortures of the damn to rebuild – for those prices my mortgage would have been paid and then some!

  8. well said! I wish I had known that there was a possibility of $500k buyout on a 30×60 lot. & amen to preserving our property values- Long Beach has come so far from the concentrated dumping ground for undesirable housing units it was in decades past. Whatever development happens needs to be of a nature that keeps the community how it is, not a cash out project for some contractor who will cram as many people into a lot as s/he can get away with regardless of how it affects the people that live here already.

  9. Yes, we have to be vigilant. There are plenty of contractors who take every opportunity when no one is watching to pack people in and if they retain ownership as landlords, are absentee about it allowing properties to be poorly maintained and tenant conduct that no one wants to live near.

  10. If HUD decides they were over paid or never had duplication of benefits deducted they will go after the homeowner for the money back. This might take years but they will do it and by them the money is gone. The whole situation stinks.

  11. Stay vigilant LB cause this city council with its real estate ties, shady behavior and cozy relationship with Cuomo will sell us out in a heartbeat. And before you know it you will have multifamily section 8 crap living next door, without enough parking. As a posted mentioned above I am ok with affordable housing as long as it’s not the “government cheese hand out type” that’s gonna kill the property values of my neighbors.

  12. Yes watch out for the welfare section 8 scam coming to LB. No democrat is going to allow land to go vacant. They need to reward their minority storm troopers. This is a modern day version of blockbusting. The state is not going to allow white people to get a buyout benefit unless it is a long term scheme to give away free housing to blacks and illegals.

  13. An update on this program: these properties are being auctioned off by the state through Paramount Realty (http://www.prusa.com). The house on California that the state purchased for $504K is listed with a minimum bid of $117K and the person who purchases the property is eligible for up $350K for repairs and improvement. Can anyone explain how this makes any sense? Can the person who sold the property but it back?

  14. What is your source that houses purchased at the “Acquisition Auction” are eligible for additional money for repairs and improvements? At least as far as I am aware, to be eligible for FEMA or NY Rising Money, you had to use the home as your primary residence on the date of the storm. Subsequent purchasers are not eligible for such aid since the cost of repairs is factored into the purchase price, i.e., you purchase a damaged property at below market value (if the house were not damaged) with the expectation that you will shoulder the costs of repair or reconstruction. Is there another program that provides this money? Is this an SBA loan?

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