The City of Rochester is thinking twice about selling its tax liens to an outside company.
Since 2009, the city has been selling its liens in bulk to American Tax Funding. The idea is to get the city more money than it could collect on its own and let another company worry about collections and sale of the properties. The city did keep some of the properties for targeted development.
Since 2009, the city has sold 20,948 liens to ATF and collected nearly $21 million. The city was paid between 43 and 49 cents on the dollar. Since ATF took over, the city’s delinquency collection rate has risen from 44 to 55 percent.
The city is now looking for a consultant to assess how it’s going and offer alternatives. There have been complaints from neighborhood groups the ATF-owned properties are languishing. The vacant houses are in limbo too long, they say. In addition, some property owners are not happy with ATF’s payment plans. It’s possible the consultant will recommend the city continue its relationship with ATF.
Those types of complaints led Syracuse to stop doing business with ATF, which strongly denied it let properties languish. The Post-Standard reported last year:
The company sells some properties over the Internet to buyers as far away as Germany, who may or may not be prepared to address the building code violations, old water bills or additional unpaid taxes that come with the houses, city officials say.
In other cases, ATF has allowed abandoned properties to languish and fall further into disrepair because the houses have minimal value and would be difficult for the company to sell, said Tom Babilon, an assistant corporation counsel (in Syracuse).
“Vacant and substandard housing is one of the priority issues that we are trying to remediate,” Mayor Stephanie Miner said. “And ATF has not helped us redevelop or renovate our neighborhoods and our housing stock at all.”
Marini, the CEO of American Tax Funding, said the company owns $100 million worth of tax liens all across the country. Syracuse is the only city that has picked a fight with his company, and he’s not sure why.
ATF’s profit motive gives it a strong incentive to improve conditions in neighborhoods where it owns liens and properties, because that helps boost the value of company assets, he said.
“How would ATF gain by allowing these properties to languish?” he asked. “A blighted neighborhood impacts us as badly as it does everyone else.”
That article quoted Rochester officials saying they’re happy with ATF. But since then, neighborhood groups have gotten more vocal about ATF-controlled properties. The entire situation shows how difficult it is for declining cities to deal with abandoned properties and homeowners struggling to make payments.
Links of the Day:
- Now, the other side. The fired boss of the crime lab filed a notice to sue. It’s full of details that make Maggie Brooks, Mike Green and Sandra Doorley look bad.
- The candidates for the 27th District congressional seat are from Erie County, but the district stretches to Canandaigua. Residents of small towns want to know what Chris Collins and Kathy Hochul will do for them.
- Half of all jobs in the United States pay less than $35,000.
- The pink slime scare was a hallmark of bad, sensational reporting.
- The post-goal celebrations of Abby Wambach and company are annoying opponents.
- Given what we now know about football’s impact on players, can the sport be fixed?
The NPR article hits the nail on the head. This country is facing a big problem. The jobs that are being created are not sustainable for families. As the Rochester area continues to laud and heap tax dollars on call centers, they fail to realize that these jobs simply add to the working poor. While these workers might not fall below the poverty line, they do live close to it. They pay an overly high percentage of their income for rent and utilities. Everyone says college is the answer, and I agree that in many ways it is. However, with the costs of higher education soaring it adds another layer to the problem. Those seeking to better their life must take on massive student loan debt which will cripple them financially even once they have achieved a better job status.
The passage of the long-sought New York landbanking law last year — which a prominent national land bank expert considers the “gold standard” for state land bank programs — gives New York municipalities with vacant property problems a good opportunity to step back and look at alternatives to auctions of properties with tax liens. Under the new legislation, Buffalo & Erie County, and Syracuse & Onondaga County established land banks this year, and Rochester should consider doing the same. The existence now in Syracuse of that credible alternative to property auctions may be one of the reasons that city is now speaking out against the company that is auctioning property with unpaid liens.
Mayor Miner’s comments are telling. Relying on auctions as the primary tool for handling property with uncollectable tax liens is inherently deficient — yielding just the kinds of results that Syracuse leaders say they neither want nor like. And that may be the case regardless of who handles the auctions — the City, County, or an outside contractor like ATF.
For more on the inherent problems with auctions, and why land banks present a better alternative in many cases, may I humbly recommend my recent cover story in Buffalo’s alt-weekly, Artvoice: http://artvoice.com/issues/v11n24/cover_story
Auctioning distressed properties to the highest bidder seems, at first glance, both fairest and revenue-maximizing. But as the great observations from Syracuse leaders quoted above suggest, the cycle that all too often results is properties churning through the system, losing value and increasing blight each time through. Eventually, a property becomes so dilapidated and devalued that, for safety and/or economic reasons, there is no alternative to demolition. A property in that downward spiral can blight a block, and a block can blight a neighborhood.
Syracuse is both right and smart to re-evaluate their arrangement with ATF. You’ll find lots of folks in Rochester who would love to follow their lead.
Thanks for the insight!
i am not surprised maggie brooks fired JAS, from what i read in the news she was running the crime lab professionally and not a tool of the DAs office. saggy maggie should have stayed out of this one.