The state of New York is set to give an additional $20 million to the state’s land banks as part of a continuing effort to fight neighborhood blight throughout the state, the office of New York Attorney General Eric Schneiderman announced this week.
According to Schneiderman’s office, the funding will come from the state’s settlements with Goldman Sachs and Morgan Stanley, both of which agreed to multi-billion dollar mortgage bond settlements earlier this year.
In April, Goldman Sachs agreed to a $5 billion settlement over toxic mortgage bonds. Part of that settlement included $1.8 billion in consumer relief and a payout of $190 million to the state of New York.
While in February, Morgan Stanley agreed to a $3.2 billion settlement over its “deceptive” mortgage bond practices in the run-up to the financial crisis. Included in that settlement was a pledge to provide $400 million in consumer relief for New York residents and pay $150 million to the state of New York.
Now, New York is ready to put some of that money to use.
According to Schneiderman’s office, the funding will be administered by Local Initiatives Support Corporation and Enterprise Community Partners, and will be given to New York State land banks that are working to protect homeowners and neighborhoods across the state by acquiring blighted homes and transforming them into community assets.
Schneiderman’s office said the money will be offered through a “competitive request for proposals” to the state’s original 10 land banks, as well as the eight land banks which recently formed and are located primarily in rural communities throughout upstate New York.
Schneiderman’s office said that it has given more than $33 million to land banks since 2013.
The land banks used that money to reclaim 1,995 properties from abandonment and blight. The land banks also returned 701 properties to the market and put them back in productive use, and demolished 409 unstable properties.
“By stabilizing, renovating, or demolishing formerly blighted properties, the New York State land banks are saving an estimated $19 million in property value for surrounding homes,” Schneiderman’s office said.
“New York’s land banks have successfully empowered communities across the state to rebuild and revitalize neighborhoods hit hard by the foreclosure crisis,” said Schneiderman said. “I’m proud that the funding my office helped secure this year in settlements with Morgan Stanley and Goldman Sachs will now make it possible to support nearly double the number of land banks across the state, and deliver much-needed support to homeowners in New York.”