Vacant Property Working Group (VPWG)

Pittsburgh Community Reinvestment Group1901Centre Avenue, Suite 200

Pittsburgh, PA 15219(412) 391-6732

Staff Contact: Bethany E. Davidson – 412.391.6732 x201 or bdavidson@pcrg.org

Property Acquisition, Land Reclamation Tools and the

City of Pittsburgh Land Reserve

Overview

• Brief History of Land Recycling

• Who / What is VPWG?

• State of Vacancy in City of Pittsburgh

• Land Acquisition Tools

• Land Reclamation Tools

• Question and Answer

Definitions

• Parcel: includes structures and lots• Vacant and Abandoned have different

meanings:– Vacant-No one is currently residing in the structure

(vacation home can be vacant, eg)– Abandoned-the owner has walked away from their

interest in the property • There are many indicators of blight, USPS/gas service shutoffs and unpaid

taxes are some of the most commonly used)

• Note: There is no common definition for blight.

Vacancy in the City of Pgh

• 112,918 Total Residential Parcels in the City• ~25-27,000 Vacant Residential Parcels in the

City (23.3%) (OPENPGH, 2011)

• 84,989 Single Family Homes in the City• ~10,000 (12%) not receiving mail delivery due to

vacancy (national avg: 10%)(PNCIS 2009)

• Vacant lots and properties are concentrated in several neighborhoods

Provided by the Community Information System (CIS)

VPWGVacant Property Working Group

Advance policy and programmatic solutions to blight and abandonment issues in the Pittsburgh

urban core**• Formed in 1988• Staffed for 12 years through CDBG, housed at

PCRG • Open table to anyone in the City and County• Made up of CDCs and CBOs, representatives of

elected offices & government agencies, partner nonprofits

Current Issues• Land Acquisition

– Continuous Improvement and coordination of Treasurer’s Sale Process and the Land Reserve, move towards scalable system

• Lien Portfolios (GLS & Jordan Tax Service)• State Legislation• Local Policy • Local Programs

– Demolitions and Greening– Planning

• Access to Data / Parcel Information

Methods of Acquisition• Second Class City Treasurer’s Sale

– City of Pittsburgh Property Reserve [PPR]– Side Yard Sales Program

• Bank / Real Estate Owned (REO) properties– PCRG Partnerships with local & national lenders– GSE-gov’t sponsored entity- portfolios (Fannie Mae,

Freddie Mac, HUD)

• Conservatorship• Sheriff’s Sale• Direct Purchase (from private entity, City,

URA, eg)• Purchase of Bank Note

Pittsburgh Property Reserve

PPR History• Group studied Cleveland model and proposed a

cost effective method of land acquisition of City of Pittsburgh 501c3 community based groups

• Reserve established by Council Bill 402 of 1998• Utilizes Tax Foreclosure process (Treasurer’s Sale-

T/S) to recycle abandoned properties• 3TB – Three (Property) Taxing Bodies agreement

– City of Pittsburgh– Allegheny County– Pittsburgh Public Schools

• Note: T/S’ main goal is to collect taxes, not to recycle land

PPR – What is it?• Tool to recycle land affordably in areas:

– Butfor the cost of land acquisition, revitalization might otherwise occur

– Market is weak– Property is otherwise ‘underwater’ (ie encumbrances are

in excess $amount than the property is worth)

• Intent is tax collection, not land foreclosure mechanism

• Exclusive to non-profit community based organizations

• Virtual Reserve (‘bank’) with a 300 property maximum cap at any one time

PPR-Advantages• Partnership with City of Pittsburgh:• Utilize State-legislated legal process to acquire

land affordably which produces full clear (‘clean’) title at the end

• City Departments take onus of doing the legal and financial work

• Properties are available at end of process for approximately $3,000 each– City can only recover 3rd party costs (not internal

staff time, eg)

PPR Disadvantages

• Takes Time – properties identified 5 months before sale and

are not ‘clear’ until at least 12 months post-sale

• Many Steps

• Numerous ‘loops’ where a parcel can ‘fall out’ of the recycling process

General PPRUsage Provisions

• CDC must:– Have a redevelopment plan in place, including proof

of (current or future) ability to finance and complete project

– Adhere to designated process and all timelines– Remove properties from reserve in designated time (2

or 5 years)– If necessary, submit a formal request for a time

extension (properties with clear title)

• 1 year restriction on utilizing Reserve if in Default of provisions– Will receive 30 day default notification from City

PPR Basic (In)EligibilityEligible

• 1+Years Tax Delinquent

• Vacant

Ineligible• Tax Payment Plan• Sheriff’s Sale/

Foreclosure• Bankruptcy• Late Payment in Full• Already in T/S Process

– Private Bidder– Side Yard Sale

Property Research/Due Diligence

Property Information

• LocationStreet addressWardLot/block number

• Owner(s) of record

• Vacancy statusMust be vacant

• Tax delinquencyAt least 1+ prior ys delinquent

• Liens or other foreclosure activity

Data Sources• County Real Estate

– Property information– County tax delinquency

• City of Pittsburgh Finance– City tax delinquency– Ineligibility Criteria

• County Office of Court Records– Foreclosure activity– Other judgments and claims

• PNCIS– Gas shutoffs– USPS service

• Department of City Planning– SNAP Data– Open Space Database

• PCRG– GLS Lien Data

I. Property Information Request1. Electronic request submitted to PCRG

• Address• Ward, Lot/Block• Owner• Vacancy status• Lot/Structure

2. Information retrieved from City Finance• Confirm tax delinquency (length, amount)• Bankruptcy/payment plans• Scheduled for Treasurer’s or Sherriff's Sale

3. Eligibility for Treasurer’s Sale confirmed to community group

II. Application and SelectionProject Feasibility Application

– Strategic (not speculative) development plan– Development and financing plan (commitments not

necessary)– Due diligence (URA reviews application)– Community/political support (elected representatives)

Major Partners– Urban Redevelopment Authority– City of Pittsburgh Finance Department, Real Estate

Division– Pittsburgh Community Reinvestment Group– Allegheny County Dept. of Economic Development

III. Treasurer’s Sale & Redemption Period

Properties identified for sale– URA approval– No redemption or payment plan

Treasurer’s Sale– Public bids (no clear title)

90 day Redemption Period– Opportunity for CDC to request revenue

properties

IV. Deposit and Promissory

Vacant LotsCost :$100 plus 3rd

party fees($200 Deposit +$400

Promissory)

Up to 5 years in Reserve

Structures

Cost: $1000 plus 3rd party fees

($200 Deposit + $800 Promissory)

Up to 2 years in Reserve

3rd party costs:• Legal notification (mailings and public notices)• Title search and clearing costs• Maintenance and inspections

V. Clearing Title & Settlement

Title clearing procedures• Petition to quiet title• Lienholder period to answer

Satisfaction of liens with buyback funds

Court Authorized Clear Title

Settlement (Closing Eligible, but not required)

Land Reserve Outcomes• Approximately 300 Properties fully recycled as of 12/31/2008• 178 Properties currently in reserve, pending development• 35 properties recycled since January 1, 2008• 75 Parcel’s Liens currently being bought back all with

redevelopment plans• 23 parcels through September’s Treasurer’s Sale• 20 parcels through December 2008 Treasurer’s Sale• Planning for April Sale 2009

Other T/S Acquisition Issues• Inclusion of City owned property

– Three Taxing Body guidelines

• Inclusion of occupied property– Relocation costs– VPWG policy agenda item

• Property reserve and for-profit developers– CDC must split profits with City– ‘Flipping’ properties [Immediate ReSale]– Developer and financing commitments

Acquisition Tool:Conservatorship

& other State Laws

Acquisition Tool:REO Portfolios

Acquisition Tool:Side Yard Sale

Reclamation Tool:ReddUpGreenUp

Taking Care of Business

Reclamation Tool:Garden Waiver / Lease

Question / Answer

Thank You