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First Posted: 9/29/2014
Luzerne County back-tax auction property buyers sometimes walk away from their purchases because they didn’t realize the extent of repairs required to comply with building codes.
This scenario hurts neighbors and local governments because properties further deteriorate but can’t be auctioned again until two more years of tax delinquency have passed, officials say.
Four municipalities — Pittston, West Pittston, Jenkins Township and Duryea — have teamed up to prevent this problem by creating a special authority to take possession of rundown, eyesore properties slated for auction so they don’t have to risk them ending up in nonproductive hands.
It’s the first “land bank” created in Northeastern Pennsylvania since state officials passed legislation authorizing the option at the end of 2012.
“We need to take a stand and reverse blight in our neighborhoods,” said Pittston city Administrator Joseph Moskovitz. “Land banks are one of the tools in the chest that can be used to combat the problem.”
The four municipalities have created a land bank authority with representatives from each that will start meeting this month to formulate a strategy, officials say.
With approval from Luzerne County and the applicable school district, the authority can acquire properties at free-and-clear judicial sales without competitive bidding using alternative forms of payment, according to the Housing Alliance of Pennsylvania, which has been providing extensive education about the land bank option throughout the state.
Commitments sought
Instead of cash, taxing bodies may accept as compensation a land bank authority’s commitment to fix up or demolish a property, maintain it and market it so it’s returned to the tax rolls, the alliance says.
“In effect, a land bank may ‘trump’ other potential bidders at the judicial sale,” the alliance says.
Tax-distressed properties automatically went to the highest bidder before land banks were permitted, said Elizabeth Hersh, the alliance’s executive director.
“It’s not really looking at who the best owner is or the best use of a property,” she said.
Communities across the state have suffered from properties auctioned to bidders who don’t repair them, she said. In addition to addressing deteriorated structures, land bank authorities can clean up lingering property title issues making them attractive to more buyers, she said.
“One of the purposes is to interrupt the cycle, that downward spiral,” Hersh said.
Land banks also have been established in Philadelphia, Pittsburgh, Harrisburg and three counties — Westmoreland, Dauphin and Venango, she said.
Moskovitz said Pittston and the other three participating municipalities must each come up with funds to demolish or repair properties within their respective borders, though he expects the authority to seek funding to create a shared pot of money for future projects.
Reducing eyesores
Pittston Redevelopment Authority Vice Chairman Mike Lombardo supports the concept, saying eyesore properties stuck in tax sale limbo devalue neighboring properties and attract crime. The city often ends up cutting grass and weeds because the owners of rundown properties ignore clean-up directives, he said.
“We want to have the ability to not go and play that game on these properties,” Lombardo said.
The land bank authority would focus on “the worst of the worst” properties — not ones that are in good condition and likely to be kept in productive use by tax sale buyers, Lombardo said.
Moskovitz said the goal is to intervene when the private sector isn’t addressing a problem, as opposed to competing with the private sector.
“We don’t want to interfere with the private market. I’d prefer the private sector take care of all properties, but it isn’t,” Moskovitz said.
Jenkins Township Supervisor Stanley Rovinski said residents expect municipal officials to do something about eyesore properties. The program also will create more opportunities for new homes in established neighborhoods, he said.
“Good buildable lots are getting scarcer and scarcer,” Rovinski said.