Town News

Town to make banks help with ‘zombie’ homes and businesses

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The property at 351 Hempstead Turnpike is one of the parcels that town officials pointed to that are driving down home values in Elmont.
The property at 351 Hempstead Turnpike is one of the parcels that town officials pointed to that are driving down home values in Elmont.
Christina Daly/Herald

The Town of Hempstead is strengthening its strategy to deal with so-called “zombie” properties in the area. Town officials announced on June 16 a new bill that would require banks to put deposits on businesses that become vacant properties.

The town will soon vote on a measure that would require a bank to pay a $35,000 fee when a business goes into foreclosure. The town would use the money to maintain the appearance of the business, including landscaping, removing graffiti, fixing broken windows and other cosmetic upkeep. Many homes and businesses that fall into foreclosure become eyesores due to the lack of upkeep, and drive surrounding property values down. This has become a major issue in Elmont, where many businesses along Hempstead Turnpike have fallen into disrepair.

If a bank failed to comply with the new law, it would be fined between $500 and $1,500 per day until a payment was made.

“It is not acceptable for lenders to reap the profits on mortgages and then turn their backs on neighbors by failing to maintain business properties once they foreclose on them,” Hempstead Town Supervisor Anthony Santino said at a press conference on June 16. “The town board will consider legislation that makes banks and other lenders pay for upkeep on their foreclosed businesses … it will keep our downtowns vibrant and attractive while helping us combat blight.”

Last month, the town board took similar action against foreclosed homes. It passed a law requiring banks to pay a $25,000 deposit for upkeep in an effort to encourage them to sell properties at a reasonable rate and maintain home values in the area. The average home in Elmont is valued at $357,200, according to real estate website Zillow. Homes in the neighboring village of Floral Park are nearly $200,000 higher.

“It’s time for banks to put people ahead of profits and be better neighbors,” Santino said. “We’ll be working to protect communities from the blight of homes that have been abandoned.”

Santino said that the $25,000 security fee would give banks incentive to not only maintain foreclosed properties, but to move quickly to sell the homes and turn them over to new owners. He also explained that with the fee, taxpayers would not have to foot the bill upfront. Currently, when the town does the upkeep work on a vacant home, it is added to the property’s tax bill, and the tab is often not paid for many years.

Santino, along with councilmen Ed Ambrosino and Anthony D’Esposito, referred to several businesses and homes in Elmont, West Hempstead, Seaford and Oceanside that would benefit from the passage of the law.

“I want to commend you, Supervisor Santino, on a common-sense initiative that is pro-business and pro-community,” Ambrosino said. “In essence, what it does is impose an obligation on the banks to do what they’re supposed to do, to keep properties in repair, and there’s a business incentive for them to expedite the foreclosure proceedings while keeping up the value of the surrounding neighborhood. It’s a serious problem.”