Long Island has faced a housing crisis for years, if not decades. Rapidly accelerating prices in the early 2000s caused a housing bubble, which led to a market crash in 2008 and 2009. As a result, many homes were foreclosed on, particularly in the Village of Freeport. Then came Hurricane Sandy in 2012, which destroyed hundreds of homes throughout the community.
Now, a number of those homes lie abandoned, shells of their former selves. They’re called “zombie homes.”
“If you remember in those times before 2005, houses that should have been sold for $200,000 were selling for $400,000,” said Mimi Pierre-Johnson, of the Mutual Housing Association of New York, a non-profit organization. “Banks were targeting black and brown communities, betting against them.”
State Sen. John Brooks, a Democrat from Seaford, and Nassau County Legislator Kevan Abrahams, a Democrat from Freeport, co-hosted a housing rights and advocacy seminar at the Freeport Recreation Center on Sept. 25. Nassau County housing experts met with Freeporters and members of surrounding communities to discuss housing issues, including the proliferation of zombie homes and the lack of affordable housing.
“Nassau County is in a housing crisis,” said Michael Rabb, of the Nassau County Office of Housing and Community Development.
Zombie homes, in particular, are a problem. These unkempt houses wreak havoc on neighborhoods and lower property values, experts say. According to Rabb, the county has a land bank, a nonprofit organization with cash to buy foreclosed and zombie homes, but interested buyers are needed to buy the properties, and banks must be willing to sell them.
There are a number of families who consider buying distressed properties, but then back out. “One of the problems that most of these families don’t realize: You’re not buying a home; you’re buying a piece of land with a shell,” Rabb said. “That shell might be so expensive to bring back to livable that the average young family that would want to live in it can’t do it on their own.”
According to Rabb, buying a zombie home can be risky. The job of the land bank, he said, is to take title of the property while it’s a shell, supervise its redevelopment and make it livable. The property can then be sold later on.
“Buying the zombie house is not for everybody,” Rabb said, “because if you’re not knowledgeable on construction, budget control, and I got news for you, if you want to flip it instead of live in it, you have to be prepared to pay the taxes on that property until you sell it or rent it.”
Buying a zombie home that was damaged during Hurricane Sandy can be especially risky from a financial standpoint, because often those houses must be elevated to meet the requirements of the Federal Emergency Management Agency. Any home that suffered damage greater than 50 percent of its appraised value in Sandy must be raised above the flood plain, according to agency requirements.
Last December, the state enacted a law that requires banks to maintain abandoned properties or face a $500-a-day fine. The law also requires foreclosed properties to be auctioned off within 90 days of a foreclosure judgment. And the state must establish an electronic registry of abandoned properties.
In Freeport, the responsibility of dealing with zombie homes falls to the village. According to Mayor Robert Kennedy, the village recently received $152,000 in grants from the state attorney general’s office, which are being overseen by the nonprofit Local Initiatives Support Corporation, to address abandoned houses. The grants are the result of a $3.2 billion settlement between New York state and Morgan Stanley in February 2016.
According to Kennedy, the majority of zombie homes in Freeport are the result of Sandy. The village has boarded up some of theme, cut the grass and shoveled snow around them in winter. With the new grant funding, the village will be able to hire a new Building Department inspector to deal with zombie homes and prosecute owners who violate the law. The village now inspects the homes and issues reports on them each week.
“The village has to inspect every one of those zombie homes,” Kennedy said. “We then will send a contractor to try to maintain it.”
According to the mayor, owners of zombie homes are charged for maintenance, expect when the state owns the home. In that case, the state pays no taxes, leaving the village to foot the bill.