City of New Haven image
Sample land-bank deal as envisioned by city gov't.
Thomas Breen photo
City dev officials Dean Mack, Mike Piscitelli, and Mark Wilson on Monday.
A new affordable-housing-focused nonprofit that could compete with real estate speculators on the open market took another step closer towards coming into being — as alders endorsed creating a quasi-public “land bank” charged with buying, fixing up, and selling blighted properties before megalandlords get there first.
During Monday night’s latest Board of Alders Finance Committee meeting in the Aldermanic Chamber on the second floor of City Hall, committee alders voted unanimously in support of the proposal, in the form of an amended ordinance establishing the New Haven Land Bank Authority.
The proposal — which now heads to the full Board of Alders for further review and a final vote — would create Connecticut’s second land bank authority that conforms with relevant state law. (Waterbury has the first; Hartford’s land bank, which is also up and running in managing and selling vacant publicly owned properties, is not a state-sanctioned “authority,” according to city Economic Development Officer Dean Mack.)
Monday's Finance Committee meeting.
The new New Haven land bank would serve as a “tool for the acquisition of real property and for the purposes of promoting rehabilitation, housing development, economic investment and development and historic preservation,” per the proposal before the alders on Monday.
City officials argued Monday night that the new entity would be able to act more quickly and nimbly than city government currently can in buying, holding, and reselling housing stock for purposes other than simply making a profit.
The land bank would be seeded with $5 million in public funds to start. Last year, the alders signed off on pulling those land bank startup funds from the city’s federal American Rescue Plan Act (ARPA) allotment, though the Elicker administration has recently proposed funding the land bank with $5 million in state Urban Act Grant monies instead so that those same ARPA dollars can be redirected to buy a Foxon Boulevard hotel and convert it into a homeless shelter.
If established, New Haven’s land bank authority would exist separately from city government, even though its seven-person board would include the mayor, three other top city officials, and three aldermanic appointees.
Click here to read the legislative proposal in full, and here to read a presentation given by city officials on Monday night.
Piscitelli: "We'll have a toolbox as ready to deploy as the larger portfolio owners in the community."
“There are still 200 vacant properties in the city,” Economic Development Administrator Michael Piscitelli said on Monday. “We have over 200 single- or two-family homes that are available on the marketplace right now. As interest rates have gone up, we’ve been seeing a few more ‘for sale’ signs.”
Too often, he said, when small residential properties like these hit the market, they end up in the hands of entities that are not the most responsible long-term stewards of these houses. “We are not as a city always well prepared to be speedy and fast to the marketplace. It could take up to three months to get well-positioned to buy a property.”
Thus the proposed land bank authority.
Mack, Piscitelli, and Livable City Initiative (LCI) Neighborhood & Commercial Development Manager Mark Wilson said that such an authority would be a “private entity” that would have to follow relevant state law and would have a close tie to city government, most notably through its board member makeup.
The land bank authority would also have one full-time executive director and two full-time project managers, as well as contracted staffers to provide legal counsel and property maintenance.
Only 10 percent of the $5 million startup money is proposed for staff, Mack said, with the remaining 90 percent “reserved for operations.”
As an example of a type of property the land bank authority could try to buy if it were up and running, Wilson pointed to the two-family house at 269 West Ivy St. in Newhallville.
He said the acquisition cost of that property most recently was $390,000. Maintenance costs are roughly $4,000. Rehabilitation costs would likely be around $43,000, on the low end. At a resale price of $394,000, the net proceeds to the authority would be … minus-$53,000.
That may seem like a negative, Wilson said. But “it’s really a win if we’re looking at affordable housing. We think the breakout makes sense, particularly with the [citywide] cry for affordable housing.”
East Rock Alder Anna Festa.
And how exactly “are we gonna be aggressive in purchasing [properties] and being competitive with the Mandys, the Oceans, the Pikes?” Festa asked about the proposed land bank authority.
“The most important thing [is] we’ll have a toolbox as ready to deploy as the larger portfolio owners in the community,” Piscitelli replied. Plus, “we do not have to have a revenue stream right out the gate. The land bank is set up to be a stewardship entity” capable of covering “holding costs,” like mowing the grass and keeping a property in good shape, without having to immediately find the first buyer or renter available. Competitors on the private market “want a revenue stream right out the gate,” he said, and don’t have that luxury of waiting.
Has the city considered having the land bank authority buy multi-family homes and convert them into and resell them as condos, Festa asked, in order to promote more homeownership?
Right now, Piscitelli said, the land bank authority, like LCI, is focused on creating new two-family homes that are sold to an owner-occupant at an affordable price who can then rent out one of the units and become a small live-in landlord themselves. “The condo market is quite vexing” in Connecticut and the city “is not seeing as many come on” as one might think. “It’s a great pathway to ownership and equity, just not one we are prepared” to consider Monday night.
And just to be clear, Festa continued, this land bank authority will not be a city department, and its employees will not be city workers?
That’s correct, Piscitelli and Mack said. Mack said that state law around land bank authorities does allow such authorities to recoup half of a property’s annual local real estate taxes for the first five years after it’s been sold by that authority. That will create a modest revenue stream of its own for the authority.
"Another Step Away From Megalandlords"
Speaking in support: Rebecca Corbet ...
... Elias Estabrook ...
... and Alberta Witherspoon.
During the public hearing portion of Monday’s meeting, seven New Haveners — including three members of the city’s Affordable Housing Commission — spoke up in support of the land bank, and in particular in support of an amended version of the law that would require the land bank to be in frequent communication with the Affordable Housing Commission.
“We need safe and affordable housing, and we need it now,” said Winthrop Avenue resident and Affordable Housing Commissioner Rebecca Corbett. She said that her daughter and her daughter’s three young children recently moved into her home “because we have such a severe rental crisis in this city.”
“Please make sure that the land bank is another step away from megalandlords and towards a city that provides safe and sanitary housing for all,” she said.
Fellow Winthrop Avenue resident and Affordable Housing Commissioner Elias Estabrook agreed. “We all know that New Haven is in the midst of a housing crisis,” he said. He said the land bank authority if created could help “keep more properties out of the hands of megalandlords and create more stable homeownership” opportunities for New Haven families.
New Haven residents “can’t compete with slumlords and wealthy luxury developers buying up all the property,” added former Downtown Alder, current Wilmot Road resident, and Affordable Housing Commissioner Alberta Witherspoon. “When I moved downtown in 1996, I never dreamed we would see luxury apartments everywhere.” She said the median rent in the city is over $2,000 for a one-bedroom apartment. “Working people in New Haven need to work two or three full-time jobs to afford rent.”
New Haven Rising organizer and Exchange Street resident Abby Feldman (pictured above) said that her local labor advocacy group has heard three priorities from city residents during their recent round of doorknocking: “access to good jobs, affordable housing, and youth opportunities.”
Affordable housing consistently tops that list, she said.
“We’re hearing hundreds of stories about irresponsible large landlords that are raising rents by hundreds and hundreds of dollars at a time. We are committed to holding these landlords accountable,” and the land bank authority could help mitigate the housing impact of these “large and irresponsible landlords who already own far too much in the city.”
“I have seen mold, ceiling fans fallen in, windows that don’t open, exposed electrical wires, toilets backing up into the units,” said fellow New Haven Rising member and Newhallville alder hopeful Brittiany Mabery-Niblack. “No one should have to live like that.” The land bank could be “a force for good” and for “keeping properties out of the hands of greedy megalandlords.”
Connecticut Tenants Union organizers Luke Melonakos-Harrison (pictured above) and Sarah Giovanniello were the last members of the public to speak out in person in support of the land bank plan.
Real estate investment firms too often treat New Haven tenants as “cash flow machines,” Melonakos-Harrison said. The land bank proposal represents “an opportunity for New Haven to interrupt this vicious cycle by removing properties from the speculative market altogether” and to “counterbalance companies that are siphoning so much” wealth from the community.
“We all know that a New Haven dominated by Mandy, Ocean, and the rest will never house all of us adequately.”
Edgewood Alder Evette Hamilton and Finance Chair Adam Marchand.
During the deliberations portion at the end of the nearly four-hour-long meeting Monday night, nearly every committee alder present heaped praise upon the land bank idea.
“We knocked on doors and we heard [affordable housing] was a concern” for city residents, Board of Alders President and West River Alder Tyisha Walker-Myers said. “This is the fruit of all of our labors.”
“It’s good to see the finish line,” added Fair Haven Alder Ernie Santiago. “We’re almost there.”
Marchand agreed, and noted for his colleagues that, while the city has $5 million teed up for the land bank authority to start, “that money will be gone in not too long. … One of the questions that our board, and also the board of the land bank [will have to consider] is where it will get funding to continue its activities beyond” the initially already approved $5 million.
“If it’s going to do this into the future, it’s going to need to have additional funding. We just need to know that.”
I'm confused. Could someone explain what this has to do with affordable housing? Unless I missed something this sounds like the City just reselling properties for a better price than another entity might. But a local would still need to have the money to buy the house, and they could charge whatever rent they wanted on the units, or resell the house for a profit to a mega landlord, no? I feel like it would be great if there was a Community Land Trust (or other entity) that could buy/take ownership of the properties and rent them at very affordable rates to those in need.