Vacant Property Working Group (VPWG)

1. Pittsburgh Community Reinvestment Group 1901Centre Avenue, Suite 200 Pittsburgh, PA 15219 (412) 391-6732 Vacant Property Working Group (VPWG) Property Acquisition, Land Reclamation Tools and the City of Pittsburgh Land Reserve Staff Contact: Bethany E. Davidson – 412.391.6732 x201 or bdavidson@pcrg.org

2. 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

3. 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.

4. 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

5. Provided by the Community Information System (CIS)

6. VPWG Vacant 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

7. 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

8. 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

9. Pittsburgh Property Reserve

10. 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

11. 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

12. 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)

13. 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

14. 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

15. Eligible 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 PPR Basic (In)Eligibility

16. Property Information Location Street address Ward Lot/block number Owner(s) of record Vacancy status Must be vacant Tax delinquency At 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 Property Research/Due Diligence

17. I. Property Information Request 1. 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

18. II. Application and Selection • Project 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

19. 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

20. Vacant Lots Cost :$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 IV. Deposit and Promissory • 3rd party costs: • Legal notification (mailings and public notices) • Title search and clearing costs • Maintenance and inspections

21. 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)

22. 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

23. 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

24. Acquisition Tool:Conservatorship& other State Laws

25. Acquisition Tool:REO Portfolios

26. Acquisition Tool:Side Yard Sale

27. Reclamation Tool:ReddUpGreenUpTaking Care of Business

28. Reclamation Tool:Garden Waiver / Lease

29. Question / Answer Thank You