Apr 4, 2013

City Hall is Making it Easier to Buy City Owned Properties

As the population of Buffalo continues to shrink we are often left with an increasing catalogue of vacant homes, many of which become the property of the City of Buffalo. Ownership falls to the city for a wide variety of different reasons like failure to pay taxes or a property being struck to the city due to increased complaints because of the negligence of the property owner. The process for acquiring a city owned property is usually lengthy and complicated, but things are beginning to change for the better at City Hall.
This handsome double is located in Hamlin Park and city-owned. A separate post will follow for it shortly
Traditionally, the process for buying a city owned home includes demonstrating the buyer has a minimum of $5000 for purchase and rehab, a review of the property, and an appraisal paid for by the purchaser. If the home is only worth a few thousand dollars, the cost of the appraisal (~ $300 to $500) becomes a large percentage of buyer’s investment in the house purchase and often deters people from entering into the program.

After that initial process the application goes through the land use planning committee for review. The committee meets the first and third Wednesday of every month so if the application is not received in time it could mean an additional two-week delay. They evaluate all aspects of the application including a check that the buyer is clear of all code violations, up to date on their taxes, and not a home flipper. This whole process from the initial interest in the home to the land use approval typically takes two months.  

The Lyth Cottage was purchased from the city in 2011 and is nearing the end of its rehabilitation

In order to cut down on time and costs for a potential buyer, the Department of Real Estate has recently introduced a new system for marketing a city owned property. The Multiple Listing System (MLS) reduces the time of the purchase review by about two months. Additionally, it establishes the fair market value for each property rather than having an interested buyer pay for an appraisal.

The MLS is operated by the WNY Real Estate Information Service, which is associated with the Buffalo Niagara Association of Realtors. The City of Buffalo had to become a broker with approval from the Department of State in order to enter into the Association and have the ability to join the Real Estate Information Service. The homes on the MLS site can be purchased by using any licensed realtor rather than going through the city process.

“I believe the quality of life in the City of Buffalo can be impacted through real estate,” said Christie Nelson, the Director of Real Estate, “Home ownership creates a sense of pride that can lift up a community.” Christie was nice enough to spend about an hour with me explaining this whole process and how the new system can make it easier for buyers to reinvest in the city.

This house on East Utica was unfortunately lost recently after a buyer could not be found

A question that has often gone unanswered is why the city cannot just sell a property to a qualified buyer for $1 and avoid this whole process. People often mistakenly point the finger at city hall and claim it is just government stonewalling the little guy. The real reason lies within in the city charter and NYS municipal law which forbids “gifting” real property to an individual, i.e. not paying fair market value. This presents a limitation for the real estate department since there are many capable buyers out there, but most are unwilling to deal with traditional lengthy purchase process.

“Mayor Byron Brown's appointment of Christie Nelson as the new Director of Real Estate is the sort of appointment that both grass roots community activists and private investors are supporting.” said David Torke of fixBuffalo, “This is an important step forward for the City and for people who want to invest responsibly in the City's growing inventory of distressed property.” Torke has helped facilitate the sale of several city-owned properties to new owners, many moving from the suburbs into the city. 

Although the city currently has a handful of properties listed in the MLS more will likely be added and expanded in the near future. Getting as many city owned properties on this list will allow for an expedited purchase process and get these neglected homes into the right hands for rehabilitation. The introduction of the MLS is certainly keeping with the department’s goal of “making Buffalo’s neighborhoods better for the next generation” and “creating economic, housing, and quality of life opportunities in Buffalo’s neighborhoods.” 


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