Schenectady plans to turn foreclosed property into profits

Posted at: 09/17/2012 11:13 PM | Updated at: 09/18/2012 12:12 AM
By: Dan Bazile

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SCHENECTADY -- Many Schenectady residents got the boot this month after falling far behind on their property taxes.

"We have to get the message out that people have to pay their property taxes," said Schenectady Mayor Gary McCarthy.

He added that there's a large number of people who have not paid their taxes and that's created a foreclosure problem where city officials are taking over properties they don't really want. They came up with a plan and presented it to the city council Monday night. If approved, the foreclosed homes will be evaluated, sold to a contractor for $1 with the agreement the home will be renovated and sold on the market at a higher price. The city gets half the profit.

"We don't know it's going to work. But from the enthusiastic response we've had from a number of people, we fully expect that it will," said John Polster, the city attorney.

The responses are coming from companies like Prudential. But the program has never been tested before, according McCarthy. Times are tough for cities across the country. Schenectady officials said this is a pilot program and other cities are looking at it and may end up doing the same thing if it works. McCarthy said the old way of selling these homes for $1 to anyone just to get them back on the tax rolls, isn't working.

"We're not looking for the quick fix. We're not looking for the quick cash. We don't want people who don't have the wherewithal to own property," McCarthy said.

The city took in 155 properties this month. Officials say the vast majority of them can be rehabbed. Some are vacant lots while others are so far gone, they'll have to be torn down. Many of those homes are also in depressed areas. But city officials feel their plan will make them desirable to families.

"We're going to concentrate our efforts on areas at a time. So when we get into a depressed or blighted area, we're going to work on the entire area," said Schenectady Building Inspector Eric Shilling.

Schenectady plans to take in an additional 200 homes next month. The city attorney says they'll know in the course of four to six months whether the program is falling into place.