City Council Housing Committee meeting (June 5, 2023)
A U.S. Supreme Court ruling is causing concerns over how proceeds from county tax auctions will be handled.
On May 25, the Court ruled that state and local governments cannot seize and sell the homes of people with unpaid property taxes and keep the proceeds beyond the amount owed.
The Supreme Court ruled that a county in Minnesota violated the Fifth Amendment‘s bar on the uncompensated taking of private property by a government for public use, a provision known as the “Takings Clause.”
Jamestown City Council learned about the ruling when Councilmember Brent Sheldon asked if the city or Chautauqua County Land Bank would be pulling any properties from the upcoming county tax auction for potential rehabilitation.
Department of Development Director Crystal Surdyk said the city may not pull any properties as a result of the court ruling, “The Land Bank has advocated to stall the county auction until there is a plan. I don’t know that that’s going to happen. But, we are very hesitant to get into a situation where we pull properties from the auction list and put the city and, or, Land Bank in a position where we would then have to pay a difference between what the property is sold for and what is owed.”
Surdyk added she doesn’t want to pay and reward an absentee landlord who allowed their property to go to auction and pay the difference for something they neglected.
She said the city is looking at possibility of pulling properties for demolition, “If we legally can count the cost of demolition against what the value of the property would be and then bill that back to that landlord, which is what we typically try to do anyway, but we want to make sure that constitutionally this does not, that it will uphold in court should somebody file a claim against that.”
Mayor Eddie Sundquist said the New York Conference of Mayors is recommending that all municipalities that hold In-Rem Foreclosure Auctions delay those auctions until a state plan is in place, “The state may look at a temporary moratorium for any counties that aren’t in compliance with this decision already, counties or municipalities. We don’t know if that will happen yet. Obviously, the legislature is still in session, so we’re waiting to see. There are also several bills that would bring the state into compliance with that decision that are still being voted on and worked through the legislature.”
Surdyk also shared that while the city will still continue to attach code violations for properties on the county’s tax auction, the company hired by the county will now only be providing that information upon request by bidders versus providing that information online as had been done in the past.
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