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On January 12, 2024, Governor Phil Murphy signed the Wealth Preservation Program law, an ambitious reorganization of the foreclosure process in favor of second chances, non-profit rights of second refusal and affordable home ownership. Then-Assemblywoman, now-Senator Britnee Timberlake, introduced this law because New Jersey has the highest foreclosure rate in the country, with one foreclosure for every 2,271 homes.[1] The potential impact of this law goes beyond just reducing the number of foreclosures. It potentially limits institutional investors’ opportunities to purchase foreclosed homes at sheriff’s sales by providing ordinary homebuyers initial opportunities to bid on properties on more favorable terms. Under the Act, defaulting homeowners, their next of kin or tenants have the first chance to re-purchase their homes from sheriff sales at a publicly disclosed discount price by paying only a 3.5% down payment with 90 days to close. If they do not elect to purchase, non-profit community development corporations (CDCs) have the next right of refusal in exchange for deed restrictions that keep the property affordable to subsequent owners or renters.
In June 2023, the Supreme Court in Students For Fair Admissions, Inc. v. President and Fellows Of Harvard College (“SFFA”) found that Harvard University’s and the University of North Carolina’s affirmative action admission policies unconstitutionally employed race-based discrimination, violating the Equal Protection Clause of the 14th Amendment.[1]
Beginning with its first constitutional review of affirmative action, the Court has consistently found that the only governmental interest compelling enough to warrant the use of race in admissions policies and decisions, and thus satisfy strict scrutiny judicial review, is the institution’s interest in “obtaining the educational benefits that flow from an ethnically diverse student body.”[2] Before this first opinion in Regents of Univ. of Cal. v. Bakke, affirmative action initiatives were a “response to the legacy of Jim Crow segregation and, by extension, slavery. It was an outgrowth of the civil-rights initiatives… Diversity was part of the conversation, but it was only one of many reasons selective colleges employed affirmative action.”[3]
On July 10, 2024, Governor Phil Murphy signed a tax sale revision law (A3772/S-2334), which modifies the process for investors engaged in tax sale foreclosures and provides steps for homeowners to protect their equity. Senator Brian Stack (D-33) introduced this law in January 2024 in part because of the case of a 94-year-old Black woman named Geraldine Tyler, who lost her home and equity in the tax sale foreclosure process. In 1999, Mrs. Tyler purchased a one-bedroom condominium in Minneapolis, Minnesota. She lived in the condominium until 2010 when problems in the neighborhood prompted her to rent an apartment in a safer area. She experienced financial difficulties, leading her to get $2,300 in tax arrears, which increased to $15,000 with penalties and interest. In 2015, Hennepin County, Minnesota, seized her condominium, sold it for $40,000, and pocketed $25,000 in surplus equity. On May 25, 2023, the United States Supreme Court unanimously held in Tyler v. Hennepin County that the municipality violated the Takings Clause of the U.S. Constitution when they stripped and retained Mrs. Tyler’s equity.
This is a report about how cities can better organize and manage their data about the property they own in order to promote transparency and advance critical policymaking. Newark, like many legacy cities, owns hundreds of parcels through tax foreclosure and abandonment that can be put to more productive use and even generate needed revenue. Because of different inputs from different departments, its property data system contained duplication and gaps that prevented policymakers and stakeholders from getting a clear picture of these public assets. In partnership with city staff, CLiME helped to resolve the data organization problem and set property management on a new, more accurate and user-friendly course. Along the way, we learned details about the nature and amount of city-owned properties, how they’re zoned and where they’re located. We concluded that much more of this significant inventory can and should be put to work advancing long-held goals of equitable development. We built three demonstrations to simulate this usage that cover three major areas of policy: affordable housing production, commercial and industrial development and green space/environmental risk mitigation. Each of these is an area in which the Baraka administration is already active in setting aggressive policies. Some of those policies already make use of the asset of city-owned land. Until recently, it was impossible to see the scope of particular uses because the data did not readily permit it. Now the data is cleaner and clearer.
Individual break-out reports from the full report are also available:
As the New Jersey Supreme Court recently noted in Malanga v. Township of West Orange, municipalities can sell or improve upon public property in a number of ways.¹ However, a redevelopment designation appears to be the best way for a municipality to maintain the greatest degree of control over the future of a given parcel, in terms of retaining ownership, choosing a developer and deciding the use to which the parcel will be put. Without such a designation, in order to facilitate non-publicly funded development of city-owned property, a city would have to auction property off to the highest bidder at an open public auction, a risky process over which the city could easily lose control.² Furthermore, though a municipality can impose conditions on the sale and restrictions on the use of property sold at auction,³ it cannot convey property for nominal consideration without a redevelopment designation, unless the property is conveyed to a very narrow set of noncommercial entities.⁴