Hamilton wants Butler County to have a land bank, a legal authority to gain control of vacant, abandoned and foreclosed properties.
A nonprofit, public, Land Reutilization Corporation can acquire low-value properties from foreclosures, banks and private owners and sell them to redevelopers. Properties accepted into a land bank are first cleared of all liens and encumbrances, including delinquent property taxes.
The benefit is it can get control of foreclosed properties sooner in the process than the city can now and it puts the properties back into reproductive use quicker by rehabilitating, demolishing and transferring the properties to ensure they’re put to use, said Stacey Dietrich Dudas, Hamilton economic development specialist. Currently Hamilton can’t take hold of foreclosed property until it has been for sheriff’s sale twice, Dietrich Dudas said.
“If we can help speed up the process so they’re not sitting there vacant, that benefits the community,” she said.
Butler County Treasurer Nancy Nix said foreclosures have hit Hamilton and Middletown hardest.
According to the Butler County Clerk of Courts, 3,165 foreclosure lawsuits were filed for failure to pay property taxes or mortgages last year. As of mid-October, 2,025 foreclosure cases have been filed this year, according to the clerk’s office.
Vacant and abandoned buildings attract criminal activity, according to a policy discussion paper on land banks for the Federal Reserve Bank of Cleveland.
“Vacant and abandoned properties also remain off tax rolls and lower the value of surrounding properties, further eroding the real property tax base,” wrote the paper’s author Thomas Fitzpatrick.
Forming a land bank is part of Hamilton’s We Create Economic Opportunity strategy. Dietrich Dudas already presented to Butler County Port Authority about it. Even though the city wants a land bank, Dietrich Dudas said it would have more of an impact if the county had one.
Tuesday, Nov. 1, at Hamilton City Council’s monthly economic development subcommittee meeting, City Manager Joshua Smith said, “One thing I’m convinced of is we need to establish a land bank sooner than later.”
Middletown city officials said they haven’t been approached yet to partner on a land bank. Middletown has a passive land bank that holds properties for future use, according to Doug Adkins, community revitalization director. With a few specific exceptions such as the Cincinnati State buildings downtown Middletown, the prior and current policy of city council has been not to be involved in the local real estate market by taking title to property, Adkins said.
“We generally take title to vacant property sparingly when we believe we have an end use for a parcel,” Adkins said. “Like many projects, a formal county wide land bank provides opportunities and drawbacks.”
A land bank would be funded by penalties paid on late taxes, Nix said. For example, the first 10 days a tax bill is late, there is a 5 percent penalty. A tax bill paid later than 10 days gets a 10 percent penalty, Nix said.
The treasurer’s and prosecutor’s office each get 2.5 percent of penalties paid for delinquent taxes, she said. An extra 5 percent would be taken from penalties paid to pay for the land bank, tax money that wouldn’t go to schools, she said.
“We didn’t see a big need for it outside of Middletown and Hamilton, they just didn’t have the blight,” she said.
A land bank allows the organization to take control of these properties and clear them of back taxes, she said.
“The risk is owning and maintaining properties,” she said.
Cuyahoga County was the first in Ohio to have a land bank after legislation for it was passed in 2009. Land banks have since been implemented or explored in Franklin, Lucas, Montgomery and Hamilton counties, said Nix and Dietrich Dudas.