The Clark County land bank could benefit financially if Ohio receives a share of a private settlement between Bank of America and the U.S. Department of Justice to provide relief for some of the state’s hardest-hit counties, including several southwest Ohio counties.
Ohio’s U.S. senators Sherrod Brown, D-Avon, and Rob Portman, R-Cincinnati, are asking for $100 million out of the $16.65 billion settlement.
And the plan is to have the money funneled directly to the 22 county land banks that directly deal with properties in disrepair and need to be demolished in order to improve communities.
Brown and Portman sent a letter to Bank of America last month asking the company to direct part of its multi-billion settlement reached in August to Ohio communities.
“It’s time that the big banks make right for these practices and reinvest in Ohio communities,” Brown said. “By securing these funds, we can help families stay in their homes and rebuild their neighborhoods. I urge Bank of America to invest in Ohio.”
Since 2009, more than 369,700 homeowners have been foreclosed upon by banks, and more than 88,000 of those homes were among 10 counties in Southwest Ohio. Clark County has had more than 4,600 foreclosures during that time and ranks among the top 20 counties with the most foreclosures in the state. Cuyahoga and Franklin counties top the list.
Clark County Land Reutilization Corp. leaders are hopeful the land bank gets a share of the money to help demolish or rehabilitate foreclosed homes.
Commissioners John Detrick and David Hartley, who are land bank board members, said the land bank that was established earlier this year could use additional financial assistance.
The land bank was awarded $680,000 through the Neighborhood Initiative Program in August to rid area neighborhoods of dilapidated homes and abandoned proprieties, and to return them into productive uses. But officials said additional money from the settlement is needed because of the the large number of blighted proprieties in the area.
“We’ve got more demand for structures than we’ve got money to do them, so this would be a real shot in the arm,” Detrick said.
Hartley said there are foreclosed properties in Clark County that are falling apart and need to be rehabbed and returned to the local tax base.
Hartley said he hopes Brown and Portman’s efforts succeed and help land banks.
“It might not wind up being that much (for Clark County), but anything we could get would help,” Hartley said.
Brown said they have requested upwards of $100 million be earmarked for Ohio in negotiations with not-for-profit groups, such as Thriving Communities Institute, and the county land banks that represent 70 percent of the state’s population.
Portman concurs with Brown and “strongly supports” the efforts of Ohio land banks and other stakeholders to help struggling neighborhoods get back on their feet. He said land banks and housing groups are at the forefront to turn around communities.
“Foreclosures and declining home prices have hit many of Ohio’s neighborhoods, and it’s crucial that the private and public sector work together on neighborhood stabilization efforts,” said Ohio’s junior senator.
August’s $16.65 billion settlement deal is the latest in national bank foreclosure settlements. Ohio benefited from the first national settlement — a $25 billion settlement in 2012 with the country’s five largest banks — when it received more than $300 million. The Ohio Attorney General’s Office, which is not involved in this latest settlement deal, created the Moving Ohio Forward grant program. Counties divvied up a share of $75 million to raze dilapidated, foreclosed and abandoned homes.
“For these bank settlements to be truly meaningful it’s critical that hard dollars find their way to the most seriously affected communities in Ohio,” said Jim Rokakis, director of Thriving Communities Institute, a northern Ohio agency that aids communities in revamping vacant and non-productive properties.
After the $13 billion JP Morgan Chase settlement was announced, more than 100 people representing organizations around Ohio worked to develop a plan to give to banks when deciding where to distribute settlement dollars, he said.
“We think making donations to Ohio land banks could be attractive, for example,” Rokakis said.
Outside of verifying a land bank is legitimate, he said no due diligence is required of Bank of America — or any other financial intuition — which is ordered to pay restitution in connection to the mortgage fraud scandal.
Brown said that former Federal Reserve chairman Ben Bernanke touted that the economy will recover when manufacturing strengthens. The senior senator contends the housing market is also part of that equation.
“It’s been some six years since the financial crisis reaped terrible damage of homeowners and investors in our state and across the country. We’ve made progress, we know the economy can’t only recover only until the housing market does,” Brown said. “The manufacturing has turned around — not as much as we want — but it has been meaningful that way. Housing has not pulled its part in many ways.”
Foreclosures, though, have declined, Brown said, but not enough. Until 2012, the senator said Ohio had 14 consecutive years of more foreclosures than the year before.
“These funds won’t erase the housing crisis but it will help reverse its course,” Brown said.
Clark County Community Development Grant Coordinator David Fleck said land bank officials would like to see funds become available to rehab properties.
“There’s been a lot of money going around lately for demolitions which was great because it was needed, but we would like to see some money eventually for rehab programs to rehabilitate some of the housing stock we have now … We want to make the best out of the stock that we do have instead of leveling (all of the dilapidated properties),” Fleck said.
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