As the saying goes, a team that works together stays together! This characterizes the three year relationship between the Cuyahoga Land Bank and its partner the Department of Housing and Urban Development (HUD). In the aftermath of the foreclosure crisis which left many neighborhoods plagued with large scale vacancy and abandonment, the unscrupulous owners, banks and speculators took advantage of the situation and began flipping properties without any concern for neighborhood improvement.
Not so with HUD.
Recognizing that many of the foreclosed homes which were guaranteed by HUD ended up in HUD’s possession, high level officials at HUD determined to stay in partnership with the Cuyahoga Land Bank for the purpose of keeping off the market those properties which needed to be demolished and were feeding grounds for unscrupulous speculators.
The agreement originally was crafted in 2010 and provided that properties appraised below $20,000 in Cuyahoga County would be deeded to the Cuyahoga Land Bank for $100.00.
Upon such acquisition, properties would be carefully inspected, evaluated and put on the Cuyahoga Land Bank’s website for input from CDCs, citizens and other stakeholders. Those properties determined to be beyond rehabilitation would be kept off the market and demolished so as to remove the blight and safety hazards associated with these abandoned vandalized homes. Those properties determined to be suitable for rehabilitation would be made available for resale, but only to buyers who agree to fix the home according to carefully prepared renovation specifications.
The Cuyahoga Land Bank has similar arrangements with various banks and Fannie Mae. In most instances, these other institutions pay the Cuyahoga Land Bank for the cost of needed demolition.
Recognizing the large cost of these demolitions, HUD agreed in 2011 to increase the donation threshold from $20,000 to $30,000. This allowed the Cuyahoga Land Bank to acquire housing that had better potential for rehabilitation. The agreements expired in October of 2012.
Recognizing the importance of this agreement to Cuyahoga County, U.S. Senator Sherrod Brown convened the Cuyahoga Land Bank and HUD officials to assure that the agreement would be continued.
HUD officials recognized that unlike any other county in the country, a critical mass of stake holder participation made it logical to extend the agreement in Cuyahoga County. Indeed, the Cuyahoga Land Bank has a similar relationship with Fannie Mae and other large banks such as Bank of America and Wells Fargo. Additionally, Ohio’s tax foreclosure legislation allows for abandoned distressed homes to be directly transferred to the Cuyahoga Land Bank which also was a distinguishing feature from all other legislation throughout the country. Perhaps most importantly, the Cuyahoga Land Bank possessed a reliable funding stream so that many of the distressed properties could be disposed of in an orderly, strategic and reliable manner. Cuyahoga Land Bank President, Gus Frangos and HUD spokesman Brian Sullivan praised Senator Brown’s efforts to help the two groups reach an amicable agreement. Sullivan said that HUD was able to sign a very attractive agreement “which we are very pleased with.” “It is a win-win deal and we can continue our partnership with the Land Bank and stabilize hard hit neighborhoods in Cuyahoga County.”
Senator Sherrod Brown said “the winners in this deal are the residents of Cleveland who will see more stable neighborhoods and the housing market better sustained.”