Land bank would target vacant homes (Middletown Journal)

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Land bank would target vacant homes (Middletown Journal)

Plan supporters looking for way to deal with increase in foreclosures.

The idea to create a public land bank in Butler County to deal with more than 12,000 vacant homes has been criticized, including skepticism from Commissioner Don Dixon.

But supporters say something has to be done to deal with the 500 percent increase the county has seen in foreclosures in the past decade.

Dixon thinks the root of the problem is jobs and the county doesn’t need another layer of bureaucracy.

“Would I be opposed to it? No. Am I wild about it? No,” Dixon said.

Development needs expertise that should be left to the private sector, he said.

“I think there are some places where it could work selectively. I don’t believe the county or the public sector should be into buying houses, rehabbing them,” he said. “The bottom line is people have to have a job to make mortgage payments and pay taxes.”

Butler County is considering creating a land bank or a County Land Reutilization Corp., which is a quasi-public, nonprofit organization.

This organization can acquire vacant, abandoned, tax-foreclosed or other real property for rehabilitation and reuse. Properties accepted into a land bank are cleared of all liens, including delinquent property taxes.

The county director of development and county treasurer think the land bank will help.

“I’m not sure about foreclosures, but I think there’s enough vacant and abandoned properties,” said David Fehr, the new development director. “All it takes is one bad property on the street to decrease everybody’s property value on the street.”

One abandoned property is enough to justify a land bank, said Treasurer Nancy Nix.

“It could be just sitting there ready to use if you need it,” Nix said.

Butler County’s foreclosures have increase from 500 in 1999 to more than 3,000 each in 2009 and 2010, according to Thriving Communities Institute. The county had in 2010 a total 12,313 vacant housing units, according to Census data.

The benefits of a land bank are to stop speculation or flipping of properties, stabilize the housing base, improve quality of life and advance urban planning, said Jim Rokakis, the former Cuyahoga County treasurer who helped form the first Ohio land bank there. Rokakis now heads Thriving Communities Institute. He said for no other reason, a land bank is useful for clearing away any lien to title and for an economic development tool.

Cuyahoga County had 110,000 foreclosures since 2000, Rokakis said.

“It’s not just about survival for stronger counties, it’s a tool to help you thrive,” Rokakis said. “You have to stabilize the real estate picture, and it’s not going to happen by itself.”

A land bank is not a county government agency, but it would have a board of trustees/directors that include government officials and use some public funds.

There is no deadline for Butler County to decide to form a land bank, but Fehr hopes to have a proposal for county commissioners to look at by the first of the year.

These are problem properties that have already gone to sheriff’s sale and aren’t going to go away, Fehr said.

“This isn’t something you go into lightly. You have to have your information and game plan together before you can enter into this venture,” Fehr said. “We would like to have everyone’s political support.”

A land bank has been a discussion point here a couple years, Nix and Fehr said. The city of Hamilton recently mobilized the idea, making it part of the city’s strategic plan approved this year.

Hamilton had in 2010 a total 3,320 vacant housing units and Middletown had 3,047, according to Census data.

“I think it may be a bigger issue in urban areas, but I think it is an issue around the county,” said Stacey Dietrich Dudas, Hamilton economic development specialist.

Case in point, Dietrich Dudas said she lives in a newer subdivision in Hamilton and a house on her street has been empty more than a year.

“Even in newer subdivisions, there are vacancies and foreclosures that are occurring,” she said.

The potential downsides of forming a land bank include initial decreased funding for school districts and organizations with levies, Fehr said. One of the ways to fund a land bank is to use the Delinquent Tax and Assessment Collection Fund. The money comes from penalties on late property taxes.

If a person pays their property tax bill late, there’s a 5 percent penalty the first 10 days and a 10 percent penalty after that, Nix said.

The pot of money collected from penalties paid on late taxes goes 2.5 percent to the treasurers’ office, 2.5 percent to the prosecutor’s office and the rest is divided to school districts, the county, cities and organizations with levies, Nix said. If a land bank was funded this way, an additional 5 percent could be reallocated to the land bank instead of going to school districts and levies, she said.

That amount would be an estimated $900,000 based on this year’s collections, she said.

Fehr said it’s an initial cut, but if the land bank helps increase property values, the school districts and other organizations would get the money back.

A land bank would also have to be careful not to take property without a plan for it, he said. The land bank doesn’t need to be a landlord, and that would increase costs for the corporation to take care of the property.

“If we start small and limit and have a good game plan, this could be a very valuable tool,” Fehr said.

One potential delay is finding someone to be in charge of the land bank, Nix said. The Port of Greater Cincinnati Development Authority will house Hamilton County’s, but the director of Butler County’s Port Authority, Mike Campbell, is currently also interim county administrator. Until Butler County finds a new administrator, the bank could be delayed, she said.

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