Land Banking Case Studies: Best Practices

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Land Banking Case Studies: Best Practices

July 3, 2012 [Christina Harris, Metropolitan Planning Council]

Cities and counties across the country and in our region are exploring land banks as a promising strategy for addressing vacant properties. This five-part series on land banking on MPC’s blog, The Connector, is intended to inform policymakers and practitioners in northeastern Illinois and other regions—most notably in Cook Countyas they explore options for addressing the vacant and abandoned buildings crisis.

Land banking best practices

By reviewing the case studies and understanding the different models employed geographically, a set of best practices can be gleaned in order to inform future decisions in the Chicago region.

Land Banks do more than just hold land. All three land banks featured in this blog series—Cuyahoga County, Twin Cities, and Genesee County—have multiple programs through which the land bank is involved in rehabilitating, demolishing, selling, remediating, and helping to plan for the reuse of the properties in their possession.

Establish ways to work across jurisdictions effectively. The Cuyahoga County land bank maintains MOUs with multiple jurisdictions in the county. The MOU frames the partnership between the county and city and establishes the priorities for property management, demolition, notices, etc. In addition, it allows municipalities to guide decisions on the future of its properties. If the parcel goes through foreclosure, the city has the right to buy the parcel prior to the land bank claiming ownership. It also has priority acquisition to acquire a property within 30 days after it enters the land bank through another process.

Multiple streams of funding are necessary. Government funds or other outside funds could be used for property acquisition and rehabilitation, which occurred in Cuyahoga County. Funding could also be acquired through interest and fees received on loans as in the case of the Twin Cities. Tax recapture can also be used as an innovative policy tool for funding land bank operations. In Genesee County, 50 percent of property taxes of formerly land banked parcels are returned to the land bank for the first five years after they are sold.

Property acquisition should be permitted through many avenues. Land banks should be able to acquire properties in different ways, ranging from voluntary donations to transfers from private owners and local and federal government. Cuyahoga County, Genesee County, and the Twin Cities all allow for this to occur.

Develop public-private partnerships. In Cuyahoga County, public-private partnerships were developed as a way to acquire vacant land beyond the reformation of the Tax Sale process.  Government entities such as the Dept. of Housing and Urban Development and Fannie Mae, in addition to private lenders donated or sold properties to the land bank for a minimal fee, so that they could be demolished or rehabilitated. Public-private partnerships also can be used to fund and manage renovations, leasing, and other forms of property management.

Use technology to understand the inventory and maintain an up-to-date assessment of vacant properties. Cuyahoga County has a property profile system that connects to multiple databases, such as the auditor, treasurer, title companies, clerk of courts, demolition and building code departments, and city permit filings. Users can find property characteristics, land bank parcels, and construction permits.

Establish an approved list of contractors, developers and rehabbers to maintain, rebuild and demolish land bank properties effectively and efficiently. Twin Cities has a good model for identifying and certifying the people with whom they work.

Restructure the delinquent tax sale process. Streamlined tax sale foreclosure processes in both Genesee County and Cuyahoga County reduced speculators profiting from the tax sales and helped land banks directly acquire tax-delinquent property, with both high and low market values. This allows the land bank to receive a mix of properties so that properties with high value can subsidize the low value inventory.