June 28, 2012 [The Montrose Group LLC]
Land Banks an Essential Redevelopment Tool
Ohio, like the rest of the nation, faces the challenges created by unprecedented home foreclosures. The state’s nearly top 10 rank nationally in the number of homes foreclosed is not a point of pride. Ohio, like the rest of the nation, is facing a housing crisis where neighborhoods, urban, rural and suburban, are facing a crisis of vacant, abandoned or foreclosed homes. Major urban counties, such as Cuyahoga, Franklin, Hamilton and other urban counties top the list but better off suburban and rural counties such as Licking County are on the list of top home foreclosures. With roughly 1 in 500 homes in foreclosure in Ohio, the housing crisis is everywhere.
However,Ohio is a national leader as well in answering the challenges of home foreclosures. One such weapon in the state’s arsenal are the creation of land banks at the local government level. Ohio invented land banks. Municipal governments, with state Constitutional Home Rule Authority, worked early, before the current housing crisis, to address the issue of vacant and abandoned property through the use of land banks. Land banks operate when local governments gain control of property and work then to rehabilitate as well as promote the reuse of the land. Most often, this is centered around residential development.
In the past several years, the Ohio General Assembly has expanded local government’s power to use land banks first just in just Cuyahoga County then later in counties with more than 60,000 residents. These counties are permitted to create a nonprofit county land reutilization corporation to promote economic and housing development and to facilitate the reclamation, rehabilitation and reutilization of vacant, abandoned and foreclosed properties. County Treasurer’s are the players in building land banks and they are permitted to create a land bank funding mechanism through penalties and interest collected from those failing to pay property taxes. In addition, state law protects local land banks from liability for breach of a common law duty in connection with a parcel of land.
A couple important points to remember when looking at developing a local land bank program:
- Utilizing technology such as mapping software and understanding the home foreclosure data in your community is an important first step to identify the scope, scale and location of the challenge as well as to help in crafting the proper solution;
- Gaining the buy-in of local political leaders at the county and municipal level is essential;
- Creating a process with key stakeholders in the community is essential to developing a successful land bank program;
- Matching the solution with the size of the home foreclosure challenge is an important step that cannot be overlooked—this is no “cookie-cutter” operation where one community can replicate another’s program;
- Developing a strong funding stream to permit the rehab and reuse of the property is essential; and
- Establish the county land reutilization corporation to not just start a land bank but to operate with a solid strategic plan in place.
Land banks can be an effective tool to combat neighborhood decay created by vacant, abandoned and foreclosed homes. However, without a strong strategy and full funding, land banks can be just another government bureaucracy doomed to failure.