A  May 28 Sustainable Cities Network article examined the history and role that land banks can play in revitalizing failing neighborhoods and preventing stable neighborhoods from deteriorating.  Land banks are quasi-governmental entities, typically created by counties and municipalities, for the purpose of acquiring and holding land and properties (including abandoned, vacant, or foreclosed properties) for future development.  Land banks can be tailored to meet specific local needs.

The primary thrust of all land banks and land banking initiatives is to acquire and maintain properties that have been rejected by the open market and left as growing liabilities for neighborhoods and communities,” [Center for Community Progress Co-Founder Frank] Alexander wrote. “The first task is the acquisition of title to such properties; the second task is the elimination of the liabilities; the third task is the transfer of the properties to new owners in a manner most supportive of local needs and priorities.”

The article noted that the land banking concept originated in the 1960s and the first land bank was established in St. Louis in 1971.  Since then, there have been two successive generations of land banks, with the third generation focusing almost exclusively on repurposing vacant housing.  The article estimated that there are about 150 land banks in 23 states and specifically focused on land bank efforts in Michigan, New York, and Georgia.

Michigan

The article noted that Michigan, which leads the states with 36 land banks, revised its land banking statute in 2003:

The 2003 Michigan Land Bank Fast Track Act created self-funding mechanisms for land banks, allowed them to acquire all tax-foreclosed properties and empowered Michigan land banks to demolish and rehabilitate properties through code enforcement.

Before passing the act, the state legislature streamlined the Michigan tax foreclosure process, shortening it from seven to only two years.

New York

The Greater Syracuse Land Bank (GSLB) was incorporated in 2012 and seems to be helping both Onondaga County and the City of Syracuse address vacant structures where other methods, such as Community Development Block Grants and tougher code enforcement, were proving ineffective.

“The bank is a bridge between the private and public sectors. We are able to sell to well-vetted buyers. We ask for detailed development plans, itemized budgets, how it will be managed and proof of financing,” [GSLB Executive Director Kaitlin Wright] said. “For example, if a developer says he or she can do the labor, we ask for proof that they have done it before.”

A lot of the value in a land bank is invisible, so GSLB must do enough tangible things to show its value, Wright said, including working closely with elected officials and neighborhood associations.

Georgia

Fulton County and the City of Atlanta have also seen successful results from its land bank authority:

The Fulton County/City of Atlanta Land Bank Authority (LBA) began to focus on ‘conduit transfers’ of tax-delinquent properties to community development corporations (CDCs) at the rate of about 50-100 properties a year, [Center for Community Progress General Counsel Sara Toering] added. It later created the first-ever five-year holding period in 2009 to rescue properties during the foreclosure crisis, enrolling more than 200 properties and releasing 34.  …

LBA is poised to expand its scope of activities even more,  [LBA Executive Director Chris] Norman said, largely because of the self-funding option authorized recently by the Georgia legislature.

Conclusion

The article concluded by stressing the increasing sophistication of land banks and the importance of regional efforts:

“I am incredibly excited about land banks, a targeted and strategic investment of resources,” Toering said. “There is a lot of networking now. Folks in the trenches have been doing work for decades and are sharing best practices. That means less reinventing of the wheel and more innovation.

“The increasingly regional approach is exciting, too,” she added. “Local governments are combining forces to address the symptoms of blight on a broader scale, which is essential.”