HOW DO LAND BANKS WORK?

 

Land banks are designed to acquire and maintain problem properties and then transfer them back to responsible ownership and productive use in accordance with local land use goals and priorities, creating a more efficient and effective system to eliminate blight.

In order to accomplish these tasks, land banks are granted special powers and legal authority pursuant to state-enabling statutes. Though these statutes differ widely from state to state, the more recent examples of comprehensive land bank legislation generally grant to land banks power to:

• acquire property through various mechanisms, including obtaining property at low or no cost through the tax foreclosure process,

• hold title to property tax exempt and in some cases extinguish back taxes,

• clear title and in some cases expedite the clear title process,

• consolidate and assemble publicly held inventory into a single agency/department,

• streamline disposition and sale of properties to responsible owners or developers,

• lease properties for temporary uses, and

• convey property for below market value, focusing on outcome that best aligns with future land use goals, rather than the highest bid price.

We want to stress that a land bank is not a “silver bullet” for communities struggling with vacant, abandoned, and deteriorated properties. Though land banks are uniquely designed to help reduce these problem properties, the policies, priorities, and activities of a land bank must complement other community strategies and activities, such as strategic code enforcement, smart planning and community development, and effective tax collection and enforcement. For more information on the systems needed to effectively address vacant, abandoned, and deteriorated properties, see Equitable Revitalization.

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-Center for Community Progress 

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WHAT KINDS OF PROPERTIES DO LAND BANKS ACQUIRE?

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Most land bank acquisitions are vacant, residential, tax-delinquent properties. In addition to tax foreclosed parcels, land banks can acquire Real Estate Owned (REO) properties and receive private donations and public land transfers. Although most properties are typically vacant residential single-family homes or vacant lots, land banks also acquire multifamily dwellings, commercial and industrial properties, and in rare cases, occupied rental properties. In fact, some land banks even have well-developed brownfields programs through which they acquire large scale, formerly industrial properties.

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-Center for Community Progress