Among the more progressive policies in the appropriation of vacant, abandoned and tax delinquent parcels is land banking, accomplished often through a city ordinance mandating that properties that remain vacant and in neglect for a specific number of years, can be appropriated by the city, often through property tax foreclosure, and placed back into productive use. Today, as a result of the sudden growth of the model since 2011 (in response to the foreclosure crisis), there are over 172 land banks across the country. Land banks usually take the form of a quasi-public entity, sometimes run directly out of a specific city department, or they can be structured as independent entities, either as corporations or non-profits.
Land banks have been around for about as long as community land trusts (CLTs). They also have a long and independent practice and history, and as a result, present a complementary and powerful strategy in creating permanently affordable housing. To date there are very few partnerships between land banks and CLTs, however more recently, both policymakers and CLTs are realizing that such a partnership may have advantages in overcoming challenges for both models. In 2016, The Albany Community Land Trust formed a partnership with Albany County Land Bank, which resulted in not only a model for replication, but also a number of insights into best practices. Two key points were emphasized in the 2017 Report on the ACLB-ACLT Partnership on why land banks and CLTs are complementary strategies:
- “While both entities acquire and hold land, they do so for varying periods of time and for different purposes, acting at different times in the development process. By exercising their special powers, land banks can efficiently and cost-effectively acquire tax foreclosed properties with a goal to return to productive use… CLTs, on the other hand, acquire properties with a goal to retain and steward in perpetuity, with a primary goal of ensuring permanent affordable housing choices through the use of shared equity homeownership models and other enforcement tools.”
- Land banks are not only good for cold or “dry” real estate markets, where vacant land is plentiful, but also for “hot” markets where vacant properties are scarce because they channel land resources to meet critical community needs for affordable housing. Contrary to common sense, CLTs are also important in “dry” markets because they bring investment into distressed neighborhoods helping with revitalization and creating affordability as that particular market recovers.
In these two ways, landbanks and CLTs are complementary entities at different points of the development process, and in addressing both cold and hot markets. While a land bank can acquire parcels for development, it has no interest in stewarding them long-term, and while a CLT may not have the resources to acquire vacant land for development, it has the capacity and tools for their long-term management. Land banks paired with CLTs can work together to revitalize neighborhoods in cold markets to prevent displacement and to preserve scarce housing for permanent affordability in hot markets.
Furthermore land banks face a number of challenges in redirecting vacant, abandoned and tax delinquent properties to productive use, which CLTs could help them to overcome. These challenges are well documented by Frank Alexander in the form of several barriers such as: the complexities of removing a property from tax delinquency, inadequacy of code enforcement, problems of tracking down unknown owners, and serious rehabilitation issues often presented with neglected properties.
A collaboration between CLTs and land banks could overcome some of these challenges by:
- Sharing information: CLTs and relevant city and county departments could pre-emptively identify properties in distress, or heading towards distress, before years go by and the complexities of debt, delinquent taxes, and code violations deepen, making it impossible to land bank the property. Information can be shared from several sources such as on-the-ground information collected by CLTs, city departments, and public records on property tax pay rolls, data on vacancies, and code violations cited.
- Enforcing code violations: In addition to sharing on the ground information, and by investigating and updating public records, potentially leading to citing code violations early on, CLTs could also follow up on citations issued by the city. Often city staff does not have the resources to follow-up to see whether or not the owner responded and corrected the violations. Other times the property owners themselves lack the resources to correct violations A CLT could follow up and offer assistance to survey the options available to the owners: foreclosure, city purchase of the property, or direct CLT purchase of the property.
- Rehabilitating land banked properties: CLTs deal almost exclusively in the preservation of smaller buildings between 5-25 units. They are an ideal non-profit housing developer to assist cities in rehabilitating land banked properties and place them back into productive use as permanently affordable housing. Cities may lack the resources to rehabilitate these properties exclusively with public subsidies, a CLT can combine public subsidies with private loans from community lenders at favorable interest rates to cover rehabilitation costs.
- Community driven revitalization of neighborhoods: In areas where vacant and abandoned land is plentiful, in certain concentrated pockets of a city, land banks and CLTs can collaborate to rethink block-wide revitalization using a bottom-up community driven approach. This was the approach taken in the partnership between the Albany Community Land Bank and Albany Community Land Trust in their conceptualization of “Breathing Blocks.”