Land banks are governmental entities that acquire vacant, abandoned, and tax delinquent properties to return them to productive use and stabilize distressed markets.
Vacant and abandoned structures have challenged cities for generations. The first land banks were established throughout the 1970s to 1990s in an effort to address the vacant properties left behind as a result urban abandonment. These passive organizations held relatively little power compared to the land banks of today.
During mortgage crisis of 2008, many people lost their homes due to foreclosure, and vacancy rates soared as homes sat abandoned and blighted. The mortgage crisis hit small and large cities alike, leaving communities with large numbers of vacant homes and few resources to address them. As a result of this growing problem, many state and local governments increased the power and capabilities of their land banks. Many states such as Ohio have enabling legislation that grants land banks more power to acquire properties that are either undesirable or unattainable by the private market. As of August 2015, the following eleven states have passed comprehensive state-enabling land bank legislation:
- Michigan (2004)
- Ohio (2009)
- New York (2011)
- Georgia (2012)
- Tennessee (2012)
- Missouri (2012)
- Pennsylvania (2012)
- Nebraska (2013)
- Alabama (2013)
- West Virginia (2014)
- Delaware (2015)
While some properties in the land banks’ inventory may be sold for rehabilitation, many land banks have elected to demolish the worst-of-the-worst properties in their communities – opening up the door for more opportunities for redevelopment. Federal and state grant programs exist to help fund these demolitions.
For more information on the basics of land banks, visit The Center for Community Progress. Additionally, Greater Ohio Policy Center has produced a comprehensive guide to understanding land banking and the enabling legislation in Ohio. While most useful to those in Ohio’s communities, the report also contains valuable information on general land banking strategies.
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