County Land Bank
Source: 2004 Kirwan Institute for Study of Race & Ethnicity, Ohio State University.
Q: What is a land bank?
A: A public authority which holds, manages, and develops tax-foreclosed property.
Q: What does a land bank do?
A: A land bank acts a legal and financial mechanism which enables a government agency to revitalize neighborhoods by rehabilitating abandoned, vacant, or tax foreclosed properties. A land bank is a powerful tool which encourages redevelopment and investment from commercial and private initiatives. These initiatives take place in areas which have often been overlooked due to their negative equity based upon real estate values and assessments.
Q: What is negative equity?
A: Negative equity occurs when the value of a home is used to secure a mortgage is less than the cost of the loan. It is highly unlikely that these homes will be approved for any mortgage and only available to cash buyers only.
Q: Is this a short or long term fix?
A: Both. A land bank will provide fiscal benefits that are short term; it is also a long term planning tool for community development by revitalizing blighted neighborhoods and encourage investment into overlooked areas which support community growth long term.
Q: Why have a land bank?
A: Land is one of the major assets contributing to the success of a local community and economic development. A land bank must be properly managed to ensure it improves existing land use, quality of life within communities, and supports local community development. Abandoned properties and vacant land do not produce viable revenue for our County Government which derives a considerable portion of its revenue upon real estate tax. Vacant and blighted properties discourage investment, decreases property values, and promotes high crime and other health hazards. Ultimately, the lack of tax revenue greatly affects our County’s ability to maintain programs and services which make a difference in the lives of our residents.
Q: Why is having a land bank important?
A: The impacts of blight within communities are the high costs associated with fire, police, EMS, and other maintenance services a government body must provide to protect the public from health hazards required by law.
The U.S. Fire Administration reports that over 12,000 vacant structure fires are reported each year in the U.S., which results in $73 million in property damage annually. (Vacant Properties and Smart Growth: Creating Opportunity from Abadonment, 2004)
Abandoned properties attract crime. A 1993 study of 59 abandoned properties in Austin, Texas, found 34 percent were used for illegal activities and of the 41 percent which were unsecured, 83 percent were used for illegal activities. (de Wit, n.d.) Crime creates an increased strain upon our Police, Judicial, Criminal Justice, and Re-Entry Services Systems.
Abandoned and blighted structures force our local government to spend tax dollars to clean and maintain the properties to avoid major public health hazards.
From 1999 to 2004, St. Louis spent $15.5 million to demolish vacant buildings. (de Wit, n.d.) Detroit spends roughly $800,000 per year to clean vacant lots. (de Wit, n.d.) These vacant lots cost the local government money and equate to less tax dollars available to support our tax base.
Abandoned property has the potential to destabilize neighborhoods causing residents to become concerned about decreasing property values and the increased likelihood of little to no return on their home investment causing an outward migration to other areas.
A Temple University study suggests, all things being equal, the presence of an abandoned house on a block reduces the value of all the other property by an average of $6,720. (de Wit, n.d.)
Q: What are the benefits of a Land Bank?
A: A land bank is a mechanism which allows for “upside down” properties to be acquired and transferred into a usable property which will increase value within a neighborhood and encourage other investments for long term community growth and development. This newly generated growth can have rippling effects throughout a community in terms of improving tax revenues, public housing, school improvements, decreases public safety hazards and other drains on public services.
Q: What will Brenton Davis, Erie County Executive do to implement these Land Banks?
A: As County Executive, I will utilize my professional real-world experience as a General Contractor having completed thousands of government, commercial and residential projects across the United States, along with the lessons learned during my MBA coursework focusing on Community and Economic Development to create a multi-pronged, comprehensive program to aggressively combat blight – and eliminate it!
We will acquire abandoned/blighted properties and incorporate the various work programs; prison work programs, occupational training programs for transitioning clients, high school Co-op work programs, and County trade school programs across Erie County to rehabilitate these properties while providing invaluable education opportunities for Erie County residents. We must ensure that we mass the effects of our efforts within each program to make the greatest overall impact; through this initiative, we will eliminate blight, raise property values, increase investment within our communities, increase our tax revenue base, improve our schools, reduce the costs associated with crime and incarceration while providing educational training and real world, hands-on work experience to prepare our participants for jobs that actually exist.
Q: How do you plan to fund this Initiative?
A: Under my Administration, we will aggressively pursue Federal and State grants. To name a few, the Community Development Block Grant Program (CDBG); Neighborhood Stabilization Program through HUD, The Redevelopment Assistance Capitol Program (RCAP) whic will provide re-imbursements for capital invested, promoting job creation and increased revenues through the Commonwealth of Pennsylvania Governor’s Office. We will leave no stone unturned when it comes to the acquisition of redevelopment funds.
Ultimately, the proceeds of each of these projects will be reinvested within the program itself to defray the material costs, permits, and inspection fees. Erie County will acquire these properties at little cost through the land bank, provide the necessary materials, and complete the renovations with work program participants from the Erie County Prison, County Vo-Tech School, High School Co-op residents within the trades.
We will invest redevelopment funds to purchase properties, provide materials, and incur a very minimal labor cost investment as compared to a private investment project. Erie County will be able to provide cost effective training opportunities for our youth and transitioning students while providing a valuable community service.
MORE LEADERSHIP, LESS POLITICS!