Closer look: Land banks
What is a land bank? A land bank — also known as a land reutilization corporation — is a public authority or nonprofit created to acquire, hold, manage and develop vacant and abandoned properties. Starting in 2010, a land bank became a tool that counties in Ohio with populations greater than 60,000 may use to address the problem of vacant, abandoned and foreclosed properties that are having a negative impact on our communities.
What are the most powerful benefits of a land bank? Property acquired by a land bank “cleans” the title for redevelopment and removes delinquent taxes and assessments on the property. For those properties that qualify for expedited foreclosure, the process of acquisition can be much quicker so the property does not have as much time to further deteriorate before responsible property owners are identified.
How will the land bank be organized? A board of seven people will oversee Montgomery County’s land bank. The county treasurer chairs the board and is joined by two county commissioners along with a representative of the largest municipality and a township with a population of 10,000 or more. The final two board members are jointly appointed by the treasurer and commissioners. At least one board member must have experience in private sector or nonprofit experience in rehabilitation or real estate acquisitions.
How will the land bank be funded? The Montgomery County land bank will initially fund its operations through use of the county treasurer’s and county prosecutor’s Delinquent Tax & Assessment Collection funds. County Treasurer Carolyn Rice and county Prosecutor Mathias Heck have pledged a total of $750,000 in startup funding.
Source: Montgomery County Treasurer’s Office
Rocked as hard as any county in Ohio by foreclosed properties, vacant structures and neighborhood deterioration, Montgomery County took a small step Tuesday toward cleaning up blighted neighborhoods.
The County Commission approved creation of the Montgomery County Land Reutilization Corporation, a land bank, which should hasten the return of vacant and abandoned properties to productive uses. The nonprofit, public corporation will acquire low-value properties from foreclosures, banks and private owners and sell them to redevelopers.
“We will start small; and while we know the housing crisis will not be cured overnight, we feel the Land Reutilization Corporation will be an important part of our efforts,” county Treasurer Carolyn Rice said.
Even before the 2008 recession, Montgomery County had suffered from the loss of manufacturing jobs and population. As a result, the county experienced high unemployment, an oversupply of obsolete housing stock and increasing blight.
“The combination of all these factors is negatively impacting property values,” Rice said.
New property values released by Montgomery County Auditor Karl Keith last week based on market sales from 2008 through 2010 found county valuation had fallen by $2 billion, with three out of four homes losing value last year. And, between 2001 and 2010, Montgomery County recorded 44,014 foreclosure filings, according to the treasurer’s office.
The land-banking operation in Montgomery County will initially be funded with $750,000 in delinquent tax and assessment fees from the county treasurer and County Prosecutor Mathias Heck’s office. Office space and support staff will be outsourced through CountyCorp.
Passage of resolutions by the county commissioners Tuesday creating the land bank and authorizing its powers will be followed by filing of incorporation papers with the Ohio Secretary of State.
Rice hopes to start acquiring properties in three to six months.
She believes many owners will want to sign over properties, ending their responsibility for maintenance and future tax liability, but that is not her plan. The land bank won’t randomly gobble up cheap parcels. Under direction of a seven-member board, the land bank will work with jurisdictions to secure properties that already have an interested redeveloper.
“We don’t want to jump in over our heads,” Rice said. “A land bank is not designed for us to hang on to properties long term, because once we own properties we have to take care of them.”
Dayton City Commissioner Nan Whaley said the county’s largest city has already been involved in passive land-banking, such as acquiring properties for sale to neighbors.
“Creating a land bank will allow us to think more long-term on a countywide level,” Whaley said. “This will make the process of acquiring properties easier.”
Ohio law allows counties with populations over 60,000 to create a land bank. Montgomery County is the fifth in Ohio to do so, following Cuyahoga, Lucas, Trumbull and Mahoning counties.
Contact this reporter at (937) 225-2362 or josmith@DaytonDailyNews .com.