Impact on hamilton/Middletown
Butler County had a more than 500 percent increase in foreclosures from approximately 500 foreclosures filed a year in 1999 to more than 3,000 each in 2009 and 2010, according to Thriving Communities Institute. Many of the foreclosures turn into blighted homes. A majority of these properties are located in Hamilton and Middletown.
Efforts by Hamilton and Middletown to raze abandoned homes or blighted properties could take a step forward if the county agrees to form a land bank.
With state money on the line for property demolition, forming the land bank in Butler County has become an urgent issue.
The biggest concerns about the county forming a land bank had been about creating more bureaucracy, the impact on school districts and taking tax money from parts of the county that are less affected by foreclosures, said county government officials.
Land banks are often funded by penalties paid on delinquent property taxes.
However, a new plan is to form a land bank and have the communities that benefit pay for it, said county Treasurer Nancy Nix. The county would not fund the land bank at this point, but would establish the organization, if commissioners vote to create one, she said.
County commission will discuss the issue today.
The hurry is to meet a deadline of June 30 to apply for state funding. The Ohio Attorney General’s office has made available a total $75 million for property demolition. The $75 million comes from Ohio’s share of a national mortgage settlement for foreclosure abuse reached this year with the largest mortgage servicers. A first round of demolition money is available to local counties to apply for with an amount dedicated to each Ohio county based on its foreclosure filings during 2008 to 2011.
But to get the approximately $2.7 million Butler County is eligible for, the county has to have a land bank or other lead entity apply and it has to match all money past the first $500,000. Forming a land bank to go after the money is the best way because a land bank, or a County Land Reutilization Corp., clears properties of titles and taxes, Nix said.
Hamilton and Middletown, the hardest hit by foreclosures, have both passed resolutions to support a county land bank and met with county officials last week to discuss the issue.
“I think we have blight issues to be addressed. This is the tool being used,” Nix said. “It seems like we need to be at the table with a land bank.”
This approach acts as an incentive for the cities to prove the land bank to be successful. It can be discussed again in the future if the land bank should be funded by penalties collected on delinquent property taxes, she said.
All county communities, not just Hamilton and Middletown, could be eligible to get some funding if they’re willing and able to make matches, Nix said.
A County Land Reutilization Corp. is a quasi-public, nonprofit organization that can acquire vacant, abandoned, tax-foreclosed or other real property for rehabilitation and reuse.
Butler County has had a more than 500 percent increase in foreclosures from approximately 500 foreclosures filed a year in 1999 to more than 3,000 each in 2009 and 2010, according to Thriving Communities Institute, a nonprofit focused on these issues. The county had in 2010 a total 12,313 residential vacant housing units, according to Census data.
Vacant and abandoned buildings attract criminal activity, don’t generate property taxes and lower the value of surrounding properties, further decreasing the real property tax base, according to a policy discussion paper on land banks for the Federal Reserve Bank of Cleveland.
Commissioner Don Dixon said he thinks the new plan for the cities and townships to pay is a good compromise.
“There will be no county tax dollars per se. The day to day operations will be the responsibility of each city. We’re acting as a facilitator to really handle the money,” he said.
Commissioner Chuck Furmon has always supported a land bank. He said the plan is doable.
“I think the municipalities need it more than the county does, but we’re willing to work with them. As far as I’m concerned, we’re happy to do our share,” Furmon said.
Joshua Smith, city manager of Hamilton, said this is an “absolute priority.” Hamilton will most likely use a mix of general funds and grant money to match the demolition funds, he said. Demolishing properties especially benefits Hamilton’s more traditional neighborhoods hit hardest by the foreclosure crisis, he said.
“German Village, Dayton Lane, Rossville, our historic second ward that definitely needs those dollars to eliminate the blight that has become more noticeable in the past four to five years,” he said. “The problem is if the blight goes unchecked, good houses turn into bad houses in a couple of years because people give up.”
More details still need ironed out, as Doug Adkins, Middletown community revitalization director, pointed out.
“How much the council is willing to match again depends on what is available under what time period and what match is required in what time frame. Butler County could get up to approaching $2.7 million, but we don’t know if they will receive all of the allotment or not. Once the amount is set for the county, the county will need to distribute it to the local jurisdictions,” Adkins said.
Forming a county land bank, rather than the city doing it alone, saves time and money, he said.
“To perform that as a city, we have to either in-house or through outside counsel clear the title problems ourselves and pay delinquent taxes to clear the land for re-use.”
Contact this reporter at (513) 705-2551 or clevingston@coxohio.com. Follow this reporter on Twitter @ChelsLevingston
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