It’s clear that a coordinated, broad-scale strategy to target distressed areas and stabilize them en masse will be necessary to turn the tide of decline. Land banking is a key tool that can help structure a neighborhood recovery strategy. A Cook County Land Bank that would begin as a pilot in south Cook County, championed by Commissioner Bridget Gainer and supported by Board President Toni Preckwinkle, will soon be considered for approval by the Cook County Board of Commissioners. We believe that a Cook County Land Bank would help attract responsible investors to hard-hit areas, ensure that economic recovery supports community priorities, and make neighborhoods impacted by foreclosures more attractive and secure places to live.
What, exactly, is a land bank and how would it help accomplish neighborhood stabilization goals? A land bank is a public redevelopment authority that typically targets distressed areas by facilitating the acquisition, management, development, and transfer of vacant properties and land. There are nearly 80 land banks operating across the country, some with many decades of experience. Land banks have made a major impact on the vacant property inventories in their communities. For example, in Genesee County, Michigan (home of Flint), the land bank was able to acquire more than 10,000 parcels between 2002 and 2011. The Genesee County Land Bank has preserved historic buildings, demolished distressed buildings, maintained and developed tax-foreclosed property, and cleaned empty lots. During the recession, the Genesee County Land Bank has spurred more than $60 million in private investment.
In Cook County, a land bank would have a number of tools at its disposal to acquire, hold, develop, and sell property—particularly distressed, relatively low-value property. The land bank could acquire property by receiving a transfer of property from the government, receiving donations from financial institutions, purchasing properties, or offering no-cash bids at the scavenger sale (where delinquent property taxes are sold).
After acquiring the properties, the land bank could employ a number of strategies to make the properties more attractive to outside investors as well as ensure that the redevelopment meets community needs. As the Center for Community Progress puts it, “a land bank gives a community the opportunity to take a ‘deep breath’ before deciding the fate of a tax-foreclosed property, rather than allowing each parcel of vacant land to fall into the hands of speculators who spread the infectious disease of blight.” The land bank could hold property tax-free for a number of years, during which time it could abate delinquent taxes, clear title, bring the properties up to code, and demolish buildings that have become nuisances. If a developer is interested in a large-scale project that involves several parcels of land with disparate owners, the land bank can help assemble these properties. After the properties have been stabilized, the land bank will market the properties to third party investors or municipalities.
Take the case of the fictional block below. Only two homes on a block of eight homes are occupied. Two homes have been through foreclosure and are bank-owned, one is in the foreclosure process, one has delinquent taxes, one is long abandoned and badly deteriorated, and one is owned by an absentee investor who has not maintained the property. A land bank could target and stabilize this block by arranging for the large bank and the small bank to donate their properties to the land bank, purchasing the home in the foreclosure process at auction, abating the back taxes on the tax delinquent home, demolishing the distressed home, and purchasing the home from the investor. The land bank can now rehab the five homes it has acquired and market them to individual homeowners, scattered-site rental property managers, or other outside interests. As for the home that was demolished, the land bank could arrange a sale of the lot to the owner of the adjacent home, who wants extra yard space for their children.
While many great efforts to remediate vacant homes have been underway in Chicago, none have enough resources to redevelop at a scale that matches the scale of the foreclosure crisis. A land bank could help increase rehab activity to a level that staunches the deterioration of neighborhoods negatively impacted by foreclosure and abandonment. We urge the Cook County Board of Commissioners to support this proposal.