LAND BANK 101
What is a Land Bank?
Land banks are a mechanism for acquiring, holding, and distributing property in service of community goals. A land bank can benefit communities as it facilitates neighborhood revitalization and home affordability by returning vacant, abandoned, and tax-delinquent properties to productive use.
How do land banks work?
In addition to posing fire and safety hazards, generating crime, and devaluing the property values of surrounding homes, abandoned, vacant, and distressed properties often have a low market value. Liens, title defects, and other liabilities may prevent conventional for-profit developers from acquiring or redeveloping these properties. However, land banks can help local governments acquire and repurpose these properties. As a result, property values improve, tax revenues are generated, and more affordable housing is available to the general public.
What do they do?
To meet the needs of a community, land banks acquire, hold, manage, and distribute residential, commercial, and industrial properties. Land banks are typically local entities that can help address the need for affordable homes and spur the local economy.
How is a land bank established?
Land banks are established in a two-part process. First, a board of county commissioners, or county council, passes a resolution authorizing the establishment of a land bank. Second, the County Treasurer, or Fiscal Officer, files Articles of Incorporation with the Ohio Secretary of State. After incorporation, the board of commissioners, or county council, approves the corporation's operating documents, known as the Code of Regulations. After this is approved, the land bank's board of directors are appointed and are responsible for governing the organization and hiring staff.
Who controls a land bank?
Land banks are not part of county government. Instead, land banks are independent nonprofit corporations governed by a board of directors comprised of county, municipal, township, and other community leaders. Under Ohio law and in Summit County, the board of directors of a land bank must include the Summit County Executive, Summit County Fiscal Officer, a representative of County Council, a representative of the largest municipality, and a township representative. Land banks may operate with five, seven, or nine members.
How does a land bank acquire property?
Land Banks acquire property in several ways, including purchase, donation, and tax foreclosure. The expedited tax foreclosure process allows the direct transfer of tax-foreclosed properties to land banks. Lending institutions may transfer low-value properties to land banks, sometimes providing funds for rehabilitation or demolition. In some cases, the U.S. Department of Housing and Urban Affairs (HUD) may also transfer low-value properties to land banks. Private individuals and probated estates no longer wanting the burden of owning property may donate property to a land bank. Land banks also have the authority to purchase or lease property.
How is a land bank funded?
County commissions or County Council can elect to increase the county’s delinquent tax and assessment collection (DTAC) fund to provide a land bank with operating income. The County Treasurer, or Fiscal Officer, may make special advances of late payments of first-half taxes and/or newly delinquent taxes with the associated penalties and interest allocated to a land bank. The county can authorize the use of tax delinquency anticipation notes (DTANS) to fund a county land bank. Additionally, the county land bank can borrow money, receive money through the sale of land, and obtain funds as a state, federal, or other grant applicant or co-applicant.
What are the benefits of a land bank?
County land banks help communities stabilize the property tax base and assist in reducing, and eliminating, abandonment, vacancy, and blight, and support the orderly redevelopment of neighborhoods. County land banks serve as a resource for communities.
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