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Land banking will revitalize our housing market


MARCH 22, 2010

Land banking will revitalize our housing market

The following opinion article written by Wade Kapszukiewicz (Lucas County Treasurer) and Joshua Murnen (ABLE attorney and Equal Justice Works fellow) appeared March 22, 2010 in the Toledo Free Press. Read below or view on the Free Press Web site.

In December, the Ohio House of Representatives passed bipartisan legislation that will allow Lucas County to create a land bank to help restore our local housing market. With a vote of 83-14, House Bill 313 passed with a resounding supermajority, a rare example of broad political consensus in an era marked by partisanship and legislative gridlock. Now the Ohio Senate has the opportunity to approve this bill for Gov. Strickland to sign. If it does, Lucas County will have the opportunity to use an extraordinary new tool to bring positive change to our region.
 

MARCH 22, 2010

Land banking will revitalize our housing market

The following opinion article written by Wade Kapszukiewicz (Lucas County Treasurer) and Joshua Murnen (ABLE attorney and Equal Justice Works fellow) appeared March 22, 2010 in the Toledo Free Press. Read below or view on the Free Press Web site.

In December, the Ohio House of Representatives passed bipartisan legislation that will allow Lucas County to create a land bank to help restore our local housing market. With a vote of 83-14, House Bill 313 passed with a resounding supermajority, a rare example of broad political consensus in an era marked by partisanship and legislative gridlock. Now the Ohio Senate has the opportunity to approve this bill for Gov. Strickland to sign. If it does, Lucas County will have the opportunity to use an extraordinary new tool to bring positive change to our region.

It is no secret that Toledo has a vacant property problem. Tax delinquency is among the earliest warning signs that a home is at risk of becoming vacant. Out of town land speculators often purchase tax foreclosed homes without ever seeing them in person. These homes are then allowed to languish and deteriorate, becoming boarded up nuisance properties and contributing to further market decline. More properties become caught in the vicious cycle of tax delinquency, vacancy, and speculation.

Any property caught in this cycle functionally exits the market, and becomes a market hindrance. This process has taken place in virtually every older industrial city in the Midwest and Northeast, and stricken communities have struggled to find a tool to effectively address the problem.

Enter land banking. House Bill 313 allows for the creation of county land banks that can acquire vacant properties that fall into tax foreclosure before they enter the cycle of speculation and deterioration. While land banking has been around for some time in various forms, this new “active” model has the ability to proactively acquire abandoned properties, rather than acting as a passive conduit for donated parcels. Properties that are acquired will be maintained until they can be redeveloped and returned to the market. Homes that are beyond saving can be demolished, and the land held for future development. This process can catalyze revitalization in Toledo’s declining neighborhoods.

Active land banking will not burden Ohioans with new taxes. Lucas County’s land bank would be financed in part by existing penalties from tax delinquencies that under prior law would have gone toward collection of future delinquencies. Early estimates predict re-channeling these funds would provide a Lucas County land bank with nearly $1 million annually, an excellent reinvestment that would yield huge returns through higher property values. The land bank would also have the ability to apply for competitive grant money. The Cuyahoga Land Bank recently announced it will share in a $40 million federal Neighborhood Stabilization Program grant, the largest award of its kind in Ohio.

Active land banking has already proved indispensable to market restoration in communities that have experienced population loss and disinvestment. Flint, Mich., had served as the poster child for post-industrial decline for decades. Devastated by the departure of auto manufacturing jobs, Flint’s population plummeted from its peak of nearly 200,000 in 1960 to an estimated 113,000 in 2008, a 44 percent decline. Many of its neighborhoods were left blighted and abandoned, and Flint’s name became synonymous with urban decay.

Flint’s elected officials chose to take action. Spurred by the tireless efforts of Genesee County Treasurer Dan Kildee and members of the Michigan legislature, the Genesee County Land Bank was established in 2002. Through the land bank’s activities, Flint saw the aggregate market value of its properties increase by an extraordinary $112 million between 2002 and 2005, with more than 26,000 individual properties seeing an increase in value. This re-found wealth has bolstered home equity, neighborhood stability and Flint’s local economy, as well as Genesee County’s property tax base. Flint demonstrates that land banking can assist the private and public sectors in the creation of new wealth in a once devastated community.

The Ohio General Assembly has already passed legislation allowing Cuyahoga County to create an active land bank. The Cuyahoga Land Bank commenced operations in April, and by August had acquired its first set of abandoned properties. It has experienced tremendous initial successes in its efforts to redevelop Cleveland’s neighborhoods. House Bill 313 would grant the option of starting a county land bank to any Ohio county with a population greater than 60,000, extending this tool to nearly half of Ohio’s counties.

Three Toledo area legislators are among House Bill 313’s primary sponsors and supporters. The efforts of Peter Ujvagi, Mark Wagoner and Teresa Fedor to bring land banking to Lucas County further underscore both the broad bipartisan support for active land banking and the urgent need to utilize it in our region. We need land banking to bring new wealth to Metro Toledo’s residents and property owners, and to bring new life to our housing market and economy.