Race, Regionalism and Abandoned Properties: How Land Banks Can Promote Regional Equity and Community

1
Race, Regionalism and Abandoned PropertiesHow
Land Banks Can Promote Regional Equity and
Community Development
Keynote address for Smart Growth America April
08th 2005

• john a. powell
• Williams Chair in Civil Rights Civil Liberties,
  Moritz College of Law
• Director, Kirwan Institute for the Study of Race
  and Ethnicity
• The Ohio State University
• http//www.kirwaninstitute.org/

2
Key Questions for Todays Presentation

• What problems are associated with vacant land and
  abandoned property?
• What are the racial implications of this problem?
• What is a policy response to this problem?
• How are land banks beneficial?
• How do land banks fit within the context of
  promoting regional equity?

3
What are the Neighborhood Impacts of Vacant and
Abandoned Property?

• In addition to being neighborhood eyesores,
  research has shown vacant and abandoned property
  have many detrimental community impacts
  including
• Decreased property values
• Reduced tax revenues
• Creating public safety hazards
• Attracting and promoting crime

4
Decreased Property Values

• Homes within 150 of vacant property have been
  found to experience a net loss in value of 7,600
• In Philadelphia, homes on city blocks with vacant
  properties have values than are 6,700 lower than
  identical homes on blocks without vacant
  properties
• A study in Rhode Island found that vacant homes
  decrease property values by over 1.3 billion

Source Creating Opportunities From
Abandonment National Vacant Properties Campaign.
(http//www.vacantproperties.org/)
5
Reduced Tax Revenues

• Abandoned properties remove tax producing
  property from the municipal tax base
• This produces community wide impacts in providing
  public services and supporting schools
• In 2002, delinquent tax revenue cost the City of
  Detroit 95 million in tax revenue and 67
  million in school taxes

6
Threats to PublicSafety

• Vacant structures are highly vulnerable to
  accidental fires because of faulty wiring and
  flammable debris. They are also frequently
  targets for arson. In some cities, fire
  departments simply cannot handle the volume of
  calls concerning fires in vacant properties.
• The US Fire Administration estimated that over
  12,200 fires are reported in vacant structures
  every year, resulting in 73 million in property
  damage annually.
• The National Fire Protection Association (NFPA)
  states that 6,000 firefighters are injured in
  vacant or abandoned building fires every year.

7
Increased Crime

• Research has found illegal use and criminal
  activity to be rampant in vacant properties
• Crime rates on blocks with open abandoned
  buildings were twice as high as rates on matched
  blocks without open buildings.

8
Race and Abandoned Property

• The concentration of abandoned properties in
  inner city areas burdens African Americans with
  the majority of the problems associated with
  vacant land
• Stagnant tax base for public services and schools
• Decreased public safety and higher crime
• Decreasing assets for African American homeowners
• Limited land available for commercial development
• Relationship between sprawl and abandonment

Vacant Property
Sprawl
9
Sprawl and Abandoned Property

• Relationship between sprawl and abandonment
• Sprawl causes abandonment (disinvestment)
• Abandoned properties produce more sprawl
• Two of the nations most sprawling regions have
  the worst abandoned property problems
• Philadelphia
• 1st nationally for major cities, in respect to
  the number of vacant buildings per population
• Detroit
• 2nd nationally for major cities, in respect to
  the number of vacant buildings per population

Source Brookings Institute
10
Disinvestment in Communities of Color

• Decades of suburban flight have drained low
  income inner city neighborhoods of people,
  business and investment
• High vacancy rates and poor investment harms the
  quality of life for inner city residents and
  limits the resources (tax base) for low income
  communities

11
Vacancy and Abandonment Disproportionately
Impacts Communities of Color

• In the Detroit metropolitan area
• The average African American lives in a
  neighborhood where 9 of properties are vacant,
  for Whites this figure is 4
• For the Flint metropolitan area
• The average African American lives in a
  neighborhood with a 12 vacancy rate, compared to
  6 for Whites.
• Similar racial disparities exist in Saginaw,
  Grand Rapids, Lansing, Benton Harbor and
  Kalamazoo
• Vacant properties are concentrated in inner city
  communities, but vacant land is a regional
  problem and has regional impacts

12
Abandonment Produces Impacts Across at Multiple
Levels

• Abandonment not only impacts inner city
  communities of color, but produces impacts on
  multiple levels
• Neighborhood
• Increases crime, creates public safety risks,
  impacts property values
• City
• Hurts tax base and school funding
• Region
• Detrimental to the regions economic health
• Increases the pressure for more sprawl
• Spreading to inner ring suburbs

13
The Dynamics of Race, Space and Abandoned
Properties
14
The Dynamics of Race, Space and Abandoned
Properties
The residential segregation and disinvestment in
inner city communities has burdened African
American neighborhoods with an overabundance of
vacant and abandoned properties and impacts the
entire region.
15
Why havent municipal governments addressed the
vacant land problem?

• Many impediments make addressing abandoned (tax
  delinquent) properties difficult, including
• Presence of multiple taxing bodies that lack
  common policies and goals
• Absence of effective property inspection, code
  enforcement, and rehabilitation support to help
  prevent properties in poor conditions from
  descending into abandonment
• Lengthy and inadequate foreclosure proceedings,
  which may not result in a clear insurable title
• Lack of coordination among agencies and
  departments responsible for enforcement,
  acquisition, and disposition
• Prohibitively high land prices for abandoned
  properties
• Ownership of vacant land by property speculators
• Perception that vacancy is only an inner city
  problem

16
What is a Land Bank and how does a Land Bank
address these Impediments?

• A land bank is a non-profit entity that
  comprehensively addresses the acquisition and
  redevelopment of abandoned (tax delinquent)
  properties
• With the aide of property foreclosure reform, a
  land bank can efficiently dispose of property,
  target redevelopment activities and avoid
  conflicts between multiple taxing jurisdictions

17
Some Land Bank Benefits (in MI)

• The purpose of a land bank is to overcome many of
  the barriers to redeveloping tax delinquent
  properties
• Land banks can also perform functions that are
  outside the traditional realm of municipal
  government
• Waiving unpaid property taxes to promote
  development
• Selling properties at below-fair market values
• Comprehensively redeveloping properties, with a
  focus on long-term community development goals
• Assembly of multiple vacant parcels for
  redevelopment
• Providing clear title for tax foreclosed
  properties

18
Land Banks as a Tool for Community Development

• A successful land bank program can be another
  policy tool for neighborhoods, municipalities or
  regions to effectively address the demand for
  affordable housing, commercial development and
  safer neighborhoods

19
Land Banks Facilitate Change
Five common barriers to the conversionof vacant
and abandoned properties into productive uses.

• Source Alexander, Frank S. Land Bank
  Authorities A Guide for the Creation and
  Operation of Local Land Banks Local Initiatives
  Support Corporation. 2005.

20
Land Bank Functions, Powers, Activities Vary by
Location
Source
Source Alexander, Frank S. Land Bank
Authorities A Guide for the Creation and
Operation of Local Land Banks Local Initiatives
Support Corporation. 2005.
21
A Successful Land Bank Program Can Provide Many
Benefits to Inner City Communities
22
Potential Land Bank Benefits

• Reuse of sites reintroduction of properties onto
  dwindling tax rolls
• Broadening of viable living arrangements across
  income, class and race within the metropolitan
  housing market
• Potential to addresses neighborhood needs with
  local representation and municipal support
• The broader impacts of policy involved in
  creating a land bank are an efficient way to curb
  sprawl, through re-use of land already served by
  the dense infrastructure present in cities

23
What have existing Land Banks Done?

• Land Bank programs are not new and have been
  implemented in many cities across the nation
  most have proven successful in returning
  abandoned properties to successful use

Vacant Property Redevelopment in Columbus, Ohio
BEFORE
AFTER
24
Successful Land Bank Programs Cleveland and
Atlanta

• National experts have identified both the
  Cleveland and Atlanta Land Bank programs as two
  of the most successful programs in the nation
• Both programs target redeveloping properties to
  meet greater community development goals

25
Successful Land Bank Programs Cleveland and
Atlanta

• In Cleveland the Land Bank program works closely
  with community development corporations (CDCs)
  in redeveloping properties
• This enables CDCs to focus resources on
  construction and rehabilitation instead of land
  acquisition costs
• In the first twenty years of existence the
  Cleveland program has produced over 2,700 new
  single family homes on Land Bank properties

26
Successful Land Bank Programs Cleveland and
Atlanta

• In Atlanta, the Land Bank has also been very
  successful in creating housing opportunities
• The Land Bank Authority acts as an intermediary
  between government and community based
  redevelopment efforts, and provides technical
  assistance to developers.
• Often Community Development Block Grant funds are
  coordinated with Land Bank activities
• Since 1994, more than a 1,000 land bank
  properties have been redeveloped in Atlanta

27
What lessons can be learned from existing Land
Bank programs?

• The ability to forgive back property taxes is
  critical
• Alignment with other agencies, institutions or
  programs (ex. CDCs, CDBG) increases the chances
  for success in redeveloping properties
• Land bank redevelopment can be targeted to meet
  community needs (e.g. affordable housing)
• Programs working with long term planning goals
  have more potential for long-term success

28
Two Philosophical Models in Land Bank
Redevelopment

• Fiscal Returns (Go for the money)
• Fiscally driven land bank program
• The traditional approach when municipalities
  address vacant land issues
• Provides provide short-term benefits but may
  results in long term problems
• Community Development (Looking at the big
  picture)
• Planning driven land bank program
• Aligning redevelopment with other community
  development needs
• Strategically redeveloping parcels to maximize
  development potential

29
What is the Appropriate Model?A Planning Driven
Land Bank

• If the primary goal of any disposition effort is
  to return the property to a productive use, the
  disposition of the property must be linked to a
  revitalization strategy. After three years of
  managing the Revitalife Program and from lessons
  learned from other communities, we have come to
  understand that absent a link with a broad
  revitalization strategy, the land bank will have
  far less value than anticipated by its sponsors.
  A land bank should be considered a tool in a
  broader urban revitalization strategy, not a
  complete solution.
• Taken from the Community Revitalization
  Newsletter January 2004. Juergensen Associates
  (Coordinators of the State of Michigans
  Revitalife Program)

30
What is the Appropriate Model?A Planning Driven
Land Bank

• A land banks purpose should be to encourage the
  redevelopment of the city in ways that improve
  the quality of life and add to the economic
  vitality of the city
• The land bank should not be driven by short-term
  fiscal goals, but rather long-term community
  development goals
• Its purpose should not be to make money through
  the sale of land, but return land to the tax
  rolls permanently in a manner that benefits
  neighborhoods and the city as a whole
• To maximize its potential, the land bank program
  requires planning and goals that extend beyond
  short-term fiscal benefits.  The goal of the land
  bank should be community development, which will
  produce long-term fiscal benefits
• Example In St. Louis, initial land bank
  activities focused more on short term fiscal
  benefits of placing land back on tax roles.
  Currently, St. Louis utilizes more of a planning
  based approach to land bank activities.

31
Seizing Opportunity Land Bank Legislation in
Michigan

• The State of Michigan has enacted legislation to
  establish land bank programs in the State
• The Land Bank Fast Tract Legislation
• Creates a state land bank authority
• Enables large cities and counties to establish
  land banks
• Establishes an internal funding system to support
  new land banks
• Enables land bank authorities to expedite quiet
  title of tax reverted properties and make them
  available at nominal prices
• There is no other system in the United States
  that pulls together the ability to quickly
  assemble property into single ownership by the
  county, the tools to manage it, and the financing
  tools to develop that property,
• -Dan Kildee, Genesee County, discussing the new
  fast-track law that his county is integrating
  into its own ongoing efforts, Source Michigan
  Land Use Institute

32
Evidence From a Successful Michigan Land Bank
Program Genesee County (Flint)

• Flint, like many central cities in Michigan has
  an abundance of vacant land and abandoned
  properties

33
Evidence From a Successful Michigan Land Bank
Program Genesee County (Flint)

• Genesee County initiated a land bank program by
  capitalizing on foreclosure reform in 1999
• In its first three years the program captured
  over 3,300 parcels of land
• A foreclosure prevention program has saved almost
  1,000 homes from foreclosure
• Hundreds of dilapidated homes have been
  demolished and dozens of homes rehabilitated
• The program is now coordinating with a
  neighborhood based planning effort to maximize
  redevelopment of sites
• Regional program (City/County cooperation)

34
Why is Genesee Countys Program Successful?

• Planning driven approach
• Addresses what to do with the assemblies in a
  broader community context / planning strategy.
• Proactive engagement
• Policies to avoid foreclosure as well as
  redevelopment
• Government cooperation as an effective vehicle to
  drive the land bank (requires city and county
  cooperation)
• Requiring a more regional approach to the vacant
  land problem

35
Expanding Land Bank Programs in MI

• The success of the Genesee County Land Bank
  program should motivate other cities in the State
  to utilize the Land Bank Fast Tract Acts to
  address the abandoned property issue
• For example, the City of Detroit contains the
  largest number of tax foreclosed properties and
  vacant properties in the State (approximately
  40,000 tax reverted parcels, 90,000 vacant
  parcels city wide)
• A proactive planning driven land bank could be a
  powerful tool to foster community development in
  the City and address both social, environmental
  and fiscal problems

36
Grassroots Activism for a Land Bank Authority in
Detroit M.O.S.E.S.

• Community activists in Detroit have been
  advocating to establish a Land Bank program in
  Detroit
• Metropolitan, Organizing, Strategy, Enabling,
  Strength (M.O.S.E.S.)
• Community Development Advocates of Detroit (CDAD)
• Community Legal Resources (CLR)
• M.O.S.E.S., a congregation-centered, faith-based
  community organization has been working to
  establish a land bank in Detroit for several
  years
• M.O.S.E.S. has advocated at both the
  neighborhood, city, county and state level to
  advocate for Land Bank establishment

37
Grassroots Activism for a Land Bank Authority in
Detroit M.O.S.E.S.

• M.O.S.E.S. interest in the land bank was
  initially spurred by its congregational
  membership who were struggling to address
  abandoned property near their places of worship
• M.O.S.E.S. has tied Land Bank advocacy into its
  broader regional equity initiative and believes a
  Detroit land bank can be used to promote regional
  equity in the Detroit region

38
Lessons Learned in Advocating for a Land Bank in
Detroit with M.O.S.E.S.

• The Kirwan Institute has provided technical
  support to support M.O.S.E.S. in these activities
• Lessons learned
• Involves an educational process
• Technically complex problem, people see the
  problem but must elaborate the connection between
  the problem and land use/sprawl/planning
• Requires extensive relationship building

39
How do Land Bank Programs, or Other Vacant
Property Campaigns Fit into a Regional Equity
(and Smart Growth) Context?

• Land Banks are not just powerful tools for inner
  city redevelopment but can be useful in promoting
  regional equity and smart growth
• How?
• Promoting regional cooperation and problem
  solving
• Addressing the trends of disinvestment inflicting
  inner city communities of color
• Promoting more infill development in urban areas
• Addressing the inequity in tax base and school
  funding in our regions
• Promoting housing opportunities and commercial
  development in communities of color

40
How do Land Bank Programs, or Other Vacant
Property Campaigns Fit into a Regional Equity
(and Smart Growth) Context?

• Land bank programs are another planning tool to
  promote regional equity goals
• Focus does not need to be limited to affordable
  housing
• Land bank redevelopment can be used to develop
  properties into uses that will improve
  opportunity and regional equity
• Mixed income housing, commercial development,
  parks and open space, economic development,
  cultural or educational facilities, public
  services, transit centers

41
Cautionary Note

• Land bank programs are not a silver bullet to
  improving inner city communities of color or
  promoting regional equity
• But, they are a powerful policy tool and can be
  maximized by coordinating with other regional
  equity/redevelopment initiatives
• Affordable housing development, school reforms,
  equitable economic development

42
Concluding Thoughts

• Abandoned property and vacant land
  disproportionately impact inner city communities
  of color
• Land bank programs provide a powerful tool to
  address this problem
• Land banks both remove the problems associated
  with vacant land and disinvestment, as well as
  promote opportunities for reinvestment

43
Concluding Thoughts

• Land bank programs can be established with
  different goals
• Property Tax Recovery (Fiscally Driven)
• Community Development (Planning Driven)
• Planning driven land bank models are more
  appropriate and can deliver more benefits to the
  community as a whole
• Land bank programs are not just an inner city
  issue, they can compliment regional equity
  initiatives and can be a tool to promote a
  regional framework

44
For More Information Visit us On-Line at
http//www.kirwaninstitute.org/