[Editor’s Note: Last Wednesday, Pennsylvania’s governor signed land bank enabling legislation, opening the way for the state’s communities to create land banks to take a more strategic approach to dealing with their vacant properties. This is particularly exciting for Philadelphia, where advocates have been laying the groundwork for a citywide land bank, and particularly one that will partner with local community-based organizations like the new Community Justice Land Trust. We at NHI helped organize panels last year in Philly and at both the land bank and land trust annual conferences this year about the potental for partnerships between these two kinds of organizations, so it’s a perfect time for us to have gotten this post from John E. Davis making a call for just that kind of partnership.]
Land banks and land trusts are frequently portrayed as competing strategies for securing control over abandoned lands and derelict buildings, but I contend they are complementary. Each strategy performs better if developed and operated in partnership with the other. What a land bank does best is what a land trust does worst – and vice versa. Each has a problem the other can fix:
Land banks have a disposition problem. Land trusts have an acquisition problem.
A majority of the land banks being developed today are public or quasi-public corporations controlled by a city or county government or coalition of governments under a state enabling act. The real estate they acquire is typically held for a period of three to five years. After removing contaminants, clearing title, and readying sites for redevelopment, a land bank’s properties are conveyed to private owners, usually with few (if any) contractual restrictions on future pricing or long-term use.
Community land trusts (CLTs) are nonprofit corporations, created and controlled by neighborhood residents. Land acquired by a CLT is retained by the CLT forever. Buildings are sold off to other nonprofits, limited partnerships, small businesses, or individual homeowners. The owners of these buildings gain exclusive use of the underlying land through a long-term ground lease. Embedded in the lease are restrictions on the use and resale of the buildings, granting the CLT a durable right to regulate how they are occupied, operated, and conveyed.
Solving a Disposition Problem
Most land banks consider their work to be done once properties have cycled through the land bank laundromat. What happens after their return to private ownership is typically outside the land bank’s purview. Affordability is left to the whim of the marketplace; upkeep is left to the whim of the new owners; occupancy is dependent upon the owners’ ability to meet monthly mortgage payments.
Future use of these properties is usually beyond the land bank’s reach as well. Mixed-income housing or mixed-use buildings may have been the plan for lands released from the land bank’s inventory; and these projects might have actually been built. Years later, however, if the neighborhood improves and real estate values rise, lower incomes and lower-income uses are likely to be squeezed out. Few land banks anticipate a day when their own efforts may have made it impossible for persons and enterprises of modest means to remain on lands that were previously banked. Even fewer land banks anticipate a day when rampant foreclosures and deferred maintenance may erode a neighborhood’s stability, should real estate values collapse. Land banks plan for reuse. They seldom plan for success – or for market failure.
Community land trusts do both, casting their eyes much farther down the road. Anticipating future fluctuations in the economy, CLTs make a long-term commitment to the counter-cyclical stewardship of lands and buildings that come under their care: preserving affordability; promoting sound maintenance; intervening, if necessary, to prevent foreclosures; and perpetuating the original mix of incomes and uses.
This longer horizon makes a CLT the perfect complement to a land bank, whose own timeline for holding and releasing property is relatively short. The disposition problem that plagues most MLBs can be cured by partnering with a CLT, or with another nonprofit making a similar commitment to the lasting stewardship of properties leaving a land bank’s hands.
Solving an Acquisition Problem
This may also cure a chronic affliction of CLTs. Community land trusts have an acquisition problem. They do a good job of sheltering lands, homes, gardens, stores, and facilities brought beneath their protective umbrella, but they do a poor job of building that portfolio in the first place. Without access to monies and powers made available to land banks, most CLTs have remained small. Few have managed to acquire enough lands and buildings to transform the neighborhoods they serve. They have not gone to scale.
Land bank/land trust partnerships would be a game changer. Were CLTs to become favored recipients of properties released by land banks, the principal impediment to CLT expansion would be removed. With fewer worries about finding their next piece of property, moreover, a greater proportion of a CLT’s energies and resources could be devoted to what a CLT does best: stewardship.
I am not alone in seeing land banks as a possible acquisition mechanism for land trusts. Dan Kildee, founder and former president of the Center for Community Progress, had this to say at a symposium held in Philadelphia last year:
“Imagine the relationship between a land bank and a CLT, when the land bank can say to itself and to the community, our first priority for the use of this land is to support the mission of our land trust in trying to achieve its goals. Rather than exposing a property first to public auction, then after the scavengers decide they don’t want it and then make it available, we can take any property that comes in and say the first priority for the use of this land is to go to that CLT and see if that fits their mission – or we can assemble land for the CLT for its ultimate disposition.”
There are already cities where a municipal agency or land bank authority has released publicly owned lands to a local CLT for redevelopment. To date, this has happened only on a case-by-case basis, however. Still largely untried is a more formalized, standardized relationship, where properties flow regularly and predictably from land bank to CLT, solving the disposition problem of the one and the acquisition problem of the other.
Atlanta may be the place where such a partnership receives its first true test. The City of Atlanta-Fulton County Land Bank Authority and the Atlanta Land Trust Collaborative are presently working together to create a property pipeline for the production and preservation of affordable housing in neighborhoods affected by the Atlanta Beltline, the largest TOD project in the United States. Development without displacement is their mutual goal, requiring not only the remediation of derelict sites, but the long-term stewardship of these properties once they’ve been readied for reuse. If Atlanta succeeds in putting these pieces in place, utilizing a land bank/land trust partnership to make the dream of an equitable and sustainable Beltline a reality, it will prove to the rest of the country just how powerful these partnerships can be.
(Photo from Take Back Vacant Land.)
This is a great article! A few thoughts to share.
CLTs that are going to get involved in partnerships with land banks will likely need to consider projects beyond housing, as owner-occupied or rental housing projects may or may not be viable in communities with large amounts of land bank inventory. In cities such as Flint, Detroit, Cleveland, and Youngstown, disposition strategies will increasingly include agriculture and natural areas restoration.
If CLTs want to be good partners for land banks, they will need to think more broadly about the types of partnerships they could be involved in. The greatest strength of the CLT model is its flexibility — which is ideally suited for these sorts of collaborations.
I’m new to the conversation but I’ve been intrigued by Community Land Trusts for a number of years. CLT’s are not only for low-income homeowners but the middle class who’ve been squeezed out of the market and fallen into foreclosure. As a member of this “class” growing up I never knew anyone who lost their home to default. As it stands now, home ownership isn’t wealth building but buildings only for the wealthy. This is the first time I’ve heard the term “land bank” and how this entity is structured. I don’t understand why local/state/regional governments spend taxpayer dollars to “clean up and rehabilitate” land that will fall into private ownership who will then potentially decimate, pollute, and destroy what our taxpayer dollars cleaned up. These government entities need revenue and, therefore, are selling to the highest bidder. The tax code is another issue as the wealthy purchase land for depreciation. Therefore, there isn’t an incentive to improve the land as they will be taxed on these improvements. I like the idea of “land banks” and “community land trusts” as a partnership for stewardship, environmentally sound practices, and perpetual affordability. The question may be how can the government recoup money spent on the clean up without “selling out” to the highest bidder? What incentives do the CLT’s offer to the government to allow this partnership to succeed?