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Blight Fighters Tout Impact of New York Land Banks

(Credit: Chautauqua County Land Bank)

Crumbling houses with cracked windows and boarded-up doors aren’t just ugly — they’re surprisingly expensive. From law enforcement costs associated with crime, particularly theft, around vacant properties to sagging property values, foreclosures that have fallen into disrepair can ripple through the finances of public and private coffers alike.

Land banks are one solution when it comes to revitalizing such real restate, and as Jen Kinney wrote for Next City last year, cities from Cleveland and St. Louis to Buffalo and Syracuse are utilizing them to manage vacant properties. (Rules around land banks vary, but generally, a municipal agency or nonprofit is shepherding vacant properties back into use.)

In New York, Governor Andrew Cuomo signed a law allowing land banks in 2011. A new report from the New York Land Bank Association (NYLBA) details and quantifies some of the work that’s been done by the state’s land banks in their first five years of operation. Currently, 20 are up and running. According to research by the Center for Community Progress, cited in the report, there were about 170 land banks or land banking programs across the U.S. in 2016. New York ranks third among states with the highest number after Ohio and Michigan.

Their need became sadly apparent after the Great Recession — but population loss in smaller cities and towns had been an ongoing story for at least 50 years.

“This significant market imbalance of supply and demand for housing is a key reason why many New York communities have wrestled with large inventories of problem properties for decades,” the report states. “And it’s under these weak housing market conditions when other barriers and challenges, legal and functional, become more obvious and onerous.”

In New York, land banks must be nonprofit organizations “formed by local government and subject to further oversight by public authorities law.” Most of their funding comes from the New York Attorney General’s Office. And according to the new report, those funds have been put to good use.

(Credit: New York Land Bank Association)

Through the first 10 land banks created, 1,989 “problem properties” have been acquired. Of those properties, 651 have been sold to private individuals or nonprofit partners, 482 unsafe or dilapidated properties have been razed, and 400 structures have been renovated or stabilized. Cumulatively, those land banks have leveraged about $77 million in private investment and returned $28.4 million to local tax rolls.

But the report emphasizes that those dollar signs don’t paint a complete picture of just how much revitalization land banks add to community value. That goes back to all those public and private costs, in safety and neighborhood value.

“For every problem property acquired, maintained, and then returned to the private market for productive use, that is one property that no longer generates these external costs and liabilities,” the report states.

There are also equity factors at play.

“Most of this work occurs in many of our most distressed neighborhoods in New York, and these investments signal to residents — who for too long might have felt left behind — that they deserve healthy, safe, and vibrant neighborhoods,” the report’s authors wrote.

Going forward, NYLBA wants to see New York land banks finding a “recurring, reliable source of funding.” In Ohio, for example, a law authorizes county treasurers to redirect 5 percent of all excess penalties and interest generated by delinquent taxes to their county land bank. One land bank in Cuyahoga County receives $7 million annually from the program.

It also wants to see land banks move from “the fringe to the center of community development.”

From the report:

Given their intense focus on trying to resolve the inventory of problem properties the last few years, land banks have emerged as the state’s leading experts in the systemic causes of vacancy and blight. Working in collaboration with many different partners, land banks have helped officials and residents gain a deeper understanding of: how robust, integrated parcel data systems are key to driving decisions; how the strength of a neighborhood’s housing market and local planning goals should inform reuse decisions; and how the two key preventative systems, code enforcement and property tax enforcement, can introduce inefficiencies and inequities that actually contribute to vacancy and abandonment. By virtue of this work, land banks are helping not only to build a common understanding of how the status quo is broken, ineffective, and costly, but also to shape consensus among a diverse cross-section of stakeholders and policy makers on creative solutions and bold new approaches to address vacancy and blight.

As Next City has covered, that focus on integrated data systems could be tremendously helpful to the community development sphere. Earlier this year, Oscar Perry Abello explained just how fragmented the process of getting a foreclosed home rehabilitated in New York can be:

The department of finance uses one filing system to track tax liens, the utilities providers use another, the building code enforcement uses another, the housing authority uses another, and the police department uses another. The data needed to target resources more strategically is already out there, but there’s no way to line up everything all in one place to find properties most likely to fall into the duplex situation above and perhaps divert them into rehabilitation and community development programs.