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Mount Vernon, Knox County, Ohio

By Cheryl Splain, KnoxPages.com Reporter

MOUNT VERNON — On Wednesday, local officials and community members learned about a potential way to manage and prevent the neighborhood blight that often comes with vacant, abandoned or boarded-up buildings.

A land bank is a nongovernmental entity that can take possession of vacant or abandoned tax-delinquent properties and repurpose them for rehabilitation or demolition. The Ohio Legislature first authorized land banks in 2008 for Cuyahoga County only; in 2015, all counties became eligible to create a land bank.

Jim Rokakis, vice president of the Western Reserve Land Conservancy and director of its Thriving Communities program, told the group that Delaware and Fayette counties are about to join 46 other Ohio counties in creating a land bank.

Rokakis emphasized that land banks are created by government but are not government. “We said it can't be government because you have to move quickly, it has to be agile,” he said, referring to the criteria used when he helped lobby for legislation creating Cuyahoga's land bank. “The impact on property values from a vacant building is huge; there's nothing good that comes from a vacant property.”

He said land banks have several benefits:
*Take control of vacant or abandoned tax-delinquent properties
*Reduces flipping of properties
*Repurposes properties through demolition or rehabilitation
*Transfers properties to qualified end users
*Puts abandoned properties back on the tax roll

Land banks acquire properties in several ways:
*Donation
*REOs (real estate owned buy a bank after foreclosure)
*Deed in lieu (owner turns over the deed to satisfy a loan and avoid foreclosure)
*HUD (Department of Housing and Urban Development)
*GSEs (government sponsored enterprise sch as Fannie Mae and Freddie Mac)
*Tax foreclosures
*Forfeitures

“Land banks are the preferred entity to work through for GSEs and HUD,” he said.

Once a land bank takes possession of properties, it has several options:
*Rehab
*Resell to a qualified buyer to rehab
*Rehab through a deed in escrow
*Work through programs to establish parking lots, green space or gardens
*Hold for strategic assembly and economic development
*Demolish

Rokakis said that land banks have a safe harbor provision from the Ohio Environmental Protection Agency for environmental issues “as long as you don't aggravate the condition.”

“Where there's a stronger market such as Knox County, rehabilitation is a good option,” he said, adding that some counties use career center and vocational students to do some of the rehab work and then sell to groups such as veterans or immigrants.

Alison Goebel, executive director of the Greater Ohio Policy Center, said that land banks are a “very important tool” to achieving Greater Ohio's goals of revitalization and sustainable development and economic growth. She told group members they must keep four things in mind about land banks:
*They are a tool for achieving community goals.
*Knox County can adapt its land bank to fit its needs.
*Although there are some short-term results, “eliminating dregs in the landscape takes time.”
*A land bank is only as effective as the community makes it; the community must commit resources for staffing and funding.

Funding sources include delinquent tax collection fees, county revenue, grants, borrowing and property resales. Rokakis said most of Ohio's land banks use DTAC (delinquent tax and assessment collection fee). DTAC is a statutory 5 percent fee charged against delinquent taxes; Rokakis said this fee can be increased up to another 5 percent with the money going to fund the land bank. County Auditor Jonette Curry said Knox County's annual revenue from DTAC is around $100,000.

Group members agreed Knox County does not have a lot of abandoned buildings, but there are some that are boarded up, vacant but current on taxes, or in the foreclosure process. With a land bank, the standard sheriff's sale of foreclosed properties can be bypassed. If a building is abandoned and tax delinquent, and the owner does not pay the delinquent amount in full at a hearing by the Board of Revision, the board can elect to turn the property over to the land bank. The Board of Revision is the county entity that hears property valuation complaints.

Creating a land bank, which is technically called a land reutilization corporation, starts at the county level with a resolution from the county commissioners. The county treasurer files articles of incorporation with the Secretary of State, and a governing board consisting of the county treasurer, two commissioners, a representative from the largest municipality and a township representative is formed. The board can be expanded to seven or nine members.

The land bank has flexibility in how it handles properties. For example, it could require the buyer of a single-family dwelling that has been reconfigured for four apartments to restore it to a single-family dwelling. It can also stipulate a building must be occupied while it is being rehabbed and work with banks on a program for first-time homeowners. Rokakis said the board can also shut down the land bank or lower the DTAC rate if it desires.

“There are a number of disparate things going on within the county that you could tie together with this,” said Jeff Harris, president of the Area Development Foundation. “Maybe this land bank concept is just a clearing house for all of this stuff.”

Land Banks

 

This graphic shows the 46 Ohio counties that have established a land bank to manage vacant, abandoned or foreclosed properties.
Graphic courtesy of Western Reserve Land Conservancy

 

 

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