Take a row of houses in the 1200 block of Wrightsboro Road in the Laney-Walker neighborhood. Mostly vacant, rundown and with unpaid taxes, they will likely become new housing now that they have been transferred to a developer who is using the land bank as a middleman.
In March, the land bank sold 15 parcels on Wrightsboro Road and 12th and 13th streets to the United House of Prayer for All People for $384,600. Everything on the tracts will be demolished and new housing units will be built.
Land bank Executive Director Norman Michael said putting rundown properties back into use is central to the organization’s mission. If the houses aren’t contributing tax revenue and there’s otherwise no market demand, the land bank – which is governed by state statutes – can speedily move through the foreclosure process.
When the city’s Housing and Community Development Department wanted to build Heritage Pine – the first development of the Laney-Walker/Bethlehem revitalization efforts – it turned to the land bank.
A block of houses on Pine Street was in disrepair, and some were abandoned. The land bank helped locate owners – who sometimes leave town and let taxes build up for several years – and deal with back taxes.
The houses were demolished, and several new homes stand there now returning tax revenue to the city.
“As long as you have property that is developing, you are going to need a land bank,” Michael said.
To deposit a property in the bank, the land bank first investigates a future use to ensure the land won’t sit uncollected.
Redeveloping the property isn’t the land bank’s job, Michael said.
“We won’t go for anything that we don’t have a purpose for because then we become slumlords,” he said.
Frank Alexander, an Emory University School of Law professor and the founder of the Center for Community Progress, studies land banking practices and their rapid expansion across the nation. The first land bank was created in St. Louis in the early 1970s. Similar organizations in Cleveland, Louisville and Atlanta followed. In the last quarter of the 20th century, many industrial cities lost population and houses sat empty, Alexander said.
More recently, land bank inventories swelled during the foreclosure crisis as banks and mortgage lenders gave properties to the land banks. According to Alexander, 150 land banks now operate across the nation.
Alexander said land banks help communities handle properties that are in “legal limbo” or are problematic to the housing market because owners can’t be located, houses aren’t maintained or taxes far exceed market value.
A bank often can’t maintain foreclosed properties and doesn’t act to sell them quickly, Alexander said.
Georgia’s first land bank statute was passed in 1991 and has been amended several times since – once in the mid-1990s to include practices for consolidated governments when Augusta-Richmond County created its land bank.
Processes for property acquisition are fairly standard, but goals for repurposing the otherwise vacant properties vary according to community needs.
Flint, Mich., converted vacant properties to green space. Detroit needed neighborhood retail.
The Columbus, Ga., land bank was reactivated in August 2010 to help transfer about five city-owned lots to Habitat for Humanity, said Mark McCollum, the compliance manager with the city’s Community Reinvestment Department. More recently, the foreclosure process has been used to grow the bank’s inventory.
McCollum said the land bank’s main focus is similar to the Augusta organization’s: repurposing vacant, substandard properties into housing.