Shrinking Cities

Land banks

“A land bank is a governmental or nongovernmental entity established, at least in part, to assemble, temporarily manage, and dispose of vacant land for the purpose of stabilizing neighborhoods and encouraging re-use or redevelopment of urban property. For purposes of the NSP program, a land bank will operate in a specific, defined geographic area. It will purchase properties that have been abandoned or foreclosed upon and maintain, assemble, facilitate redevelopment of, market, and dispose of the land-banked properties. If the land bank is a government entity, it may also maintain abandoned or foreclosed property that it does not own, provided it charges the owner of the property the full cost of the service or places a lien on the property for the full cost of the service.” -- American Reinvestment and Recovery Act, 2009

Land banks are an important public policy tool for shrinking cities. They are allowed to acquire, assemble, temporarily manage, and dispose of vacant land for the purpose of stabilizing neighborhoods and encouraging the re-use or redevelopment of the property.

A land bank cannot indefinitely hold land and its goals usually are to:

  • Acquire vacant land
  • Acquire vacant property though certain bank foreclosures, tax foreclosures, or donated property
  • Rehabilitate homes to re-enter the market place
  • Demolish property and rehabilitate or assist in rehabilitating the site
  • Assemble land for future development

 

Land banking can allow regions, states, and municipalities to remove abandoned properties from the market and either convert them into new, productive uses or hold them in reserve for long-term strategic planning.  For example, the Genesee County Land Bank in Flint, MI, acquires an average of 1,000 abandoned properties each year and has been the catalyst for increasing property values by more than $100 million.

For states and local land banking initiatives, see State and Local Initiatives.