Ohio County Launches Land Bank to Reconfigure Neighborhoods

Inspired by the success of the land banks in Genesee County, Michigan, which stabilized property values in Flint by demolishing vacant houses, Cuyahoga County in Ohio recently launched the first nonprofit land bank of its kind in the state.  The county land bank — or Land Reutilization Corporation — is an independent government corporation that will acquire, manage, and dispose of thousands of vacant properties across the county in order to reconfigure neighborhoods hollowed out by subprime lending and tens of thousands of mortgage foreclosures.  Fueled by penalties and interest on unpaid real estate taxes, the land bank can buy properties wholesale from banks or loan-servicing companies. It will also acquire tax-delinquent properties through streamlined procedures.  It can cut the process of acquiring tax-foreclosed properties from as long as 2 years to 45 days. It can also buy discounted properties in bulk from banks or loan servicers.  The land bank can wipe titles clean of debt, and can buy, manage and sell buildings or vacant land.  It can also float bonds against revenues including penalties and interest on overdue real estate taxes. 

Among other things, the Cuyahoga County land bank is expected to accelerate the creation of urban farms and parks set amid consolidated neighborhoods, cultural attractions, and high-tech development zones across Cleveland and surrounding suburbs.  Some of the proposals to the bank include “Opportunity Corridor,” a proposed $350 million thoroughfare intended to spark economic development and bring jobs to a high poverty zone on Cleveland’s East Side and “Go! Growers,” a potential program of the Cleveland Clinic that would turn vacant city land “into sources of healthy food, community assets and ecological oases.”  The land bank will be closely watched: the state’s enabling legislation for the land bank requires regular audits and lots of transparency. The land bank could be ready to borrow $50 million to $70 million by late summer and is expected to have assembled 1,000 properties, most of them in Cleveland, by the end of 2009.

SS