History of Land Banks

Ohio's legislation has become a model for other states.

Land banks first emerged in the 1960s as an urban planning tool. Over the past two decades, land banking has become an increasingly important tool for cities challenged by vacant and abandoned properties.  Many urban industrial centers throughout the nation were built for populations that simply were either never achieved or that were abandoned due to sprawl.

Ohio’s county land banks

In Ohio, a new form of land banks was established in 2008 when state legislators passed a bill allowing Cuyahoga County Commissioners to create the first modern land bank.  Jim Rokakis – then the Cuyahoga County treasurer and now director of Western Reserve Land Conservancy’s Thriving Communities Institute – was the driving force behind passage of this legislation. This transformational new tool allowed for the establishment of county land reutilization corporations, commonly known as county land banks.

The Ohio land banking legislation has become a model for other states, such as New York and Georgia.

County land banks are nonprofit organizations whose mission is to strategically acquire properties, and return them to productive use, reducing blight, increasing property values, supporting community goals, and improving the quality of life for county residents.

While each county land bank is somewhat different, customized to the unique needs of the community it serves, land banks typically have three main functions.

  • Acquire and consolidate (or aggregate) vacant parcels through purchases, donations, or intergovernmental transfer from public foreclosure holdings.
  • Clear title to land and prepare parcels for transfer to a third party for redevelopment or reuse.
  • Prioritize land for disposition or reuse, selling land for redevelopment to a third party.

The success of Ohio’s first land bank in Cuyahoga County led to subsequent legislation expanding eligibility first to all counties with populations over 60,000 and later to all counties in the state.

The Michigan model

Ohio’s county land bank concept was based on a successful program in Genesee County, Mich., which includes the industrial city of Flint. The Genesee County land bank was initially created in 2002 under Michigan state laws permitting urban cooperation agreements and was expanded following the enactment of the Michigan Land Bank Act in 2004. Genesee’s land bank acquires an average of 1,000 abandoned properties each year and has been the catalyst for increasing property values in the county by more than $100 million.

Dan Kildee founded the Genesee County Land Bank. Kildee is nationally regarded as a pioneer in community development and neighborhood stabilization.  Kildee delivered the keynote address at The First Convening of Ohio Land Banks in Cleveland in 2011.

The opportunity ahead

Today, Thriving Communities Institute is helping counties across Ohio establish their own land banks.  The timing could not be better.

A Brookings Institution study reflected on the unique value that land banks can provide in today’s uncertain economic conditions, and it concluded:

Fall_hikeLand banking can be a valuable land use tool for current market conditions. In strong economic contexts, housing and building codes, which first began to emerge in the late 19th century, and zoning laws, which evolved over the past 75 years, have been vitally important and effective tools for local government land use planning and management. However, when real estate markets are cool, as they are currently, neither housing codes nor zoning regulations can effectively handle the excess of supply over demand. During such times, and even more generally, confronting the ebb and flow of market demands for real estate has always been one of the toughest challenges for local governments.

Markets for land rarely, if ever, operate efficiently. By definition, a parcel of land is a unique commodity fixed in location and not interchangeable with competing products. Unlike the demand for discrete products that are fungible in nature, the inelasticity of the land market does not generally allow prices and consumption to adjust to relative demand and available supply. Furthermore, property titles consist of sets of separable but connected interests which, when held by parties disconnected from each other and from the land, leads to a variety of dysfunctional conditions. Land banking offers an approach to resolving these market inefficiencies.