Poverty Beat: Land Bank Program Offers Much Needed Change

In January Philadelphia became the largest city in the country to approve the creation of a land bank, an entity that will regulate the sale of the city’s  40,000 abandoned properties.

A coalition of for-profit and non- profit entities came together under the umbrella of The Philly Land Bank Alliance to advocate for its creation. Beth McConnell, policy director of the Philadelphia Association of Community Development Corporations (PACDC), one of the groups that compose the Alliance says the process towards establishing the land bank was complex.

“Anytime you’re talking about reforming a very complicated system such as how we deal with vacant properties in the city can be very confusing. Getting people to kind of understand how complex the problem was and understand how a land bank could be an effective and useful solution was certainly a challenge,” says McConnell.

The initiative seeks to make the sale and maintenance of vacant and dilapidated properties more efficient. Currently, three government agencies are responsible for publicly owned land but the Department of Public Property, Philadelphia’s Redevelopment Authority and Philadelphia’s Housing Corporation manages the largest share of publicly owned vacancies.

The current multi-agency system makes it difficult for potential buyers to find out information about properties and the approval process for buying the land often takes years. In the current system, potential buyers can look for properties in a city database, Philly Landworks. The buyers can express interest in the properties but they then have to wait for the agency that manages the properties to get back to them and that could take years.

Although the land bank will makes it easier for people to acquire abandoned land it is still not as easy as buying property on the open market.

“One of the key tools the land back will offer the city over time is the opportunity to begin to consolidate the ownership and get more and more pieces of land into one owner at the land back in preparation for finding a new use,” said John Carpenter, deputy executive director of the Philadelphia Redevelopment Authority.

In order to spur development the process of buying vacant land has to be more streamlined. One of the key elements of the land bank bill is that it creates a more efficient process for buying land.

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A vacant piece of land off Diamond Street near Temple University. Photo/ Mamaye Mesfin

Potential buyers will need approval from city council, the Land Banks Board of Directors and the Vacant Property Review Committee. The Land Banks Board of directors will consist of 11 members, five appointed by the mayor, five by city council and one by the board itself. The inclusion of city council helps establish community-level voice regarding the decisions made in the land bank.

Philadelphia has struggled to spur development for years. In 2001 the city launched the Neighborhood Transformation Initiative and one of the main goals of the NTI was to make it easier for the city to utilize vacant properties. At the time the NTI was largely unsuccessful at doing just that because it was difficult for city agencies and individuals to acquire tax delinquent land.

“ The way cities have dealt with abandonment and essentially deteriorated properties is that they put a lean on the property so what happens is that those leans actually become more expensive than the value of the property. So even if someone is motivated to do something about fixing up the property the economics of it don’t work,” said Liz Hersh the executive director of the Pennsylvania Housing Alliance.

There are around 30,000 privately owned vacant and dilapidated properties in the city, 17,000 of which are tax delinquent. What the land bank legislation provides is series of measures that gives local governments more authority in confiscating tax delinquent properties and clearing leans, which makes the process of acquiring land much easier.

In a city like Philadelphia with a vulnerable financial climate, the establishment of a new government agency seems dauting. The office will most likely be located in the current Philadelphia Housing and Development Corporation and will cost around $4 million. The cost of running the day-to-day operation of the land bank will be covered by the sale of properties, but at a time where more than 20 Philadelphia schools have been closed due to budget cuts, $4 million looks like a pretty penny.

However PACDC policy director Beth McConnell says the city must invest in a program like the land bank now more than ever.

“A vacant property is not generating any money for our school district. We did a study that estimates it costs at least $20 million a year to maintain vacant parcels across the city in terms of police and fire and code enforcement. That’s a lot of money that the city doesn’t have to waste on vacant properties and would rather put into our schools,” said McConnell.

Revitalizing communities is a complex issue, and poses as many threats as it does opportunities. As much as the new legislation can aid communities in creating equitable development strategies it can also do the opposite; it all depends on how the community decides to use the land bank. To John Carpenter the land bank has the potential is create real change on the neighborhood level, but only if residents are engaged.

“ It doesn’t solve the fundamental problem that people in neighborhoods are going to have about making a project work, once they’ve identified a project they still have to go and find the resources to make it real,” said Carpenter.

 

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It costs the city millions of dollars a year to maintain vacant land. Photo/ Mamaye Mesfin