Land bank law raises hopes in war on blight
The face of vacancy and blight is grotesque: Lifeless houses with paint flaking from rotted wood facades; rain gutters drooping from roofs; broken-out windows boarded with city-installed plywood; vacant lots strewn with garbage. It’s an epidemic, data suggest, a large-scale problem that municipalities and neighborhood groups have been powerless to do much about, until now.
Landing banking legislation quietly became law in Pennsylvania late in 2012, giving municipal governments, community development corporations and others the most potent legal tool yet to attack vacant and blighted property on a scale big enough to make a difference.
For a decade, places such as Flint, Mich. and Cuyahoga County, Ohio, have used land banks to seize thousands of vacant, tax-delinquent properties and sell, rehabilitate or raze them following comprehensive re-use strategies that have yet to be negotiated in southwestern Pennsylvania.
“Imagine trying to hammer a nail without a hammer,” said Liz Hersh, executive director of the nonprofit Housing Alliance of Pennsylvania. “Now we have a hammer.”
Costly crisis
southwestern Pennsylvania and across the state and nation, vacant and blighted property is denying local governments desperately needed tax revenues, consuming millions of tax dollars, eroding real estate values, posing health and safety risks and complicating already challenging neighborhood revitalization efforts.
Eleven percent of the houses and apartments within the seven-county Pittsburgh Metropolitan Statistical area stood vacant in 2011, according to U.S. Census Bureau American Community Survey data. That’s greater than the 9.9 percent average vacancy rate for the 15 benchmark regions tracked by Pittsburgh Today. And the Pittsburgh MSA vacancy rate has soared since 1990, when the decennial census reported 6.8 percent of housing as vacant.
Vacant and blighted property is particularly acute in poor urban neighborhoods, older industrial areas in decline and places stung by high rates of foreclosure. In the Monongahela River valley, the exodus that followed the collapse of the steel industry three decades ago has left several communities with vacant housing rates double the 11 percent national average reported in the 2010 Census. In Pittsburgh, few neighborhoods are beset by vacancy and blight as severely as Homewood, where nearly 44 percent of the land parcels and 28 percent of the houses are vacant.
“It’s just plain ugly to a degree that it sucks life out of your soul when you are surrounded by it,” said Elwin Green, a longtime Homewood resident, whose story is part of the PittsburghTODAY special report, Nobody Home: The Rise of Vacancy. “But what might be the most dangerous aspect of vacant and abandoned property is that it can be easy to get used to – that it becomes part of the background of your life that you don’t notice anymore. So, a lot of us wind up accepting as normal stuff that should never be normal.”
In recent years, vacant property has increasingly been seen as an opportunity to redesign certain neighborhoods in ways that are better suited to their down-sized populations, such as expanding narrow lots to accommodate fewer, but wider and more marketable tracts, and trading abandoned lots and buildings for greenways, community gardens, recreational space and other appealing features that might help stimulate local housing markets.
That has been done piecemeal in southwestern Pennsylvania. Pittsburgh, for instance, takes some 300 tax-delinquent properties a year through treasurer’s sales and sells them to residents and others with bona fide plans for turning them into neighborhood assets. In its first six years, the Allegheny County Vacant Property Recovery Program moved 500 vacant properties into the hands of buyers interested in turning them into side yards and other neighborhood-friendly uses. But making a dent in vacancy is a question of scale. The county has more than 55,000 vacant houses alone, according to 2010 census data.
Long-sought opportunity
With the state’s new land bank law, counties, cities and municipalities with populations of at least 10,000 have, for the first time, the opportunity to create comprehensive structures to proactively take vacant houses and lots through tax foreclosure on a larger scale, to streamline the title-clearing process, to assemble inventories of marketable properties, to draft land recycling strategies and to work more aggressively to stabilize neighborhoods.
Under the Pennsylvania law, land banks can acquire property through tax-foreclosure, purchase, donation and other means, except for eminent domain. They can sell, lease, raze, rehabilitate or otherwise improve the properties acquired. They can raise money through bonds, sales and rent. They can recover taxes and return them to schools and municipalities that are owed. And land banks elsewhere have proven attractive to buyers, offering a central inventory of reasonably priced property free of the headache and cost of clearing the titles of parcels that interest them.
“For most municipalities, the problem wasn’t whether they could get their hands on a property,” said Hersh. “They didn’t necessarily want to get their hands on the property because they didn’t have a way to do anything with it.”
Land banks in other states have led to establishing comprehensive land recycling strategies around revitalizing and reengineering neighborhoods where vacant property is a problem. “More property will be available for resale,” said Bethany Davidson, director of Pittsburgh Community Reinvestment Group’s land use program. “But at the same time, you have to be thoughtful about reuse and disposition. At least now we have the opportunity to be thoughtful about reuse.”
Creating land banks is not expected to be simple. For instance, because the law empowers a land bank to discharge taxes on the real estate it takes, creating a land bank requires approval of every government entity with a stake in local property taxes. A land bank encompassing all of Allegheny County, therefore, would need to win the approval of 42 school districts and 128 cities, boroughs and townships.
It’s largely for that reason that Davidson expects that the region’s first land bank will be confined to the City of Pittsburgh or perhaps the city and a handful of nearby municipalities.
The coming years will determine whether local government fragmentation and other challenges can be overcome to allow effective land banks to blossom in the region. What is clear is that local officials now have the most powerful tool they’ll likely ever have for turning the tide of vacancy that has claimed more than one in 10 houses across southwestern Pennsylvania.