Revitalization Fact Sheet Land Banking

he growing inventory of tax-fore- closed in economically New Environmental Solutions Tdistressed urban areas is reducing tax revenues, placing additional strains EPA’s land revitalization initiatives are producing significant environmental on the delivery of public services, benefits and helping to transform communities into more sustainable and destabilizing neighborhoods. An and livable places. The strategy of encouraging market-driven rede- increasing number of state and local velopment of brownfields and other contaminated sites for economic governments are authorizing the cre- reuse is proving to be a successful approach at many sites. However, ation of land banks to take ownership challenging markets and economic realities can leave some of and manage these properties in the formerly contaminated properties unused, possibly for a long time. New long-term interest of the communities approaches are needed to revitalize these sites and protect human affected. A land bank is a governmental health and the environment. or nonprofit authority created to acquire, EPA’s Land Revitalization Team is working with communities, states, other maintain, and stabilize vacant, aban- federal agencies, academic institutions, nonprofit organizations, and doned, and tax-delinquent properties the private sector to develop and test new approaches that recognize while working with other entities to valuable reuse alternatives for formerly contaminated properties. Build- promote the productive reuse of the ing green infrastructure to help manage stormwater runoff and floods, properties. Land banks in several promoting safe management to support urban , and sit- states are using EPA Brownfields grants ing renewable energy on contaminated sites can bring environmental, and Targeted Brownfields Assessment ecological, and social benefits to communities. Unlocking the potential funding to facilitate the use of aban- value of these underused properties often requires creativity and close doned properties. collaboration with many public and private partners. These projects The structure and function of land can help stabilize communities and spur economic development. banks vary widely because they are created under enabling state legisla- tion and enacted by local ordinances. ample, through tax ) are not State and local governments can use The essential function of a land bank is liable for prior contamination, liability NSP funding to establish land banks, if the ability to streamline tax foreclosure concerns may arise if land banks are enabled by state legislation. The land proceedings and clear title to not created as entities of a local gov- banks can use NSP funding to acquire that reverted to public ownership. This ernment. EPA is working with these new abandoned homes and then rehabili- function allows communities to plan for entities to clarify potential liability issues tate and rent or sell the home. Dilapi- the reuse of properties that previously and promote the use of land banks to dated homes that pose safety hazards were difficult to acquire and redevelop, support community revitalization. can be demolished. All activities and to protect neighborhoods from the funded by NSP must benefit low- and blight and decline often associated While land banks historically acquired moderate-income persons. with tax-foreclosed properties. properties through tax , the passage of the Housing and Economic Land banks generally are provided the Recovery Act (HERA) in 2008 provides authority to acquire a large number of funds to state and local governments to properties, over 10,000 in some cases. acquire mortgage-foreclosed proper- Some properties are potentially con- ties. HERA created the Neighborhood taminated. Even residential properties Stabilization Program (NSP) within the can be contaminated with hazard- U.S. Department of Housing and Urban ous substances such as lead-based Development (HUD) to provide emer- paint, asbestos, and pesticides. These gency assistance to communities hard- properties need to be assessed and est hit by home abandonment. Under contamination needs to be cleaned the NSP, a home is considered aban- up before the property can be reused doned once mortgage or tax foreclo- to the benefit of the community. sure proceedings are initiated and the Although local governments that An abandoned home in Baltimore, MD property is vacant for 90 days or longer. acquire properties involuntarily (for ex- Genesee County Land Bank Authority

The Genesee County Land Bank in a foreclosure process that could last Authority (GCLBA). Neighborhood is widely regarded as a seven years. revitalization, homeownership, and national model for land banks. The increasing housing opportunities for The state passed legislation to allow program encourages the reuse of low-income families are GCLBA’s top counties in Michigan to foreclose and more than 4,000 residential, commer- priorities. GCLBA finances its op- take title to tax-delinquent properties cial, and industrial properties acquired erations through its sales and rental much more quickly. Counties can use through the tax foreclosure process. programs, collection of delinquent revenue generated from the sale of property taxes on transferred proper- Flint and other communities in Gen- foreclosed properties to manage their ties (for five years), and tax-increment esee County have struggled with inventory of properties. Michigan also financing for cleanup and demoli- population decline and property enacted a law allowing counties to cre- tion. The GCLBA received almost $3 abandonment for decades. About ate land banks. The law allows counties million in grants from EPA to assess, a third of Flint’s properties are now to adopt a brownfield redevelopment clean up, and plan for the reuse of vacant lots or abandoned . plan for tax-foreclosed properties, thereby contaminated properties. Genesee Under Michigan’s former tax foreclo- facilitating the use of tax-increment County also received over $10 million sure laws, local governments could financing to pay for upfront cleanup, in NSP funding from HUD to acquire not take control of tax-delinquent demolition, and title clearance. and plan for the reuse of mortgage- properties. Instead, properties unsold Under these authorities, Genesee County foreclosed properties. at auction became state-owned after created the Genesee County Land Bank

Cuyahoga County Land Revitalization Corporation

Cuyahoga County, Ohio, is home to structures that have reuse potential are property taxes and assessments that over 35,000 vacant homes due to tax rehabilitated and sold. Structures that are not paid when due. CCLRC also and mortgage foreclosures. The aban- are unsafe or cannot be rehabilitated generates revenue through the resale donment and decay of these homes are demolished. The resulting vacant of acquired properties and through is severely affecting home values and land can be used for approved de- grants from foundations and govern- destabilizing county neighborhoods. velopment projects or become part ment programs. CCLRC and its part- of community-wide planning for future ners received nearly $41 million in NSP To fight this crisis, in 2009, Ohio reuse. Beyond new housing, retail, or funds to demolish blighted homes and passed a law allowing the formation commercial projects, this newly avail- renovate others in 20 county neigh- of nonprofit county land reutilization able land can be used to create public borhoods. CCLRC also received a corporations (land banks) to facilitate greenspace and for urban agriculture, $400,000 EPA grant to assess contami- the rehabilitation and reuse of va- stormwater management, and other nated sites for environmental risks and cant, abandoned, and tax-foreclosed innovative and ecological reuses. The potential redevelopment. property. The Cuyahoga County Land county partners with its cities on all prop- Reutilization Corporation (CCLRC) is erty reuse decisions. the first such land bank established in Ohio. The CCLRC works with cit- Among CCLRC’s accomplishments is ies, other units of government, lend- an agreement negotiated with Fannie ers, and property owners to acquire Mae to stop selling low-value proper- troubled properties and return them to ties to speculators. Instead, low-value productive reuse. distressed properties are transferred to CCLRC for $1 and con- The CCLRC acquires tax- or mort- tributes $3,500 to the land bank for gage-foreclosed properties held by each property. government agencies, banks, and Former auto dealership in Berea, OH, government-sponsored enterprises The CCLRC’s primary source of fund- such as Fannie Mae. Properties with ing is from penalties and interest on acquired by CCLRC with NSP funding

More Information: Visit EPA’s Land Revitalization program website at http://www.epa.gov/landrevitalization/ HUD’s Neighborhood Stabilization Program website: http://hud.gov/nsp

United States Office of Solid Waste and EPA 560-F-11-006 Environmental Protection Emergency Response April 2011 Agency (5105T) www.epa.gov/brownfields/