<p> TESTIMONY BEFORE NEW JERSEY LEGISLATURE </p><p>ASSEMBLY HOUSING AND COMMUNITY DEVELOPMENT COMMITTEE</p><p>Trenton, NJ</p><p>March 16, 2015 Lavea Brachman, Executive Director, Greater Ohio Policy Center, Columbus, OH</p><p>Chair Green, Vice Chair Jasey, and members of the Housing and Community Development </p><p>Committee. </p><p>Introduction</p><p>My name is Lavea Brachman, and I am the Executive Director of the Greater Ohio Policy Center, a nonpartisan nonprofit organization located in Columbus, Ohio that operates statewide and champions revitalization and sustainable growth to create economically competitive cities and communities. I am pleased to be here in Trenton today to offer testimony on the status of land banks in Ohio to help inform this body and the governor’s consideration of proposed land bank legislation for New Jersey. I am here at the invitation of the Housing and Community </p><p>Development Network of New Jersey.</p><p>Similar to New Jersey, Ohio’s cities have been hit hard by urban blight and decline, experiencing some of the highest foreclosure and vacancy rates in the country. At its height in 2009, Ohio’s foreclosure filings was almost 90,000 per year, and the vacancy rates have climbed to devastating levels of over 15% in such cities as, Cleveland, Youngstown and Cincinnati, and over</p><p>20% in Dayton and many other cities and towns around the state. These vacancies have also cost municipalities exponential amounts in collateral damage, represented in the form of public safety hazards and decreased property values.</p><p>1 In 2008, in response to this unparalleled foreclosure and vacant and abandoned property crisis, the Ohio General Assembly, with bipartisan support, passed legislation creating Ohio’s first county land bank, piloted in Cuyahoga County (where Cleveland is located). In 2010, GOPC and a coalition of partners from around the state successfully advocated for passage of legislation that extended land bank authority to an additional 42 out of Ohio’s 88 counties (based on a population threshold), permitting these specified counties to create a hybrid organization that combines the private sector efficiency of a non-profit corporation with the public purposes, powers and funding of a governmental organization. </p><p>Basic Ohio Land Bank Mission, Powers, Composition and Funding</p><p>These Ohio land banks were created to:</p><p>1. facilitate reutilization of vacant, abandoned, tax‐foreclosed real property;</p><p>2. hold and manage these types of properties to leverage their reutilization;</p><p>3. clear the title of property and coordinate property assembly; and</p><p>4. promote economic and housing development in the county or region.</p><p>In order to achieve these goals, Ohio’s county land banks have a number of unusual, critical powers, including the ability to: </p><p> take title to a property more than two years delinquent on property taxes, local </p><p> government fines or fees, or has serious and chronic unabated code violations;</p><p> extinguish all private mortgages, liens, and state and local taxes/fees, in order to “clear” </p><p> the property’s title for future use; </p><p>2  prevent a foreclosed property from going to sheriff sale and thus help to interfere with </p><p> purchase by an unscrupulous real estate speculator; and</p><p> address blight mitigation, including demolition, property stabilization, and property </p><p> rehabilitation, in order to revitalize neighborhoods and communities. </p><p>Additionally, Ohio land banks are governed by a board of directors that comprise at least 5 </p><p>“community stewards,” which includes both public and private sector representatives (that is, county commissioners, the county treasurer, representatives from a township and the county’s largest city, and a private real estate developer) to ensure land banks perform appropriate functions and do not overextend their powers or undertake extensive property ownership where it is unwarranted. </p><p>Perhaps most importantly, the Ohio statute names a source of operational funding that counties could chose to provide to land bank: 5% of the biannual delinquent property tax receipts, more commonly known as “DTAC” (Delinquent Tax and Assessment Collection). Ohio is the only state that statutorily provides a consistent funding source for county land banks. </p><p>Lessons Learned and Successes In the five plus years of operations, as more land banks have come on-line, Ohio’s land banks have learned some important lessons and experienced significant success. Let me give you a quick sense of some of those lessons and successes, large and small.</p><p> First, since the statute does not dictate how county land banks should programmatically </p><p> operate, leaving it up to the local boards, county land banks have the flexibility to form </p><p> in ways that are responsive to local needs. They are all tailored to their local </p><p>3 circumstances, so that each of the 22 currently existing county land banks is somewhat </p><p> unique in terms of operations and programming. However, there are similarities in </p><p> terms of structure and activity that have demonstrated successful outcomes.</p><p> Second, piloting one land bank first, in Cuyahoga County, was very effective in </p><p> demonstrating its operations and use for legislators.</p><p> Third, in addition to property-by-property blight elimination, land banks in Ohio are </p><p> achieving the broader goals of: 1) stabilizing and strengthening markets—particularly </p><p> residential neighborhoods—to prevent further decline, and 2) clearing a path for private</p><p> sector re-engagement by lowering barriers through incentives, support, and resources. </p><p>For instance, Franklin County land bank combined demolition of parts of a dilapidated </p><p> apartment complex in Columbus, allowing for reinvestment and renovation of the </p><p> remaining apartments and townhouses. The complex is now under new ownership and </p><p> features a new public park. This “targeted area” strategy involves a more holistic </p><p> approach to neighborhood revitalization, particularly where some market still actively </p><p> remains, to coordinate and concentrate interventions and resources to stabilize and </p><p> revive a functional market. </p><p> Fourth, Ohio land banks have become vehicles for use by state agencies (such as the </p><p>Ohio Attorney General’s office and the Ohio Housing Finance Agency) to funnel much-</p><p> needed demolition funding. Ohio had estimated 100,000 blighted properties in 2010; </p><p> close to 20,000 have been torn down by 2015. These lots are now the sites of brand </p><p> new real estate developments through parcel assemblage, new sideyards for neighbors, </p><p>4 community gardens, and parks. This blight removal activity has resulted in collateral </p><p> improvements, including crime reduction, improving property and neighborhood values,</p><p> residential redevelopment, and green space creation. </p><p> Fifth, land banks are versatile. They can operate as the “lead entity” in projects, driving </p><p> stabilization and revitalization efforts, but they also act as excellent partners and work </p><p> closely with other local entities that share similar goals of neighborhood stabilization </p><p> and/or market re-invigoration. For instance, a Mahoning County (Youngstown) land </p><p> bank took over a blighted property on an otherwise well-kept street and sold it to </p><p>Habitat for Humanity which built an ADA-accessible house for a retired Marine staff </p><p> sergeant and his family.</p><p> Sixth, land banks have helped to save money by eliminating properties that received </p><p> disproportionate number of emergency services calls, e.g. police calls to abandoned </p><p> houses used as drug dens, properties targeted for arson, properties that attract wildlife </p><p> and vermin. </p><p> Seventh, land bank operations are helping to stabilize existing buildings, which prevents </p><p> future extraordinary costs. For instance, Hamilton County (Cincinnati) has the “High-</p><p>Impact Property Program” that improves commercial buildings to a level that attracts </p><p> private sector, saving one of the oldest skyscrapers in Cincinnati and a historic theater </p><p> this way by doing the roof repairs and title clearing needed by the private sector. </p><p> Finally, their work has prevented bank walkaways and performed property assembly to </p><p> aggregate properties to improve their reuse potential. For instance, the Lucas County </p><p>(Toledo) land bank gained site control of a multiple, adjacent commercial properties </p><p>5 (an old strip mall with a former grocery store, a Kroger, and multiple smaller units) </p><p> with complicated title history with mortgage foreclosure, several major lien holders </p><p> and an high delinquent tax bill, and worked with receiver to find a purchaser who is </p><p> restoring the property with new commercial users that are already generating tax </p><p> revenues.</p><p>Conclusion</p><p>Ohio land banks are a welcome example of a state policy implemented with appropriate local control intervening effectively to jumpstart local market operations. While Ohio communities have a long way to go to return to economic and physical health -- and while there is room for land banks to maximize further use of their tools to help individuals thrive and achieve community revitalization -- many cities and counties are actively leveraging their land banks’ capabilities demonstrating that well-intentioned state policy interventions in combination with local capacity and oversight can work in tandem with market operations. They are working so well that a recent proposal floated by the county treasurers’ association to expand land banks to the rest of the counties in the state. </p><p>6</p>