Brick by Brick
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Brick by Brick
How Communities Are Cashing In With Land Banks
Vacant and abandoned property accelerates the decline of neighborhoods. How can we make this land more productive? An increasing number of governments and non-profit organizations are turning to land banks as a partial solution.
Interview guests: National Land Bank Network Director Brian Larkin, Montgomery County Land Bank Senior Advisor Mike Grauwelman, The Port’s Executive Vice President Philip Denning, Common Orchard Project Director Chris Smyth
Ann Thompson:
Vacant and abandoned properties have a direct effect on neighborhoods. And demolishing or renovating those rundown buildings might be an opportunity to create more housing or development. There's no shortage of blight nationwide. It's estimated there are 16 million properties and that's increasing. In some Cleveland and Detroit neighborhoods the amount of vacant buildings outnumber the occupied ones. What can be done? More and more states are utilizing something called a land bank to turn things around.
Brian Larkin:
The term land bank is almost a misnomer, so the goal isn't really to create these massive inventories, is in fact, let's go ahead and get this property and then get it in productive hands.
Ann Thompson:
Land banks acquire property through foreclosures, purchases and donations and then work with neighborhoods to turn them back into something the community wants. This vacant and abandoned property isn't economically feasible for many investors, so that's why a land bank steps in.
Mike Grauwelman:
Of course, we lost money on a deal, but that wasn't a community investment. It's a public investment back into that neighborhood.
Phillip Denning:
We're not here to make a profit because if you have to make money doing this kind of work, especially in the beginning, it's just never going to happen.
Ann Thompson:
The benefits of reducing blight are many, including property values will likely go up and crime will likely go down. This woman lives in Dayton's Pineview neighborhood, which the Montgomery County Land Bank helped to fix up.
Jeri Birnbaum:
When you have a group that can come in and do that, that's a good thing because it helped makes us look better and our neighborhood people wanting to come and live in our neighborhood, we want that. We want the life.
Ann Thompson:
Here's another thing. In Flint, Michigan, when a land bank intervened, less than 1% of its property ended up back in foreclosure compared to 57% sold at auction. Even transforming small vacant land bank lots can make a difference. One Cincinnati man is turning them into orchards.
Chris Symth:
It's funny, after the orchards go in, I only ever hear positive things. One neighbor told me like, man, you're going to spoil me just having fresh fruit on his block.
Ann Thompson:
Today on the pod, how land banks work. Who benefits why Ohio Land banks have more lasting power than most, and how affordable housing fits into all of this. Let's get into it. This is Brick by Brick: Solutions for a thriving community.
Ame Clase:
Brick by Brick is made possible thanks to leading support from t e Debra and Robert Chavez and Greater Cincinnati Foundation. With additional major support from AES Ohio Foundation, Laurie Johnston; Susan Howarth Foundation, the George and Margaret McLane Foundation, Diane and Dave Moccia, The DaytonFoundation, the Robert and Adele Schiff Family Foundation and more. Thank you.
Ann Thompson:
Hi, and welcome to Brick by Brick, where we're highlighting solutions for a thriving community in southwest Ohio. I'm your host Ann Thompson. Vacant and abandoned buildings can change the character of a neighborhood.
Julia Capers:
You don't want to see a vacant home because it draws negativity and it flows over to your house whether you know it or not, and usually you know it because you get all types of negative things going on.
Ann Thompson:
One study found a single vacant building on a block can reduce the value of nearby properties by 20% or more. Rundown properties don't just look bad. They're also unsafe. Cities have to spend money policing them and putting out fires. Years ago, a study of eight Ohio cities, including Dayton and Springfield, found vacant and abandoned buildings cost $64 million to those eight communities, and when you broke it down, it was $182 per household in Dayton.
Lisa Parker Rucker:
No one likes to see boarded up homes or homes with smashed out windows or homes with a lot of overgrowth in the yard.
Ann Thompson:
Montgomery and Hamilton County have thousands of nuisance properties. See where they're concentrated at cetconnect.org and thinktv.org. Leading up to the 2008 housing crisis, many communities were looking for ways to address vacant and abandoned properties. Brian Larkin is the director of the National Land Bank Network. He says people behind in taxes were just walking away from their homes
Brian Larkin:
And instead of paying the taxes or instead of them being able to auction the property off and someone quickly buy it, people were just abandoning properties in ways that hadn't been happening before.
Ann Thompson:
In the early two thousands, Michigan took a major step by fast tracking the foreclosure process to get property in the hands of a responsible entity. In this case, the land Bank. A land bank is a government or nonprofit that acquires and maintains vacant abandon and tax delinquent properties with the goal of returning these properties to productive use. Ohio followed Michigan's lead in speeding up the foreclosure process, but it also took it a step further with a permanent way to fund county land banks a portion of the delinquent tax and assessment collection.
Brian Larkin:
The thing about it though, that is the only example in the country of annual reoccurring dollars that are set, they exist for the rest of land bank funding. It's many different ways.
Ann Thompson:
Larkin says today there are more than 300 land banks in the US. He surveyed some of them and found affordable housing is emerging as a top priority. Ohio sees land banks as a valuable tool and doled out $30 million to them this year in the first round of its Welcome Home Ohio program. The grants help land banks buy, rehab or build qualifying residential properties for income eligible Ohioans. The Montgomery County Land Bank got more than any other county, $7 million. Former executive director and now senior advisor Mike Grauwelman wrote the grant request. He says, this award will enable Montgomery County to build and sell 40 residential properties and to renovate and sell another two dozen.
Mike Grauwelman:
We haven't determined exactly which neighborhoods, we haven't determined how many in what neighborhoods, but the objective is first to create affordable housing because this is for residents at 80% AMI or average median income or less so affordable housing, but we also want to see if we can't leverage that new construction to change the attitude of the market to a neighborhood as well.
Ann Thompson:
The Land Bank has already started acquiring properties for renovation.
Mike Grauwelman:
These would be typically houses that are in reasonable shape because we're permitted up to $60,000 in acquisition costs from the State in $30,000 for renovation, we're likely to do more than $30,000 worth of renovation to those houses, and then we will sell those as well.
Ann Thompson:
Grauwelman says the Land Bank is in discussion with other potential partners, including the Montgomery County, Port Authority County Corp, Habitat for Humanity and Citywide Development. As Director of the Land Bank for a decade, he says the most meaningful project involved fixing up the Pineview neighborhood. That's on the west side of Dayton, not too far from the VA Medical Center, Brick by Brick’s Emiko Moore spent time talking to Pineview residents about the evolution of the neighborhood and how the land bank stepped into assist. Hey Emiko.
Emiko Moore:
Hello. Pineview is a strong tight-knit community. Neighbors know and watch out for each other and people take care of their homes, and the neighborhood association is active and very engaged, but in 2017, residents were seeing some abandoned and rundown homes. They partnered with the Montgomery County Land Bank to reposition some of the problem properties, which helped the whole neighborhood. Let's take a listen.
Pineview, a neighborhood perched atop one of Dayton's highest points has long been a symbol of pride for its residents of more than 400 single family homes. Historically, an African-American community, it was built block by block in the 1950s and sixties providing a haven during times of redlining and housing discrimination. Julia Capers, first president of the Pineview Neighborhood Association, recollects.
Julia Capers:
It had a reputation of low crime, friendly neighbors and that's where I needed to be with my two kids. The neighbors know each other. We look out for each other, and that has continued to this very day.
Emiko Moore:
Karen DeMasi with Citywide, a nonprofit focused on community development who works with Pineview, is encouraged to see young people moving to this West Side neighborhood.
Karen DeMasi:
It has always been a pretty stable middle class neighborhood with a lot of home ownership for a city neighborhood. They're all different styles. There's some bungalows, there's some long ranches or some two stories, but it's kind of an eclectic mix of homes throughout that community.
Emiko Moore:
In the mid-1990s, construction of Highway 35 intersected Lakeside Lake, a recreational spot for the community, and over time the neglected body of water became unrecognizable. Julia Capers lives across from the lake and recalls,
Julia Capers:
Well, it's kind of like an eyesore because there was so much undergrowth and old trees and we had a lot of activity down there on the lake because they could hide among the brush and do whatever it was that they did.
Emiko Moore:
In 2016, the residents, as key advocates, started raising funds and volunteers for the lake cleanup. They partnered with Citywide to restore the lake to its former glory.
Julia Capers:
It's like a new facility and we appreciate it. The neighborhood appreciates it.
Emiko Moore:
At this time, many Pineview neighbors expressed concern to citywide about safety and property values with some abandoned and rundown homes in the area.
Julia Capers:
When you see vacant houses, that means that the yard is not taken care of and you get trash and some of the houses the younger drug dealers started. You get all types of negative things that you don't want, don't have control over.
Emiko Moore:
When DeMasi heard the community's concerns, she consulted the Montgomery County Land Bank. Paul Bradley is the executive director.
Paul Bradley:
One of the conversations we had with residents, this population is aging. A lot of homeowners who've been there for a very long time and they have seen their home values kind of slowly drop to a point where you might've needed a new roof or you might've, as you were aging, need to build a ramp on your home, but you weren't able to pull out a line of credit or have any equity in your house to accomplish that.
Emiko Moore:
The Land Bank working with the City of Dayton, Citywide and other community partners shared in a neighborhood meeting their thriving neighborhood initiative to stabilize the neighborhood.
Paul Bradley:
Again, in these tipping point neighborhoods, there's plenty of properties that are strong a well-maintained. That's what you want, a good mix of that already happening and then actionable properties that we can have some sort of positive benefit on.
Emiko Moore:
The first work was demolishing seven blighted properties on the main entrance and another five in the neighborhood. Lisa Parker Rucker was president of the Pineview Neighborhood Association during this time, it was
Lisa Parker Rucker:
Very positive. People were glad to have the quote eyesore taken down and it actually spruced up the entryway for the neighborhood. Being Gettysburg, South Gettysburg.
Emiko Moore:
The Land Bank pinpointed three homes that could be rehabbed and sold to raise values for the whole area. The initial values were $19 to $27 per square foot, but after rehab, we're selling from $50 to over $90 per square foot.
Paul Bradley:
Again, significantly raising those comps, showing banks that there is value out here, that this is a strong stable neighborhood.
Emiko Moore:
Abandoned or vacant homes also have a direct correlation to mental health and crime rates in neighborhoods.
Paul Bradley:
According to our counterparts at the city of Dayton, Pineview was the neighborhood that saw the greatest increase in home values and also one of the greatest reductions in crime.
Emiko Moore:
Today, many enjoy Lakeside Lake. Home values have stabilized and the dedicated neighborhood association continues to strengthen Pineview.
Julia Capers:
As long as we have our neighborhood association to speak the voice of the people in unity, I know that we will thrive as a neighborhood and it's helpful when we have outsiders like Citywide and the Land Bank who are willing to come in and make some contributions because we like where we are. It's why I'm still here.
Lisa Parker Rucker:
I just love the neighborhood. I love the pride. I love the togetherness. This feels like home.
Ann Thompson:
Thanks for that Emiko. The story of the Pineview decline has happened to so many neighborhoods. I really liked how the residents took an interest in fixing up a nearby lake, realizing it could help them too.
Emiko Moore:
Yes, I was just there recently and the lake looks beautiful. I saw many people outside enjoying Lakeside Lake, which has some new historical signs that were just put up.
Ann Thompson:
That's great. Well, where do things stand now?
Emiko Moore:
Right now, the three homes that were renovated are still occupied by the buyers. The entrance to the neighborhood has more green spaces, and according to the Dayton real estate agents, the average home price in the last year is around 120,000, so the market has stabilized.
Ann Thompson:
That's good news, seeing that home values are rising but still relatively
Emiko Moore:
Affordable. Yes, absolutely.
Ann Thompson:
We'll catch up with you later, Emiko for the takeaways. You can see a video story on the PBS app with Emiko as she shows you what the Pineview neighborhood looks like now. The Montgomery County Land Bank has been busy from 2011 to 2021 it demolished 1200 structures, renovated 83 units transferred 23 properties to new owners, as well as 70 commercial lots. In the Cincinnati area, The Port runs Hamilton County's Land Bank. It says in 10 years it has transferred 1000 properties to new and responsible end users, preserved $34 million in property values through demolition and stabilized more than 50 historic structures. The National Land Bank Network says land banks are helping make equitable inclusive neighborhoods and resilient communities possible. Here's Brian Larkin again.
Brian Larkin:
Land banks are the places in place to help people remain in their communities, stay in their homes, and then be proud of the things that they live around. So I think they're going to keep a strong core in a lot of the paces they are now and continue to grow incrementally.
Ann Thompson:
For example, with the help of land banks, the median sale price in Detroit grew an additional 12% a year, and one study showed cleaning and greening vacant lots can decrease gun-related violence nationwide by as much as 29%, but there are limitations and lawsuits. Coming up on Brick by Brick, we'll tell you about those limitations, but first, how the Hamilton County Landbank is hoping to make a difference in Cincinnati Sedamsville neighborhood.
Philip Denning:
For us to come here and start working in a way at such scale is really, I think, and they see that such a value to them and to their neighborhood,
Ann Thompson:
And a fruitful effort on vacant lots that's coming up on Brick by Brick.
Ame Clase:
Brick by Brick is made possible thanks to the generous support of so many, including Murray & Agnes Seasongood Good Government Foundation, Rosmary & Mark Schlachter, The Camden Foundation, Patti & Fred Heldman, DeeDee & Gary West, The Stephen H. Wilder Foundation, Judith & Thomas Thompson... a donation in memory of Frank and Margaret Linhardt, and more. Thank you. We couldn't do this work without you.
Speaker 13:
Hey, it's Hernz Laguerre Jr., one of the team members behind Brick by Brick. Our new show is about solutions for a thriving community, but if you think about it, we all have a different perspective of what a thriving community should look like. That's why we need to hear from you. We want to know what a thriving community looks like to you. Maybe it's more housing, more parks or stores or even safer sidewalks? Whatever your vision, we hope you'll share with us. You can do that by heading to the Brick by Brick show page on cetconnect.org or thinktv.org. There you'll find an audience question button. Just fill out the survey and that's it. We look forward to sharing your hopes and dreams with the rest of our neighbors in future episodes. Thank you.
Ann Thompson:
Welcome back to Brick by Brick. The Port which runs Hamilton County's Landbank is focusing much of its attention now on Sedamsville where it acquired more than 60 properties through a court judgment two years ago. Sedamsville is a hilly neighborhood on Cincinnati's West side along the Ohio River. About half of those pieces of property The Port acquired have buildings on them. Executive Vice President Philip Denning took brick by brick on a walking tour through a section of the neighborhood. Initially somewhere in terrible condition, he points to one.
Philip Denning:
We got into the property, we started stabilizing the property in the basement. We noticed, and our contractors noticed that you could see light like lots of light through the foundation, the Stone Foundation wall. I mean, that's the kind of building that would just literally fall into the street, which happens. So we stopped work and we fixed that and stabilized it
Ann Thompson:
In another home. The whole back wall was leaning out about a foot and a half, and on the verge of collapse, you wouldn't know it. Now The Port has stabilized that building, put in new cinderblock, replaced the roof with sheathing and rafters and redone the floor, and that's only the beginning. Where does the financing come from? Many different sources. Denning says, Hamilton County gets about $2 million a year from the delinquent tax that funds land banks. Some of that money has to be used for land stabilization,
Philip Denning:
Cleveland, Columbus. They don't have super hilly neighborhoods like this that have topography issues and hillsides and buildings falling down the hill. That's just not something they have to worry about, so we end up spending a lot more money on some of those issues, and we also have used that historic fabric to create new programs inside the Landbank that are unique to land banks.
Ann Thompson:
When properties are in the Landbank, they're exempt from property taxes. In addition, Denning says The Port can leverage money from the city and the county, and because it has a high risk tolerance, it can also accept some hard to use funds like grants from the Ohio Department of Development, the Ohio Department of Health and Community Development Block Grant funding,
Philip Denning:
And so one of the constant struggles we're in is improving the property as best we can, finding enough funding to improve it as best we can, and then selling it to a homeowner at an affordable price.
Ann Thompson:
The Port works with neighborhoods to review acquisitions and approve sales of property, making sure both are on the same page. We have a video extra of the Sad Adamsville tour. You can search it out on the PBS app or via Brick by Brick on your smart tv.
Ann Thompson:
If you drive around Cincinnati, you might see a community orchard on a land bank property. It's the idea of Chris Smyth, who in 2017, was working at the nonprofit Price Hill Will as sustainability coordinator, people would come to him with green space ideas.
Chris Symth:
There's only so many design exercises I could tolerate with a neighborhood with other neighbors where people would come up with these recommendations like, oh, we should put an amphitheater there. It's like really right next to someone's home. I don't think there's only so many amphitheaters we need in a neighborhood.
Ann Thompson:
He had another idea. Why not plant community orchards on vacant lots the Landbank was holding?
Chris Symth:
Something that we could get a bunch of volunteers around plant in a day, and then through slow tempered guidance or stewardship, I might refer to it as we can actually grow food for our neighbors.
Ann Thompson:
Smyth now, director of the Common Orchard Project, leases them from the Land Bank at no cost. By the end of this year, there will be 40 of these greater Cincinnati orchards, and while Land Bank property helped propel this project in the beginning, only a handful of the orchards are on Land Bank lots. Now Symth says many provide 10 to 20 households with much of their yearly fruit consumption, think peaches, plums, berries, and more so the land is being put to good use for the neighborhood.
There are limitations to land banking. The National Land Bank Network says with really hot real estate markets, if you start a land bank now, there won't be any abandoned property for you to get because everyone else is buying it. The Montgomery County Land Bank has changed its strategy because of that, it's pursuing distressed properties through sheriff sales and other means and is getting more aggressive with the owners of nuisance properties. Here's Mike Grauwelman again.
Mike Grauwelman:
So we are filing lawsuits, nuisance suits against property owners in targeted areas because there are limited resources to do that, to force the speculators to begin to do something with those properties.
Ann Thompson:
Other limitations include court challenges. Some property owners think Ohio and other states have been too aggressive in the way they take over their foreclosed property. Cleveland.com reports one lawsuit accuses the Cuyahoga County government of unlawfully taking millions of dollars in home equity from local property owners who fell behind on their taxes over the past two decades. It claims this systemic institutionalized multi-decade practice and policy to profit from property owners beyond the taxes and fees those property owners owed violates the constitution and largely affects residents who are poor, elderly or from minority communities. Among the key takeaways from a National Land Bank survey that more of the focus needs to be on affordable housing and land bank staff and boards should continue working towards racial equity and providing leadership opportunities to people who look like the communities they represent. Remember, if you want to learn more about land banks and Brick by Brick in general, there are plenty of resources. There are web articles, Hernz and Emiko’s video and audio stories and online extras. Go to cetconnect.org and thinktv.org and while you're there, click on one of the big green buttons to give some feedback or answer our current audience question. We'd really like to hear from you.
Emiko Moore is back in the studio.
Emiko Moore:
Hello.
Ann Thompson:
Hey, and we welcome Hernz Laguerre Jr.
Hernz Laguerre Jr.:
What's up y'all?
Ann Thompson:
Time for takeaways. One thing I noticed is that land banks have to walk a fine line when it comes to acquiring property through foreclosure. One of our sources, the Center for Community Progress wondered what is the most fair and equitable way to balance the interests of the property owner who's walked away from their obligations with the interests of the community?
Emiko Moore:
Yes, absolutely, and land banks generally do not want to hold onto properties for a long period of time. Their or mission is generally to return them back into productive use. They'll go in, they'll rehab a place, renovate it or demolish it, but they really want it to be working in the community. They go where the rest of the market doesn't want to go, and once the market wants to come back in, that's when they step back and find another area to help out.
Hernz Laguerre Jr.:
Another thing I think people should focus on is the compounded effect these blighted properties have on a community. I know a lot of people talk about that they're unsafe and they could be an eyesore, but they also decrease property value in the surrounding area. Companies don't want to invest in areas where property value is decreasing, so what do they do? They don't invest. This disinvestment leads to fewer jobs. Fewer jobs can lead to less economic opportunity, which unfortunately leads to higher crime in a particular area,
Emiko Moore:
And blight can be contagious. You really do not want it sweeping across a neighborhood or a community. Sure.
Hernz Laguerre Jr.:
If these land bankers are able to step in and revitalize these abandoned properties, I think it will have exponential benefits for these communities.
Ann Thompson:
Those are all good points. Some people are still concerned about what they see as overreach this fall in Ohio House. A bill looks to expand the methods by which land banks can acquire delinquent property even further. There are some Cleveland property owners who have filed suit claiming the government unlawfully took millions of dollars in home equity from them after they couldn't pay their property taxes. They point to a US Supreme Court decision last year where the court ruled that Minnesota violated the Fifth Amendment of the Constitution through the takings clause, and you can bet that land banks are watching this closely for
Emiko Moore:
Sure. I bet so.
Ann Thompson:
There are plenty of resources online. You could find them at cetconnect.org and thinktv.org. Thanks guys.
Hernz Lagerre Jr.:
No problem
Emiko Moore:
Thank you.
Ann Thompson:
Coming up on the next episode of Brick by Brick, Cincinnati is using predictive data analytics to keep people in their homes. Can math formulas prevent evictions?
Kevin Finn:
The newest thing that we're trying to do is let's go pre-eviction notice. Let's find people before they have an eviction notice in their hand and head off their sort of new or emerging crisis as early as we can.
Ann Thompson:
That's next time on Brick by Brick. That's our show. If you like what you hear, please rate and review our podcast. It helps make it easier to find. We hope you learn something, and if you did, please share it with your friends and family. For Emiko Moore and Hearns Laguerre Jr., I'm Ann Thompson. We'll be back soon with more solutions. Take care.
Our show is produced, hosted an edited by me, Ann Thompson with reporting and story editing from Hernz Laguerre Jr. and Emiko Moore. Our Executive producer of Mark Lammers. Our show consultant is Gloria Skurski. Gabe Wimberly is our audio engineer and mixer. Zach Kramer runs the lights and cameras. Derrick Smith is our production specialist and Jason Garrison is our production manager. Kellie May heads up our marketing and promotions, along with Mike Shea and Bridgett Dillenburger. Elyssa Stefenson handles the website and Steve Wright is our designer. Bill Dean and Andres Kruza are the engineers for the show and our Chief Content Officer is Colin Scianamblo. Our music is from Universal Production Music. Brick by Brick: Solutions for a Thriving Community is a production of CET and ThinkTV, Southwest Ohio PBS member stations.