Land bank legislation would give Allentown more tools to fight blight

Allentown is creating a tool to more aggressively address blighted conditions affecting many city neighborhoods.

Mayor Ray O’Connell’s administration introduced legislation this week that would designate the city’s Redevelopment Authority as a land bank, giving it broader powers to gain control of problem properties, marshal them toward more productive reuse and end a cycle of vacancy, abandonment and tax foreclosure. The goal is to boost neighborhood property values, increase tax revenue and reduce pressure on city personnel, including police and fire departments and building inspectors.

The bill will likely garner support from City Council, which in recent weeks has vowed to “wage war” on negligent landlords and do more to ensure residents have access to quality affordable housing.

Creating a land bank was one of the top initiatives recommended in Allentown’s Vision 2030 comprehensive plan, adopted in late 2019. More than two dozen land banks have been established across Pennsylvania since the state Legislature passed an enabling bill in 2012. A 2018 amendment allows municipal redevelopment authorities, such as Allentown’s, to act as land banks.

Land banks take control of vacant properties and direct their reuse. Unlike redevelopment authorities, land banks can acquire tax-delinquent properties at county sheriff sales without competitive bidding. In other words, depending on its budget, the city can take a number of foreclosed properties off the table before landlords and real estate speculators have an opportunity to bid on them.

It’s also quicker and cheaper than the eminent domain process the redevelopment authority uses now to acquire properties, “eliminating further deterioration of problem properties which in turn have a positive impact on the social and economic vitality within the city,” the city Department of Community & Economic Development wrote in a bill memo.

Land banks may negotiate with school districts and other taxing authorities to drop liens on properties they buy. These liens can sometimes exceed the total value of particularly dilapidated properties, so removing them makes it easier to return properties to market.

While a land bank holds a property, it doesn’t have to pay real estate taxes or municipal charges. If taxing authorities agree, land banks can also recapture up to 50% of real estate taxes of rehabbed properties for up to five years after the property is returned to tax rolls. This helps the land bank acquire additional blighted properties, though it can also seek grant funding and both public and private lending opportunities.

Land banks must maintain a public inventory of properties they own and hold regular monthly public meetings. They are authorized to sell, transfer, lease, grant or mortgage properties to private investors of their choice, and have considerable oversight of the redevelopment process. Based on the city’s land use goals, they can dictate whether a given site ought to be redeveloped for residential, commercial, industrial or some other kind of development.

Since 2010, more than 200 land banks and land banking initiatives have launched across the United States, according to the Center for Community Progress. They could pick up further steam as communities brace for the mediumand long-term consequences of the COVID-19 pandemic. Last summer, a bill was introduced before Congress that would create a nonprofit national land bank network providing technical assistance, funding and other resources to local land banks.

Allentown City Council’s community & economic development committee will review the proposed land bank bill next week.

As council strives to become more proactive in holding problem landlords accountable, the land bank is a “key part of that strategy,” Councilmember Joshua Siegel said Wednesday.

“If we can intercept properties before they become a problem, that will be a huge cost savings,” he said. “It will also help advance initiatives like affordable housing and improving the quality and strength of neighborhoods. I urge everyone to make this a priority.”