Land banks’ parcel decisions confusing
Some seem to favor parcels in white areas
Al Jenkins has what neighbors call “the nicest house on the block.” The renovated historic home has fresh gray paint and manicured landscaping.
A side lawn looks like it belongs with his house. Jenkins fenced it and cuts the grass. But the City of Cleveland Land Bank won’t sell the property to him. He said land bank officials told him they are saving it for future development.
Down the street from Jenkins, across from the Cleveland Clinic, bulldozers buzz around an apartment construction site on land the city gave to a
developer from land bank and purchased property. Rent at the new Addis View Apartments will cost about $2,000 for a 2-bedroom in a ZIP Code with a median income of $29,225, according to Census data.
Jenkins is happy about the new development. As a landlord in the area, he's not only a neighbor but also a small-business owner heavily invested in the neighborhood.
“Anything coming to this neighborhood is going to be a plus for us,” Jenkins said.
And yet, he and others are troubled by and unclear about how decisions are made in determining who gets access to land bank properties and who doesn't.
His Cleveland block resembles a citysize version of Swiss cheese: historic homes interspersed with vacant land bank lots. Jenkins came from a suburb in 1982. He was tired of spending all of his factory income on housing. He eventually bought and fixed up many more rental houses.
So why give properties in the same area to one company and not to Jenkins?
The City of Cleveland did not respond to multiple requests for comment. The city land bank should not be confused with the Cuyahoga County land bank, which said it has no such policy.
Eye on Ohio analyzed property remediation projects in several Ohio counties for a deeper look at a process that has helped transform portions of the Rust Belt and cities beyond it over several years. The analysis was done with “machine learning,” also known as artificial intelligence, which uses large sets of data to find nuances that a human might not be able to recognize.
The analysis shows that certain factors, such as proximity to valuable properties or the school district in which the property sits made a property more likely to be picked for remediation in some counties. And in certain areas, officials responsible for economic recovery are the same people in charge of that remediation.
In all six counties analyzed – Allen, Athens, Cuyahoga, Franklin, Hamilton, and Montgomery – the amount of taxes owed on each property either didn't play a practical role, or the computer model became more accurate by picking parcels with lower tax bills, even taking outliers into account.
Eye on Ohio picked these six counties for these reasons: Cuyahoga and Montgomery have the largest and most active land banks, so reporters started with those. Hamilton and Franklin include two of the other largest cities in Ohio. Then they picked counties in the southeast and northwest to try to cover as much of the state as possible.
In Cleveland, for example, the analysis showed these key findings:
● In absolute numbers for the years 2018 through September 2021, parcels going to the land bank in African-american neighborhoods far outnumbered those in school districts where most students are white: Just 72 properties in majority-white school districts went to the land bank, compared to 2,721 in districts in which the majority of residents
are people of color.
● Keeping the amount of taxes owed and the proximity to high-value properties constant, the computer model predicted that a tax-delinquent property in a majority-white district would be chosen over one in a predominantly minority one. Homes in majority-white districts and in the land bank owed less money as a percentage of their lot value (139%) than homes in minority districts (351%.) (Though the median was lower.)
● Keeping the amount owed and the school district constant, parcels were more likely to end up in the land bank if they had a greater number of parcels worth $10 million or more within 500 meters (1,640 feet ) of their location.
● Although cleaning up neighborhoods is a function of land banks, officials didn't always pick the most decrepit properties to remediate. Of the top 2,793 properties by amount and percentage of taxes owed, few ended up in the land bank.
● Whole categories of properties were excluded, including mobile homes,
even though trailers were one of the top categories of residences behind on property taxes.
Land bank history
According to the National Land Bank Network at the Center for Community Progress, there are more than 200 land banks nationwide. Eighty-two of those are Ohio county land banks, and several Ohio cities have land banks as well.
Land banks can sell properties in the land bank or give them away. On rare occasions, some Ohio land banks fix up houses and sell them.
Land banks started in Colorado in the 1970s. They were later adopted, particularly in Rust Belt industrial cities, which kept expanding their reach. In 2009, Ohio passed Senate Bill 353, allowing a “new breed of county land bank.” In the words of creator Gus Frangos, they became land banks “on steroids.”
The new county land bank “not only embraces economic and industrial development, but also community development, which is often necessary to jump start or ‘set the table’ for economic development,” Frangos wrote in a 2018 continuing legal education course on land banks.
Land banks now are vital public agencies. The goal is to turn decrepit, often-abandoned properties into viable homes – before they attract pests and crime.
Various studies show they can help stabilize housing prices. And very little funding comes from taxpayers. The bulk of their revenue flows from tax-delinquent properties.
“The key problem in a place like Toledo is the changes that happen in industrialization,” said Shelley Cavalieri, a property law professor at the University of Toledo. “We just have too many buildings for our community.”
She said that in 1970, the city of Toledo had 384,000 as a population. By 2019, that number had dropped to 273,000. So it saw a diminution rate of over 25% of the population in 50 years.
“Now, it’s econ 101 to recognize that if you have housing for nearly 400,000 people but only humans close to 300,000, you have an oversupply in housing and insufficient demand,” Cavalieri said. “So the thing that the land banks did, by altering the number of properties within the city, they drove property values back up.
“Distressed properties lower the sale of nearby homes by something like 5%,” she said. “When the land bank takes possession and does some basic mowing and boarding, it reduces that by about a percent. Once a demolition goes through and a vacant lot is owned by a land bank, it reduces that by another 2%.”
But land banks also have created tension between officials with more decrepit properties than they could ever remediate and residents who consider their neighborhoods a top priority.
Columbus
Despite Columbus’ population, the Central Ohio Community Improvement Corporation-franklin County Land Bank has remediated far fewer properties than some other communities – 3,979 as of publication.
But Columbus has had the opposite problem compared with other Ohio cities with its housing stock: a growing population and too few houses, particularly affordable ones. According to the U.S. Census, between 1970 and 2020, Cuyahoga County’s population dropped 26.5% from 1.7 million to 1.3 million. Franklin County, in the same time period grew 58.9%, from about 800,000 to 1.3 million.
Franklin County saw 70% of all of Ohio’s population growth in the last decade, according to the latest Census. Columbus’ growth rate in the last decade, 15.1%, surpassed even fast-growing metropolitan areas such as Washington, D.C. (14.8%), Nashville (14.7%), Portland (11.8%), Phoenix (11.2%) and Las Vegas (9.9%). In that time, 39% of vacant and abandoned housing disappeared
in Franklin County.
Of the 63,685 unique parcels behind on property taxes in the past three years, just 490 went to the land bank, 187 of which still exist to geolocate.
The majority (150) were in minority school districts. But among homes owing the same amount, parcels in majority-white school districts were more likely to go to the land bank. So were parcels within a mile of a parcel worth at least $10 million.
The city has targeted certain areas such as the Linden neighborhood, just north of Downtown and east of Interstate 71, but that doesn’t mean they can fix the affordable-housing problem, said Michael Wilkos, senior vice president of community impact at the United Way of Central Ohio, who studies population shifts to see where to send donation dollars.
“Every single structure can be saved if you want to put a lot of money into it,” Wilkos said. “But there are market constraints on that. There was a lot of housing stock in Linden that had been vacant for so long that it had deteriorated to the point where its salvation was unlikely.”
Wilkos said that lack of affordable housing comes from chronic underbuilding in the Columbus area for the past decade and not enough wage growth to catch up to rising rents.
“Relative to other neighborhoods, the West Side is still a bargain,” he said. “And there’s still a lot of vacant lots and a lot of vacant houses on the West Side. That’s where an organization like the land bank can really shine.
“How can we as a community have some vacant lots, constructed with houses, and bring some vacant houses back to life? How can we keep them affordable? So you don’t experience gentrification.
So that’s why I can say with a high level of support, Columbus needs a strong land bank,” Wilkos said.
Dayton
In Montgomery County, of 34,627 delinquent parcels in 2018, less than 1% (281) went to the land bank or were taken by the city in tax foreclosure by late 2021. Two hundred seventy-eight of those properties owed money, with a median $4,049 and an average of $9,395.
Yet, of the top 281 worst offenders that year in terms of the amount of taxes owed, just seven were actually foreclosed upon. Those parcels owed an average of $78,207 and a median $53,577. Three years later, 80.9% of them are still delinquent.
Unlike Cuyahoga County though, in Montgomery County, for two parcels owing approximately the same amount, proximity to the most-expensive real estate didn’t matter – and neither did the racial composition of the school district. The net amount of delinquency wasn’t practically significant.
Cincinnati
Hamilton County had the weakest relationship between the amount owed and later entry to a land bank. The median amount owed for land bank properties was lower, $407, than the median for those not going to a land bank, $1,025.
And again, between two parcels owing the same tax debt, those in majoritywhite school districts were more likely to be picked.
Jim Crowley, Ron Calhoun, Sara Stoudt, and Rich Weiss contributed to this project.