1. Land Banking: An Opportunity
for Southern New England?

2. From Bubble to Crisis
Over 14.2 million year-round housing units were vacant in 2010 . . . a 3.8
million increase from 2000. U.S. Census Bureau, Table 982, Total Housing Inventory for
the United States: 1990 to 2010, (2012).
In July 2012:
Overall foreclosure activity had decreased since July 2011.
Bank repossessions decreased annually for the 21st straight month.
“Foreclosure starts” increased 6% from July 2011. CT led (201% increase), NJ
(164% increase), PA (139%), IN (83%), and MA (65%). RealtyTrac’s Foreclosure
Market Report (July 2012), available at www.realtytrac.com.
CA, AZ, and FL have highest foreclosure rates.

3. What Is a Land Bank?
Land banks are governmental, quasi-governmental, or nonprofit entities that
acquire distressed properties and then hold and manage them for future use
or resale.
They typically acquire properties through tax foreclosure, mortgage
foreclosure, market transfers, and/or donations.
They maintain properties and rehabilitate them through improvements,
redevelopment, or demolition.

5. Genesee County Land Bank Authority
This land bank became a remarkable success and a model for other land
banks in response to the mortgage crisis and the Great Recession.
Between 2004 and 2009, it repurposed 1,500 properties.
GCLBA acquires most of its properties through tax foreclosure.
It receives half of the property taxes that are collected on the properties for
the first five years after they are transferred.
Michigan’s Delinquent Property Tax Foreclosure Act of 1999 and Land Bank
Fast Track Act in 2003 paved the way for its success.

6. Cuyahoga County Land Reutilization Corp.
CCLRC was established in 2009 as a nonprofit community corporation.
In just over a year, CCLRC acquired 495 properties, demolished 167
properties, and transferred 80 properties to cities or redevelopers. It now
acquires about 100 per month.
CCLRC is a private nonprofit corporation, but also has key public powers.
CCLRC has a reliable and significant funding stream, which is approximately
$7 million per year. It is primarily financed through the payment of interest
and penalties on delinquent property taxes and assessments.
Most of CCLRC’s properties come from Fannie Mae, HUD, and
major lenders.

7. New York’s Land Banks
NY passed legislation in July 2011 authorizing the creation of 10 land banks
to acquire tax delinquent, foreclosed, vacant, or abandoned properties.
Any foreclosing governmental unit (“FGU”) can apply to the state to create a
land bank, which will be a nonprofit corporation.
As of May 2012, five land banks were approved in New York:
The Cities of Buffalo, Lackawanna, and Tonawanda, as well as Erie County
The City of Syracuse and Onondaga County
The City of Schenectady, County of Schenectady, and City of Amsterdam
Chautauqua County
The City of Newburgh

8. Saving Our Neighborhoods: Rhode Island
Housing’s Land Bank Program
A presentation to the 2012 Southern New England
Planning Conference, September 21, 2012, Hartford, CT

9. Outline of Presentation
• History and Intent of Program
• Key Aspects
• Recent Trends
• Examples of Properties
• Conclusion
Rhode Island Housing
SNEAPA Conference, 9/21/2012 9 of 20

10. History and Intent of Program
• Authorized in 1990s became active in 2001
• Last program change enabled provision of
bridge financing
• Primary purpose to reduce barriers to the
production of long-term affordable homes
• Also used as tool for neighborhood
revitalization
Rhode Island Housing
SNEAPA Conference, 9/21/2012 10 of 20

11. Key Aspects: Who
• Rhode Island Housing is authorized to acquire and
hold properties on behalf of eligible developers for
a limited period of time
• Interdivisional committee makes decisions
• Eligible Developer:
– Government entity
– Public housing authority or redevelopment agency
– Non-profit corporations
– Partnerships or joint ventures of eligible developers
Rhode Island Housing
SNEAPA Conference, 9/21/2012 11 of 20

12. Key Aspects: What
• Threshold Requirements:
– Infrastructure
– Ability to proceed
– Consistent with zoning, or dimensional variance
– No other sources of funding to secure property
– Identify all sources of funding for development
– Relocation plan, if applicable
Rhode Island Housing
SNEAPA Conference, 9/21/2012 12 of 20

13. Key Aspects: What (cont.)
• Evaluation:
– Meets threshold requirements, especially Holding Period
– Developer capacity
– Financial feasibility
– Consistent with neighborhood revitalization, or
– Consistent with smart growth
– Prefer unoccupied properties
– Produces long-term affordable homes
– Environmental Impact on surrounding area
Rhode Island Housing
SNEAPA Conference, 9/21/2012 13 of 20

14. Key Aspects: What (cont.)
• Developer Agreement:
– Pays for appraisals and title searches
– Pays for “carrying costs,” including reasonable
interest
– Rhode Island Housing determines steps to ensure
property stability and safety of tenants, if applicable
– If not acquired by agreed-upon Holding Period, Rhode
Island Housing has right to terminate and sell
Rhode Island Housing
SNEAPA Conference, 9/21/2012 14 of 20

15. Key Aspects: What (cont.)
• Option for Bridge Financing:
– New since 2001
– Exercised when Property is occupied
– All commitments for financing are secured
– Demonstrated ability to repay within six months, or
specified date
– Demonstrated ability to manage occupied property or
provide relocation of tenants
Rhode Island Housing
SNEAPA Conference, 9/21/2012 15 of 20

16. Recent Trends: Investment History
Rhode Island Housing Annual Investments in Land Bank Program
2000-2012
$9,000,000
$8,000,000 $7,826,454
$7,000,000
$6,000,000 $5,747,663
$5,586,337
$5,319,895
$4,958,346
$5,000,000 $4,815,930
$4,000,000
$3,470,253
$3,000,000
$2,445,210
$2,000,000
$1,348,155 $1,419,065
$1,000,000
$528,049
$307,106
$15,390
$0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Rhode Island Housing
SNEAPA Conference, 9/21/2012 16 of 20

17. Recent Trends: Investment History (cont.)
• In the last 13 years, Rhode Island Housing has made nearly
$44 million worth of investments in Land Bank properties
• Historic increases in property values drove significant
investment from 2002-2008 during which 86% of total was
made
• Most urban purchases are of existing multi-family buildings,
some to be demolished, purchases range from $150K at the
height of the market to recently under $40K
• Suburban purchases vary greatly—from a high of $382K/acre
for Block Island to $7,300/ac for large parcel in Burrillville
Rhode Island Housing
SNEAPA Conference, 9/21/2012 17 of 20

18. Recent Trends: Investment History (cont.)
• History reflects trends pertaining to mission of
Rhode Island Housing, state’s efforts and recent
economic crisis
• From urban multi-families through larger purchases
in towns seeking to reach goal of 10% long-term
affordable homes
• Most recently additional vehicles for other land bank
programs
Rhode Island Housing
SNEAPA Conference, 9/21/2012 18 of 20

19. Recent Trends: Other RI Programs
• HUD Neighborhood Stabilization Program
– $4.35M of $19.6M award used for Land Bank
– 49 properties in 11 targeted cities
– Approximately 100 homes developed
• State Housing Acquisition and Rehabilitation
Program (SHARP)
– Capitalized by CDBG funds from RI Office of Housing and Community
Development
– Administered by statewide non-profit organization, the Community
Housing Land Trust of RI
Rhode Island Housing
SNEAPA Conference, 9/21/2012 19 of 20

20. Achieving Affordable Homes: Block Island
Rhode Island Housing
SNEAPA Conference, 9/21/2012 20 of 20

21. Achieving Affordable Homes: Block Island (cont.)
Rhode Island Housing
SNEAPA Conference, 9/21/2012 21 of 20

22. Saving Our Neighborhoods: Providence
Rhode Island Housing
SNEAPA Conference, 9/21/2012 22 of 20

23. Saving Our Neighborhoods: Providence (cont.)
Rhode Island Housing
SNEAPA Conference, 9/21/2012 23 of 20

24. Saving Our Neighborhoods: Pawtucket
Rhode Island Housing
SNEAPA Conference, 9/21/2012 24 of 20

25. More Work To Be Done: Providence
Rhode Island Housing
SNEAPA Conference, 9/21/2012 25 of 20

26. More Work To Be Done: Providence
Rhode Island Housing
SNEAPA Conference, 9/21/2012 26 of 20

27. Conclusions
• Land banking facilitates an organization's ability
to assemble critical mass of properties for large
scale redevelopment/revitalization
• Must carefully evaluate the availability of
resources for redevelopment and the viability of
each proposal
• Evaluate neighborhood trends - what can be built
today may not be appropriate for tomorrow
Rhode Island Housing
SNEAPA Conference, 9/21/2012 27 of 20

28. For more information:
Carol Ventura
Director of Development
Rhode Island Housing
(401) 457-1129
cventura@rhodeislandhousing.org
Rhode Island Housing
SNEAPA Conference, 9/21/2012 28 of 20

30. Land Banking in
Massachusetts
Erin Graves, Policy Analyst

31. Overview
• Why the Fed cares
• Land Banks in context
• Applying the land bank model in
Massachusetts
• Receivership as an alternative

32. Why the Boston Fed cares
• Mission
• My work

33. “Promoting Economic Growth in Lower Income Communities”
The Federal Reserve’s Community Development Unit promotes this agenda
through:
• Developing Cutting Edge Research
•Convening a Broad Spectrum of Constituencies
•Identifying and Disseminating Approaches That Work
www.bos.frb.org/commdev

34. NSP Study
• Instruments
– Survey
– Open ended
– Parcel condition
• Administration
– Pre and post treatment

35. A little Context
• Other Massachusetts Land Banks
– Massachusetts Land Bank of 1740
– Massachusetts Land Bank Fund 1980s
– Cape Cod and the Islands Land Banks
1990s
• Nantucket Land Bank
• Martha’s Vineyard Land Bank
• Cape Cod land bank

36. Land Banks:
An Option for Low-Value Properties
• Some REO properties are low value and less likely to be
viable in private market
• About 5 percent of properties in the REO inventory of
the GSEs and FHA are appraised at less than $20,000
• In some markets, the share is significantly higher
• In these markets, low-value properties are less suitable
for disposition through sales in the owner-occupied
market or through rental market strategies
• Alternative disposition strategies may be needed

37. Land Bank capacity
• Limited capacity nationwide
– Institutional infrastructure
– Funding
• Land banks and low value properties
– ½ GSE and FHA inventory of low-value REO properties in
metropolitan areas with an existing land bank.
– Existing land banks have limited resources
• Strategies
– Consider increasing local funding
– Create a national land bank program
– Such initiatives would need appropriate controls

38. Similarity to Banks
• Four analogous functions
– Storing assets
– Stabilizing secondary markets
– Holding capital reserves
– Operating within a regulatory framework
• Dissimilarities
– Banking: National and international
markets
– Land banking: neighborhood stability and
land-use planning

39. Foreclosures in Massachusetts
• Areas
– Boston metro
– Shrinking cities
• Low value locations
• Multi jurisdictional

40. Applying the land bank model to
MA
• Can mitigate extremes in the regional real
estate
– Shrinking cities
– Development pressure
• Should be done in conjunction with regional
and master planning
• Funding streams
– State level real estate taxes and fees
– NSP
– New sources via Massachusetts legislature or
Federal funding

41. Target properties in
Massachusetts

42. Target properties in
Massachusetts

43. Considerations and caveats
• Foreclosures: a symptom not a cause
• Maintaining properties both fiscally and physically
– No standardized funding stream
– NSP is complete
– A collection of properties that have no market value
– Staggered sites
– Abutter issues
• Property disposition
– Requires sophistication
• Land banks are government entities that have the ability to purchase
and sell real estate, clear titles, and accept donated properties.
Properties may be rehabilitated as rental or owner-occupied housing, or
demolished, as market conditions dictate.**

44. Receivership: An alternative
• What is it?
• Why is it used?
• Key players and processes
• Who qualifies
• Funding streams

46. CONNECTICUT: THE LAND
OF STEADY HABITS AND
ALMOST NO LAND BANKS
By Timothy D. Bates

47. Land Bank “Lite”
The Connecticut Approach
1. Focuses on environmentally-
distressed property or inner-
city housing.
2. Tends to work off of existing
State statutes.
3. Uses State and federal
incentives.

48. The State has an
authorized land bank
program, but it is
currently not funded.
See Section 8-214d.

49. LAND BANK PROGRAM
This program lasted 10 to 15 years, but went into
dormancy in about the year 2000.
It was run by nonprofits, including the Christian
Activities Council of Hartford.
It provided affordable housing for 250 families in the
Hartford region.
Limited to nonprofit corporations, funded by State
bonding. See Section 8-214e.

50. Build your own land bank by selling tax
liens.
-- Used by Plainfield and
Norwich to attract
developers to old industrial
sites.
-- Tax liens sold at a deep
discount.
-- Protects the municipality
from taking on polluted
property.

51. Authorized by Section 12-195h, which reads:
Any municipality, by resolution of its legislative body, as defined
in section 1-1, may assign, for consideration, any and all liens filed
by the tax collector to secure unpaid taxes on real property as
provided under the provisions of this chapter. The consideration
received by the municipality shall be negotiated between the
municipality and the assignee. The assignee or assignees of such
liens shall have and possess the same powers and rights at law or
in equity as such municipality and municipality’s tax collector
would have had if the lien had not been assigned with regard to the
precedence and priority of such lien, the accrual of interest and the
fees and expenses of collection. The assignee shall have the same
rights to enforce such liens as any private party holding a lien on
real property.

52. The development agreement allows
the municipality to acquire the tax
liens if:
-- The developer does not complete
due diligence
-- The developer does not file
quarterly progress reports
-- The developer does not commence
foreclosure by a certain date or
conclude it by a certain time
-- As long as the buyer is not in
default, and the municipality
continues to transfer annual tax
liens
-- The advantage to the municipality
is that it involves a developer in an
otherwise unmarketable property

53. -- The advantage to the
municipality is that it
involves a developer in an
otherwise unmarketable
property.
-- The advantage to the
developer is that it creates
legitimacy in negotiations
with environmental
regulators and lienholders.

54. ANOTHER APPROACH
Local development
corporations use tax credits
to purchase homes out of
foreclosure and improve
them.

55. Funded by the Department of
Revenue Services through the
Neighborhood Assistance Act
Program.
-- These State tax credits are
funded by Connecticut
businesses, particularly utilities
and insurance companies and
provide funding for construction
and rehabilitation of dwelling
units.
-- To sign up for the program,
the state companies must file an
application with the Connecticut
Housing Finance Authority.

56. The program targets certain
neighborhood clusters of 3 to
5 homes and seeks to connect
and build around those
clusters.
-- It improves and sells houses
to qualified homeowners.
-- Neighborhood services in
New Haven maintains an
inventory of 35 homes and
tries to turn over 10 a year.
-- It uses tax lien assignments
and foreclosures to “fill in”
some clusters.

57. Science Park Development Corporation has
utilized tax foreclosures to enlarge or fill in its
88-acre industrial site in New Haven.
--A nonprofit corporation represented by the
City of New Haven, Yale, property owners,
and neighborhood stakeholders.
-- Originally established by United States
Repeating Arms Corp., Olin, the City of New
Haven, and Yale.
-- Took over property by agreeing to limit the
environmental liability of USRAC.

58. Science Park
Development Corp.
has been funded over
the years by State
DECD and federal
HUD money.
-- Targets
surrounding
properties for
acquisition and tax
credit foreclosures.

59. ANTI-BLIGHT
The anti-blight ordinance can help around the edges. C.G.S.
Section148(c)(h):
Make and enforce regulations for the prevention and remediation of housing
blight, including regulations reducing assessments and authorizing
designated agents of the municipality to enter property during reasonable
hours for the purpose of remediating blighted conditions, provided such
regulations define housing blight, and further provided such regulations
shall not authorize such municipality or its designated agents to enter any
dwelling house or structure on such property, and including regulations
establishing a duty to maintain property and specifying standards to
determine if there is neglect; prescribe fines for the violation of such
regulations of not less than ten or more than one hundred dollars for each
day that a violation continues and, if such fines are prescribed, such
municipality shall adopt a citation hearing procedure in accordance with
Section 7-152c.

60. Section 12-183 creates a new program
administered by DEEP to encourage
investment in Brownfields.
• Promotes economic development by
bona fide purchasers, innocent
landowners, or contiguous property
owners.
• Does not apply to properties on the
National Priority List, the Connecticut
Superfund Priority List, or RCRA
properties.
• Currently limited to 32 properties per
year.
• Allows properties to avoid Transfer Act
and off-site liability.

61. Connecticut’s programs
are: limited, targeted,
incremental.
• Reflect a stable
population, as opposed to
Midwest industrial cities.
• As a result, Connecticut
cities do not own the
large inventory of
foreclosed or abandoned
properties.
• And the future: a similar
cautious approach?