Land banks can and are having a substantial economic impact in the communities they serve, according to a first-of-its-kind study released today by the Michigan Association of Land Banks (MALB).
Michigan has been a pioneer in the use of land banks to rehabilitate and re-use abandoned, blighted and mainly tax-foreclosed properties, according to MALB president Kelly Clarke. Enabling legislation was signed as recently as 2003, and the study by Dynamo Metrics and Public Sector Consultants is the first time an independent in-depth review of the impact of their work has been done on a statewide basis for Michigan. Clarke said it is only the second such study done nationally.
“Land banks are having a significant economic impact. They are significantly impacting property values around the properties that are touched by land banks,” Clarke said.
“This report validates what we have all known for years: Land banks matter. Land banks make a difference and land banks are a significant tool in Michigan’s comeback,” Josh Burgett, director of the Michigan Land Bank
Some of the key findings included case studies of three of Michigan’s 42 land bank operations.
– Over the last nine years, the Kalamazoo County Land Bank has infused nearly $20 million back into the local economy and created an estimated 270 full-time jobs in construction, landscaping and related industries.
– Since 2011, the Calhoun County Land Bank has demolished or rehabbed nearly 650 homes, creating as many as 87 full-time jobs and putting more than $6.3 million back into communities across the county.
– The Benzie County Land Bank has intervened in 17 properties since 2012. As a result, nearby home values have increased by more than 4 percent.
“We do think there is a lot of untapped potential that land banks have, particularly now that we are looking at the Great Recession in our rear view mirror,” Clarke said. “Land banks have spent a lot of time digging out from the recession dealing with a lot of very distressed properties through demolition. Now many land banks have significant inventories of vacant property, and we are experiencing some good positive signs in Michigan in terms of economic prospects.”
But the report also concludes that “significant uncertainty exists for Michigan land banks with respect to current and future funding.”
U.S. Rep. Dan Kildee (D-Flint Twp.) wrote the introduction to the report.
“Land banks have proven their resourcefulness and nimbleness. The data compiled here demonstrates how impactful land bank interventions are, as well as the financial strain under which they typically operate. Given the well-documented successes of land banks, it is time to imagine where they could go with sufficient funding and support throughout the state,” Kildee stated.
Clarke explained the while the effect is to generate economic development in the long term, they begin by working with properties no one else wants.
“The unique thing with the properties land banks get is land banks receive the property that everybody else walked away from. The mortgage holder has walked away. The private property owner has walked away,” Clarke explained “. . . In many cases, they have negative, value particularly in the case of industrial and commercial property where there are environmental issues on those properties. Cleaning those environmental issues up have very substantial costs associated with them, much more substantial costs of the actual value of the property itself.”
Even cleaning up unsaveable residential property up often costs more than what the vacant parcel will sell for.
“Land banks are in the position of being the property holder of last resort. They are receiving the property that is so depleted that every other party has walked away,” she said.
Article Source: MIRS