Revitalizing Foreclosed Properties with Land Banks

by HUD USER

1
U.S. Department of Housing and Urban Development
Office of Policy Development and Research
Revitalizing Foreclosed
Properties with Land Banks

Visit PD&R’s website www.huduser.org to find this report and others sponsored by HUD’s Office of Policy
Development and Research (PD&R). Other services of HUD USER, PD&R’s Research Information Service,
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Prepared for:
U.S. Department of Housing and Urban Development
Office of Policy Development and Research
Prepared by:
Sage Computing, Inc.
Reston, VA
August 2009
Revitalizing Foreclosed
Properties with Land Banks

The contents of this report are the views of the contractor and do not necessarily reflect the views or
policies of the U.S. Department of Housing and Urban Development or the U.S. Government.

iii
Table of Contents
Introduction ...........................................................................................................................1
What Are Land Banks? .................................................................................................. 1
History .............................................................................................................................. 2
What Do Land Banks Do? ...................................................................................................2
Benefits of Land Banks .........................................................................................................3
Emerging Trends ...................................................................................................................4
Land Bank Challenges .......................................................................................................... 6
Getting Started ......................................................................................................................6
Appendix A — Genesee County Land Bank Authority .................................................. 9
Appendix B — Baltimore City, Maryland .......................................................................... 12
Appendix C — The Fulton County/City of Atlanta Land Bank Authority .................16
Endnotes ................................................................................................................................19
List of Figures
Figure 1: Land Bank Functions ............................................................................................4
Figure 2: Timeline for Mortgage Foreclosures ...................................................................6
Figure A1: Percentage of Total Vacant Housing Units
in the city of Flint and Genesee County, Michigan ............................................................9
Figure B1: Baltimore City, Maryland’s Project 5000 Results ...........................................13
Figure C1: Fulton County/City of Atlanta Land Bank Authority
Transfer of Property Process ................................................................................................18

1
When properties remain vacant for prolonged periods, they can fall into disrepair,
become neglected, and eventually be abandoned by their owners. Abandoned
properties pose significant fire and safety hazards, attract
vandalism, and generate criminal activity.
3
These properties create
a ripple effect, lowering adjacent property values and contributing
to the decline of entire neighborhoods. A 2005 report prepared
for the Homeownership Preservation Foundation notes that a
single foreclosed unit in a Chicago neighborhood reduced the
property values of 13 homes located within 150 feet.
4
In addition,
communities with a large number of tax-delinquent properties lose
considerable revenue and further burden local governments with
increased maintenance and service costs. For instance, according to
a National Vacant Properties Campaign report, Detroit, Michigan
spends $800,000 a year on vacant lot cleanup alone.
5
While it’s in a community’s best interests to promote the
redevelopment of abandoned and tax-delinquent properties, there
are a number of barriers that inhibit progress, such as complicated
state tax foreclosure processes and a lack of local government
mechanisms to regain control of such properties. Some states allow
tax liens to be sold at auctions, where buyers (usually speculators)
have no immediate interest in returning the property to reuse. In
other instances, properties that remain unsold at auctions become
government-owned through a lengthy foreclosure process, during
which time they decline in value and potential use.
To ameliorate the negative effects of foreclosures, some com-
munities are creating public entities — known as land banks — to
return these properties to productive reuse while simultaneously
addressing the need for affordable housing. This report examines
the concept of land banking and discusses barriers and solutions
to the successful implementation of land banks. The report also
contains case studies from three local jurisdictions — Genesee
County, Michigan; Atlanta, Georgia; and, Baltimore, Maryland
— that detail their experiences in land banking.
WHAT ARE LAND BANKS?
Land banks are governmental or nonprofit entities that acquire, hold, and manage
foreclosed or abandoned properties. Enabled by state legislation and enacted by local
ordinances, these legal entities are typically governed by a board of directors that
F
oreclosures are at the forefront of issues affecting today’s housing market. The volume of
foreclosures has become a significant problem, not only to local economies, but also to the
aesthetics of neighborhoods and property values therein. At the same time, middle- to low-
income families continue to be priced out of the housing market while suitable housing units remain
vacant. In 2008, the mortgage foreclosure crisis gripping the nation added over 1.2 million foreclosed
homes, increasing the inventory of vacant housing units.
1
According to the U.S. Census Bureau, there
were over 14 million vacant units (year-round housing units intended for occupancy at any time of
the year) in the nation during the first quarter of 2009, up from 12.6 million units in 2006.
2
A dilapidated doorway in Baltimore, Maryland.
INTRODUCTION

2
adhere to bylaws and articles of incorporation specifically tailored to meet the needs
of individual communities. Funded with local government allocations or revenue
from operations, they can be staffed by independent, full-time employees or by local
government employees on a part-time basis.
HISTORY
Contemporary urban land banks were created in response to a large number of tax-
delinquent properties and widespread property abandonment in cities experiencing
a loss of industrial jobs.
6
One such land bank was established in St. Louis, Missouri
in 1971 to acquire tax-foreclosed properties that remained unsold at sheriff sales.
7

Operations under the St. Louis Land Reutilization Authority include acceptance
of donated property, assembly, and consequent maintenance of land to facilitate
future development. Five years later, the state of Ohio adopted land bank-enabling
legislation.
8
Following passage of the legislation, the city of Cleveland established a
land bank to acquire and dispose of tax-delinquent properties. Ohio subsequently
adopted legislation in 1988 that further strengthened the land bank statute by
expediting the tax foreclosure process and allowing tax abatements on land bank
property.
In 2003, the state of Michigan adopted one of the most progressive land banking
legislations in the nation (further discussed in Appendix A). In addition to granting
city and county land bank authorities the power to assemble, sell, or redevelop
large numbers of abandoned properties, Michigan’s legislation allows land bank
authorities to utilize tax-increment financing for the redevelopment of vacant and
abandoned properties.
10
Other states that have adopted land bank legislation include
Georgia, Indiana, Texas, Kentucky, and Maryland.
What Do Land Banks Do?
Land banks acquire properties through tax foreclosure,
intergovernmental transfers, nonprofit transfers, and open-
market purchases. Tax foreclosures are the most common
method of acquisition. They allow state or local taxing
authorities to recoup delinquent back taxes by imposing a
lien on a property without the owner’s consent. Pursuant
to state foreclosure laws, these properties are then sold at a
public auction; those properties remaining unsold are deeded
to land banks. While land banks have historically functioned
to acquire tax foreclosures, the passage of the Housing and
Economic Recovery Act (HERA) in 2008 allocates funds to
provide communities with the means to acquire mortgage-
foreclosures.
11
In comparison to tax foreclosures, a bank or
mortgage foreclosure is pursued when a homeowner does
not fulfill mortgage payment requirements to the lender. The
lender is then entitled to foreclose and, subsequently, assume
ownership of the property.
After the acquisition process, land banks promote the
redevelopment of blighted properties by exercising powers
authorized in state and local statutes, such as the ability to
waive taxes and clear titles. The Fulton County/Atlanta Land
Bank in Georgia (further discussed in Appendix C) has the
power to abate delinquent taxes and can serve as a conduit for
conveying property to community development corporations
(CDCs) and other nonprofit developers. The Genesee
“A home is abandoned when
mortgage or tax foreclosure
proceedings have been initiated for
that property, no mortgage
or tax payments have been made
by the property owner for at least
90 days, AND the property has
been vacant for at least 90 days.”
9

— The Neighborhood Stabilization
Program definition of an
abandoned home.
An abandoned home in Baltimore, Maryland.

3
County Land Bank Authority (GCLBA) in Michigan cannot extinguish delinquent
taxes, but it has complete discretion in setting prices, terms, and conditions (to any
third party) when disposing of a property. In addition, with its sale, rental, and
development programs, the GCLBA functions as a developer and property manager
by renovating foreclosed homes and making them available to low-income families
at affordable prices.
Land banks also provide maintenance services for vacant lots and
abandoned properties. Land banks often acquire a large number of
properties that are not disposed of immediately, thus creating a need for
upkeep. Maintenance activities can include the demolition of dilapidated
structures that pose safety hazards and routine maintenance of vacant
lots, such as landscaping. The GCLBA demolishes between 100 and 200
blighted structures per year and performs maintenance-related activities
for properties in its inventory.
12
Benefits of Land Banks
Land banks are an effective tool for stabilizing communities burdened
by a large number of vacant, abandoned, or foreclosed properties. They
allow local governments to overcome barriers that inhibit the
redevelopment of these properties. For example, the disposition of
tax-delinquent properties can be challenging when delinquent taxes
exceed the property’s market value, or when there is no clear title to
the property. A land bank, such as the Fulton County/Atlanta Land
Bank — having the power to waive back taxes and clear titles —
can facilitate transfer of ownership in a tax-delinquent property for
redevelopment purposes.
Some land banks, such as the GCLBA, operate “side-lot” programs
wherein ownership of vacant lots is transferred to adjacent property
owners for a nominal fee. Programs like these ensure that abandoned
properties are back on the tax rolls, resulting in increased revenue and
reduced maintenance cost burdens for local governments. The GCLBA
also allows neighborhood residents to use vacant lots in its inventory to
create community gardens. Such projects beautify neighborhoods and
help stabilize property values in declining areas.
The affordable housing stock also benefits from land banks. In the event
that vacant lots cannot be developed due to a lot’s irregular shape or small
A home rehabbed by the GCLBA in Flint, Michigan.
Before and after renovation pictures of a property in Flint, Michigan.
Before
After

4
size, land banks can assemble adjoining parcels to create a larger, more marketable
property. In so doing, these larger parcels can be sold to CDCs and other nonprofit
developers, at below market rates, to support the creation of affordable housing.
In addition, land banks can hold property for future affordable housing development,
thus enabling local governments to curb the negative effects of gentrification.
Additionally, developers are able to save on holding costs by acquiring property
directly from a land bank. Local governments can further expand affordable housing
opportunities by using land banks to purchase mortgage-foreclosed homes and make
them available to low-income households at affordable rates.
Emerging Trends
Within the next two years, at least 47 states will be facing significant budget
shortfalls.
13
Public resources are stretched thin and the gloomy economic forecast
is compounding government challenges to recover from the mortgage foreclosure
State legislation
enabling creation of
land bank authorities
Local government adopts ordinance
creating a land bank authority
Acquisition of property occurs through nonprofit/
intergovernmental transfers, market transfers,
and tax foreclosures
A land bank may clear titles, waive
back taxes, and/or make improvements
on acquired properties
Development of
new units
Rehabilitation of
existing development
Disposition of Property
Maintenance
for future use
Figure 1: Land Bank Functions

5
crisis. To provide financial relief during these unsettled times, Congress enacted
the Neighborhood Stabilization Program (NSP).
14
The program — authorized
under HERA — provides emergency assistance to state and local governments
hardest hit by the foreclosure crisis. NSP funds are distributed to states
and communities presenting the greatest need based on the number and percentage
of foreclosures, subprime mortgages, delinquencies, and defaults. Its purpose
is to stabilize neighborhoods and encourage the reuse or redevelopment of
residential property.
The U.S. Department of Housing and Urban Development (HUD) allocated
$3.92 billion of grant funds to all 50 states, 5 territories, and 254 local
jurisdictions. Grantees are required to use at least 25 percent of the funds to provide
housing for individuals or families earning less than 50 percent of the area median
income. In addition, all activities funded by NSP must benefit low- and moderate-
income households earning less than 120 percent of the area median income.
Under the NSP, grantees may establish a land bank to purchase foreclosed or
abandoned properties. The land bank cannot hold property for more than 10 years,
but may maintain property that it does not own, provided that it charges the property
owner the full cost of maintenance, or places a lien on the property. In order to
receive NSP funds, grantees must first establish an area that would be serviced by
the land bank, and while a number of land bank activities may be pursued, HERA
only allows NSP funds to be used for acquisition.
In 2009, the American Recovery and Reinvestment Act (the Recovery Act) was
passed into law, in part to further assist state and local governments and nonprofit
organizations in pursuing NSP activities. The Recovery Act allocates $1.93 billion in
grants to be distributed on a competitive basis. The objective of the program remains
unchanged, but some regulations have been modified. For example, NSP2 — a term
used to reference funds authorized under the Recovery Act — allows land banks to
receive funds for operational costs and expands the land bank target from strictly
foreclosed homes to residential property in general. A number of communities have
included land banks as part of their NSP plans. According to HUD’s analysis, 4.2
percent of NSP funds are being proposed for land banking activities.
15
Columbus, Ohio
The city of Columbus, Ohio plans to utilize approximately $22.8 million in NSP
funds that it received to acquire, demolish, rehabilitate, and redevelop foreclosed
and abandoned properties.
16
The city will carry out these activities through its land
redevelopment office, which functions as the city’s land bank. The city’s NSP plan
proposes to acquire 150 units — 130 of these will be demolished — and develop
111 new units that will be made available to low- and moderate-income households.
The city’s land redevelopment office will coordinate the acquisition of these properties
using NSP funds.
Chattanooga, Tennessee
The city of Chattanooga, Tennessee has set aside $250,000 in NSP funds to establish
a land bank that will help convert abandoned properties into productive use.
17

The land bank will acquire foreclosed properties and assemble city-owned parcels
scattered throughout the city for future development. Properties will be sold to
households earning no more than 120 percent of the area median income. The city
will place lien restrictions on such properties to ensure long-term affordability.
Genesee County, Michigan
Foreclosed homes purchased with NSP funds in Genesee County, Michigan will
be held by the Genesee County Land Bank Authority (GCLBA) until they are
Neighborhood Stabilization
Program
The Housing and Economic
Recovery Act of 2008 (HERA)
allocates $3.92 billion for the
Neighborhood Stabilization Program
(NSP) to provide assistance
to state and local governments
for community redevelopment.
The purpose of the NSP is to
stabilize communities through the
progressive reuse of abandoned and
foreclosed properties. According to
HERA, funds may be used to:
A. Establish financing mechanisms
for purchase and redevelopment
of foreclosed upon homes and
residential properties, including
such mechanisms as soft-
seconds, loan loss reserves, and
shared-equity loans for low- and
moderate-income homebuyers;
B. Purchase and rehabilitate homes
and residential properties that have
been abandoned or foreclosed upon,
in order to sell, rent, or redevelop
such homes and properties;
C. Establish land banks for homes
that have been foreclosed upon;
D. Demolish blighted structures; and
E. Redevelop demolished or
vacant properties.
Under the NSP, land banks are
funded for activities related to
the acquisition and disposition of
foreclosed properties. However,
land banks may pursue other
activities (i.e., financing mechanisms,
rehabilitation, demolishing
blighted structures, or redeveloping
demolished or vacant properties)
provided they serve rehabilitative
uses and are pertinent to achieving
the goals set forth by the NSP.
19

6
disposed. The GCLBA will help clear titles and assist in the demolition of blighted
properties.
18
In addition, the land bank is seeking to partner with a real estate
development firm in anticipation of being awarded NSP2 funds to financially assist
prospective homebuyers and to continue rehabilitation projects.
Land Bank Challenges
Communities can face a number of obstacles when executing land bank policies.
First, the process of acquiring foreclosures can be lengthy and cumbersome. Tax
foreclosure proceedings vary from state to state and often require involvement on the
part of several jurisdictions to obtain clear title. A clear title is necessary to effectively
redevelop foreclosures — it guarantees that a property is clear of all liens and certifies
that a previous title holder cannot claim the property at a later date.
Depending on the state, there are two common types of foreclosure proceedings: the
judicial foreclosure and power of sale. In a judicial foreclosure, a delinquent property
is sold at auction to the highest bidder. The auction is carried out by a local court
or sheriff ’s office. A property foreclosed by a power of sale is auctioned off by the
mortgage company and may be subject to a judicial review.
20
The advantage of a
judicial foreclosure is that it includes obtaining a clear title prior to auction, thereby
shortening the foreclosure process in the long run. Reforming state legislation may
assist in expediting the foreclosure process, while introducing enough flexibility to
help homeowners save their homes.
21
Second, municipalities often lack experience in coordinating key stakeholders
to achieve successful outcomes. In many cases, municipalities have the capacity
to administer a land bank, but intergovernmental dichotomies inhibit regional
goals.
22
To ensure that foreclosed, vacant, and abandoned properties are acquired
and disposed of efficiently, “state legislation should provide clear parameters and
statutory authority for interlocal agreements.”
23

Another critical challenge is financing. Acquiring, renovating, and disposing of these
properties can be costly. Diligent planning and proper funding mechanisms are
needed to ensure that foreclosures are not acquired by speculators, but are instead
put to productive use. Subsequently, operational land banks require a means of
generating revenue. Adopting state legislation to grant municipalities the authority
to develop funding mechanisms that suit their individual needs can assist in
successfully implementing and executing a land bank.
24
Getting Started
Communities looking to create a land bank authority will find a guidebook by
Emory University professor Frank Alexander, Land Bank Authorities: A Guide for
the Creation and Operation of Local Land Banks, helpful in identifying key factors
and outlining action steps for the implementation of a land bank.
25
Alexander’s work
details important aspects of getting started, such as:
Laying the groundwork. To clearly identify and prioritize community goals, one must
first understand the problem. Gathering an inventory of existing abandoned, vacant,
and foreclosed properties that identifies their location, condition, and ownership
information will help determine the factual basis for establishing a land bank, and
lay the groundwork for more supportive state and local policy-making.
Land bank-enabling legislation. In order for municipalities to take advantage of
this tool, states must first adopt land bank enabling legislation. State statutes play
a significant role in the creation of land bank authorities. They authorize local
governments to establish land banks with powers designed to accomplish regional
Figure 2: Timeline for
Mortgage Foreclosures
*
Source: U.S. Department of
Housing and Urban
Development
*
Timelines vary by state.
Delinquent homeowner
receives a letter from the
lender documenting the
first missed payment.
MONTH 1
Delinquent homeowner
receives phone calls from
the lender documenting the
second missed payment.
MONTH 2
Delinquent homeowner has
exceeded the 30 days allowed
under the previous notice
to pay outstanding balance.
MONTH 4
This is the actual date
of foreclosure (when the
home is sold at auction).
The sale occurs approximately
2-3 months after the date
of notice.
SALE
Following the sale,
the homeowner is granted
a redemption period where
a home can be reclaimed
if all outstanding payments
are made.
Redemption
Delinquent homeowner
receives a “Demand Letter”
or “Notice to Accelerate.”
Foreclosure proceedings begin.
MONTH 3

7
and local community goals, such as blight removal, neighborhood redevelopment, and
the creation of affordable housing. Along with defining acquisition and disposition
policies, identifying revenue sources, and outlining the governing structure of a
land bank, state enabling legislation can also facilitate the sale or redevelopment of
abandoned properties by authorizing land banks to eliminate back taxes, clear titles,
and set below-market sale prices. Ensuring that land banks have the authority to
streamline the acquisition and disposition of foreclosed and abandoned properties
allows local governments to further the cause of affordable reuse.
In addition to laying the groundwork and establishing enabling legislation, a
municipality must understand how to organize and implement a land bank. The
following section contains case studies from three public land bank authorities in
Genesee County, Fulton County, and Baltimore City. Each land bank is unique,
with diverse policies and programs that vary depending on the long-term goals of
the community they serve. Using these case studies as a template, communities can
tailor land bank policies to address their individual needs.
A vacant and abandoned home in Baltimore, Maryland.
The Regulatory Barriers
Clearinghouse
To find more information about
Land Banks and other strategies
that help support affordable
housing, please visit HUD’s
Regulatory Barriers Clearinghouse
at www.regbarriers.org.

9
For over four decades, the city of Flint, Michigan and other communities located in
Genesee County have struggled with high population loss and increasing property
abandonment (see Figure A1). At its peak in the 1960s, Flint — birthplace of
General Motors — had a population of almost 200,000.
26
With the auto industry’s
declining fortunes and concomitant loss of manufacturing jobs, the city’s population
began steadily decreasing as people left in search of jobs and better prospects, leaving
behind vacant and abandoned houses. This abandonment has led to mounting
tax-delinquencies, and in tandem with a weak real estate market, contributed to
widespread neighborhood decline in Flint and the surrounding areas.
Michigan’s former tax foreclosure laws compounded the problem of neighborhood
decline. There was no mechanism in place to allow local governments to take control
of tax-delinquent properties. Instead, the state allowed private speculators to purchase
tax liens on these properties. The properties that remained unsold became state-owned
through a lengthy foreclosure process, lasting anywhere from four to seven years.
27
State Tax-Foreclosure Reform
To mitigate this problem, Michigan adopted legislation reforming the tax-foreclosure
process and enabling the creation of local land bank authorities. The state passed
the Delinquent Property Tax Foreclosure Act of 1999 (Public Act 123), which
authorized counties to foreclose on tax-delinquent properties.
28
Counties were given
the choice of functioning as local governmental foreclosing units or letting the state
handle foreclosures.
29
Counties that chose to participate could use revenue generated
from the sale of foreclosed properties to create a “land reutilization fund” with
which to manage their inventory. The legislation also streamlined the foreclosure
process, reducing the time property owners had to pay back taxes and allowing local
authorities to reclaim declining tax-delinquent properties in less than three years.
Appendix A
Genesee County Land Bank Authority
Percentage of Vacant Housing Units
25
20
15
10
5
0
1980 1990 2000 2007*
Figure A1: Percentage of Total Vacant Housing Units in the city
of Flint and Genesee County, Michigan
Source: U.S. Census
* Census estimate based on data collected between January 2005 and December 2007
City of Flint
Genesee County

10
In 2003, Michigan adopted another key piece of legislation known as the Land Bank
Fast Track Act (Public Act 258). Considered the most progressive land banking
legislation in the nation, Public Act 258 allows county governments that opted in
under Public Act 123 to create city and county land bank authorities with powers to
assemble, sell, or redevelop a large number of tax-foreclosed properties in an expedited
manner. The law also allows counties to adopt a brownfield redevelopment plan for
tax-foreclosed properties, thereby facilitating the use of tax-increment financing for
redevelopment.
Establishing the Land Bank
Genesee County chose to act as the local governmental foreclosing unit under
Public Act 123 and created the Genesee County Land Reutilization Council
(GCLRC) in 2002. Two years later, enabled by the Land Bank Fast Track Act and
an intergovernmental agreement between the state’s land bank authority and the
Treasurer of Genesee County,
GCLRC evolved as the Genesee
County Land Bank Authority
(GCLBA). That present-day public
entity is independently governed
by a board of directors consisting of
the County Treasurer and residents
of Flint and Genesee County.
30
With
its own set of by-laws and a full-
time staff, the land bank acquires
tax foreclosures and determines the
best use for these properties, in
keeping with the long-term vision for
the community. Over the past five
years, the land bank has returned
1,500 properties to some form of
productive reuse.
Property Acquisition
The GCLBA acquires property primarily through tax foreclosure. When properties
enter foreclosure after two years of unpaid property taxes, they are deeded to the
County Treasurer. Each year, foreclosed properties are offered for sale by public
auction to recoup back taxes. Working in conjunction with the Treasurer’s office,
land bank staff identifies foreclosed properties on which to bid at these auctions.
At the end of the year, foreclosed properties that remain unsold by public auction
are automatically deeded to the land bank. Other land acquisition methods used
by the land bank include property transfers from private, nonprofit, or governmental
entities, and purchase on the open market.
Land Bank Programs
The GCLBA operates 10 different programs designed to ensure productive reuse of
tax-foreclosed properties through foreclosure prevention, housing renovation, side
lot transfer, clean and green (vacant lots are converted into gardens and green space),
planning and outreach, demolition, property maintenance, sales, development, and
brownfield redevelopment. Since most of the properties acquired by the land bank
are either vacant lots or homes in severe disrepair, the GCLBA categorizes them for
demolition, rehabilitation, or for rent or sale to interested parties.
31
Neighborhood
revitalization, homeownership, and increasing housing opportunities for low-
income families are top priorities at the GCLBA. As of February 2009, the land
Vacant lot acquired by adjacent homeowner as part of the GCLBA’s side lot transfer program.
Photo Credit: GCLBA

11
bank held 4,200 properties in its inventory, of which close to 3,400 are vacant lots;
nearly 88 percent are located within the Flint city limits.
The land bank renovates 25 to 50 abandoned and dilapidated houses annually, and
then sells or rents them at affordable rates to qualified tenants with an option to
own. Monthly rent for many of these homes is kept under $400. The side-lot and
adopt-a-lot programs give homeowners the option to lease/purchase adjacent vacant
lots from the land bank. Other vacant lots are transferred to nonprofit entities for
development, operation, or maintenance of affordable housing.
Back taxes, taxes generated from redevelopment, and revenue from its sales and rental
programs finance GCLBA operations. It also receives 50 percent of property taxes
collected on transferred properties for the first 5 years, while tax-increment financing
pays for clean-up and demolition of properties.
The GCLBA has succeeded in transforming neglected tax-delinquent properties
into productive, tax revenue-generating properties, while achieving the long-term
community goals of affordable housing and neighborhood stabilization. A recipient
of the 2007 Innovations in American Government Award, the GCLBA is now
a model for public land banks across the nation. Dan Kildee, County Treasurer
and board member of GCLBA, emphasizes that flexibility is the key for successful
implementation of a land bank. Kildee advises communities to create realistic
expectations and to adopt a flexible working plan for land banks.
32
“The land bank has made
it possible for me to be
independent. I always refer
my friends to the land bank.”
— Tynisha Howell, a Flint resident
who is renting a GCLBA-rehabbed
home with an option to buy.
A view of a residential property in Flint, Michigan, before and after renovation.
Before
After

12
Baltimore is the largest city in the state of Maryland. Dubbed “Charm City,” it was
established in 1729 and thrived as a seaport community until the latter half of the
20th century, when factories closed and manufacturing jobs were lost. Today, the
city’s Inner Harbor is a popular tourist destination with ample entertainment and
retail venues, but bustling tourism alone cannot bolster the
city’s significant economic decline and resulting housing
crisis. According to the U.S. Census Bureau, Baltimore
City has undergone significant population changes since
the 1950s. Having lost nearly 33 percent of its residents,
the city struggles to address the growing blight and crime
occasioned in part by over 37,000 vacant and abandoned
housing units.
33
Project 5000
In 2002, then Baltimore City Mayor Martin O’Malley
set out on an ambitious two-year plan to acquire 5,000
vacant and abandoned properties and put them back into
productive use. “Instead of using our resources and powers
to put properties back on the market, we’ve been spending
it on the maintenance of divestment. It’s time to wake
the dead potential of these lots and buildings. It’s time to
return value to our city’s land and make that value work for us,” O’Malley observed.
34

Baltimore’s aggressive approach to take ownership of blighted properties was intended
to rally public support for Project 5000 — an initiative managed by the city’s Land
Resources Division — and its objective to mitigate the growing vacancy problem
that has plagued Baltimore City for decades.
When O’Malley first sought to implement the program, the city had a vacancy
rate of 14.1 percent — the fourth highest in the nation. “Vacant houses breed
crime, they breed trash, and they diminish the value of homes that represent the
lifesavings of hardworking citizens,” said O’Malley. The plan was to acquire vacant
and abandoned properties through tax foreclosures, quick-sales, eminent domain, and
Appendix B
Baltimore City, Maryland
A blighted residential structure in Baltimore, Maryland.
Blighted row houses in Baltimore, Maryland.

13
traditional acquisitions (and to transfer surplus city-owned property previously held
by the Housing Authority of Baltimore City). The strategy was implemented incre-
mentally; the first step was to identify properties for acquisition.
Through a collaborative effort between city agencies and community partners, a
property selection process was developed, with a housing database established to
help staff determine which properties to choose for acquisition. The result is a web-
based tool, HousingView, featuring geographic information and property data where
decisionmakers review aerial photographs in search of vacant buildings and lots.
The majority of properties targeted for acquisition were located in the Sandtown-
Winchester, Middle East, and Central Park Heights neighborhoods of Baltimore
City. The city targeted properties for acquisition when favorable development
opportunities existed.
The second stage of the initiative established partnerships to minimize operating
costs. Project 5000 received free and discounted services valued at upwards of
$5 million from attorneys, newspapers, and other legal entities. During the third
stage, the city streamlined and improved the acquisition and legal processes to grapple
with large-scale foreclosure proceedings, and a web-based tracking tool — the City
of Baltimore Land Asset Manager (CoBLAM) — was developed to track the flow
of legal work. The last stage dealt with the disposition of all acquired properties
by various methods: Selling City-Owned Property Efficiently (SCOPE) partnered
with local realtors to sell higher-priced homes on the open market; rolling bids
were administered for properties of lesser value; and Request for Proposals (RFPs)
were used for multiple properties with specific development goals.
Prior to the launch of Project 5000, the Land Resources Division acquired only 200
properties annually. The project not only met, but substantially exceeded its goals.
Over 6,000 properties were acquired during its 3-year run, and a number of city
innovations were developed as a result of the program. Although successful on many
counts, the project was not without its challenges. Baltimore City currently owns
over 10,000 vacant and abandoned properties, making it one of the largest holders
of blighted city-owned parcels in the nation.
35
Managing a large inventory of real
estate has resulted in several challenges for the city. Seeking reform, Mayor Sheila
Dixon requested that the Department of Housing and Community Development
(HCD) generate a plan to implement a land bank.
Project 5000 Results
Operating Costs $7,418,238
Capital Costs $14,626,248
Average Expenditure per Acquisition $12,606 (eminent domain)
Average Expenditure per Acquisition $1,600 (tax foreclosures)
Total Properties Acquired 6,000 (approximate)
Properties Returned to Private Ownership 1,000 (approximate)
Sales Revenue $4,500,000
Taxes and Fees Collected $1,800,000
Figure B1: Baltimore City, Maryland’s Project 5000 Results
Source: U.S. Conference of Mayors
A vacant home in Baltimore.

14
Baltimore City Land Bank Authority Proposal
Public officials have frequently discussed the creation of a land bank to reduce the
high number of vacant and abandoned homes throughout Baltimore City. Although
there has been much interest in the issue, the sizable scope of the project has
deterred any action — until now. At the request of Mayor Sheila Dixon, the HCD
generated the report A Plan to Create the Baltimore City Land Bank. “Too many
Baltimore neighborhoods are plagued by problems associated with vacant, boarded-
up properties. Abandoned properties drain value from the homes of innocent
neighbors. They undermine the quality of life in our neighborhoods. And they
cost the city money,” said Mayor Dixon. Released in 2007, the report identifies
problems with the existing property acquisition
and disposition processes and lays out an
implementation plan for the creation of the
Baltimore City Land Bank.
The existing process to sell city-owned property
is complex and requires duplicative efforts by
a number of city agencies, including the HCD,
the Comptroller’s Real Estate Office, the Space
Utilization Committee, the Department of
Finance, the Law Department, the City Council,
and the Board of Estimates. Given these and
other significant barriers, the acquisition and
disposition of a single property can take up to three
years to complete, only adding to the city’s
struggle to efficiently dispose of units in a way
that ensures rehabilitation, and ultimately, an
improved quality of life. Moreover, the sales
process targets buyers that are familiar with the
system and seeks maximum profits over development outcomes — placing
community development corporations, neighborhood groups, and local affordable
housing developers at a competitive disadvantage. To resolve these problems, the
report recommends a three-step implementation strategy to:
1. Amend the city code to grant HCD the authority to sell abandoned property;
2. Place property suitable for redevelopment under the management of a central
agency; and
3. Create a nonprofit entity to acquire, maintain, and sell abandoned property on
the city’s behalf.
The Baltimore City Code requires that the Board of Estimates certify the legal
and financial capacity of contracting parties prior to the sale of a property. This
process stipulates that the sale price must meet or exceed the appraised value —
focusing on profit, not development outcome. The approval process can add several
months to disposition proceedings. Amending the city code to grant HCD
authority to sell abandoned property can streamline the process, while still being
subject to accountability.
City-owned property is divided between HCD, Recreation and Parks, and the
Real Estate Office of the Comptroller. In some cases, HCD and the Comptroller
hold property within the same city block. Both departments have failed to agree on
a marketing strategy to dispose of these units. As a result, when developers attempt
to acquire multiple listings within a city block, they must conduct separate
negotiations with each city office. In adopting new guidelines designating HCD
A renovated home in Baltimore, Maryland.

15
the central agency, the city could eliminate duplicative negotiations and reviews that
add expense and occasion delay for developers.
Another policy that prolongs disposition is the method by which services are
procured. The management of city-owned property is fragmented; each stage of
a real estate transaction from acquisition to disposition requires a variety of services,
ranging from maintenance and repair to obtaining appraisals. The city’s rules
regarding the hiring and retention of staff to provide these services have hindered
progress on all fronts. Creating a nonprofit entity to acquire, maintain, and sell
abandoned property on the city’s behalf will streamline the process for selling
properties, allow greater flexibility in recruiting necessary services, and establish
clearly defined policies for property disposition.
Maryland’s Enabling Legislation
During the 2008 Legislative Session, the Maryland General Assembly passed
Senate Bill 911, which empowers Baltimore City to create a Land Bank Authority
(LBA). The enabling legislation creates an 11-member board of directors consisting
of six city officials and five city council appointees to govern the nonprofit agency.
The LBA is charged with adopting bylaws, rules, and regulations to return vacant
properties to productive use. This quasi-governmental organization can acquire,
manage, and sell city-owned property and procure services from other public or
private entities in order to effectively manage operations. Additionally, the LBA may
lease, transfer, demolish, repair, and dispose of property it holds or owns and take all
other actions necessary to preserve its value.
The authority is exempt from paying state or local taxes, but the property that
the authority sells or leases to a private party is subject to state and local property
taxes from the time of sale or lease. Unlike Project 5000, the LBA does not have
the power of eminent domain and cannot levy any tax or special assessment.
Throughout the summer of 2008, a task force created by Mayor Dixon met with
government officials to draft city legislation that will allow the implementation of
the Land Bank Authority. According to the Mayor, even in a down economy,
developers continue to express interest in the vacant and abandoned properties. “By
streamlining the process for selling city property, adopting policies from various
stakeholders, and consolidating development parcels, our neighborhoods will attract
new investment,” said Dixon. The proposed legislation was presented to the city
council in January 2009 and is currently awaiting approval.

16
The Atlanta, Georgia metropolitan area is one of the fastest growing regions
in the United States. However, the city of Atlanta’s population growth has been
disproportionate compared to the growth of surrounding suburban areas. In the
1970s, Atlanta — the state capital and Fulton County seat — experienced a significant
population decline. During this time, housing vacancy rates increased from 5 to
almost 15 percent.
36
The population loss did not subside until
after 1990, when expanding employment opportunities in
parts of the city attracted new residents. From 1990 to 2007,
Atlanta’s population grew by over 30 percent.
37
Demographic
projections indicate that the city’s population will continue
to increase, but a large number of workers will live outside
of the job-rich region, due to a lack of affordable housing.
38

Meanwhile, gentrification of the city’s older and more
affordable neighborhoods is resulting in the displacement
of existing low-income households, exacerbating the need
for affordable housing.
39
For the past 18 years, the Fulton County/City of Atlanta
Land Bank Authority (LBA) has been instrumental in
redeveloping declining neighborhoods and increasing
the city’s affordable housing supply. The LBA enables
community development corporations (CDCs) to acquire
tax-delinquent properties with insurable titles at below market prices for affordable
development. Since its inception, the LBA has facilitated the transfer of 50–100
properties per year. As a result of the current mortgage foreclosure crisis, there are
a vast number of homes in the city that are standing vacant and abandoned. With
powers granted by state legislation, the LBA is in a unique position to stabilize
declining neighborhoods with high foreclosure rates.
State Enabling Legislation
Georgia is one of the few states in the nation to have adopted legislation expediting
the tax foreclosure process and enabling the creation of public land bank authorities.
In 1990, the state adopted legislation allowing one or more cities and counties
to enter into an interlocal cooperation agreement to create a land bank authority with
the power to acquire, clear title, and dispose of tax delinquent properties.
40

The legislation also granted land bank authorities the power to forgive delinquent
county and city taxes, including school district taxes (with the consent of the
school board) on acquired properties. In addition, Georgia enacted the judicial tax
foreclosure system in 1995, making it easier to obtain clear and insurable titles to
tax-foreclosed properties. The law expedited the tax-foreclosure process by reducing
the redemption period from 12 to 2 months.
The Land Bank Authority
Following the adoption of state-enabling legislation, the Fulton County/
City of Atlanta Land Bank Authority (LBA) was created in 1991 as a joint quasi-
governmental authority with an independent board of directors consisting of city
and county officials. The LBA is aided by four taxing jurisdictions — Fulton County,
the city of Atlanta, the Atlanta Public School System, and the Fulton County Board of
Appendix C
The Fulton County/City of Atlanta
Land Bank Authority
A view of downtown Atlanta, Georgia.

17
Education — in its mission to revert nontax-generating properties to productive use,
primarily for affordable housing purposes.
41
With day-to-day operations overseen by
full-time staff members, various other city and county departments provide support
services to the LBA. For example, the Fulton County Department of Buildings &
Grounds and city of Atlanta’s Department of Public Works provide maintenance
services for land banked properties. The LBA is also authorized to retain outside
consultants to carry out its duties.
40
Encouraging Affordable Development
The LBA can bid for tax-foreclosed properties or notify the county Tax
Commissioner of its intent to acquire tax-delinquent properties scheduled for
foreclosure. However, the main mechanism by which the LBA acquires properties
is through governmental and nonprofit/developer transfers. The land bank
encourages CDCs and other affordable housing developers to acquire tax-
delinquent properties from current owners prior to the start of foreclosure
proceedings (Fulton County maintains a searchable
database that housing developers can use to locate
tax-delinquent properties for acquisition). Developers pur-
chase or negotiate an option to purchase tax-delinquent
property from the owner and transfer the acquired property
title to the LBA. The LBA then clears the title and waives all
back taxes on the property before conveying the title back to
the developer (see Figure C1).
LBA prioritizes conveyance of property to local nonprofit
agencies that will utilize the property for affordable
housing purposes. Conditions imposed by the LBA require
developers to create new affordable housing on transferred
property within three years, or title to the property reverts
back to the LBA and delinquent taxes are reinstated. A
new policy introduced in 2008 allows the LBA to hold
properties purchased by CDCs for three years and city-
or county-owned properties for up to five years. The
properties are not taxed during the period in which they
are held by the land bank, thereby reducing holding costs, which in turn translate
to lower development costs for the CDCs and other non-profit developers.
43
The LBA has full discretion in setting sale prices for acquired properties, but
any proceeds resulting from property sales are transferred to participating taxing
jurisdictions before being distributed to the LBA. Without significant revenue
from its operations, the LBA utilizes annual appropriations from participating local
governments to fund its activities.
Accomplishments
A recipient of the U.S. Department of Housing and Urban Development’s
Best Practices Award, the LBA has been instrumental in revitalizing blighted
neighborhoods in the city of Atlanta. The LBA has facilitated redevelopment of
mixed-income subdivisions, such as The Orchard, Ware Estates, and Adamsville
Place.
44
With the adoption of the new land bank holding policy, affordable housing
groups have identified more than 140 parcels to bank for future development.
Following the passage of the Housing and Economic Recovery Act, the city of Atlanta
and Fulton County are planning to partner with the LBA to acquire additional
properties with funds from the Neighborhood Stabilization Program.
Renovated single-family home in Atlanta, Georgia.
Photo Credit: Fulton County/Atlanta Land Bank Authority

18
Figure C1: Fulton County/City of Atlanta Land Bank Authority Transfer of Property Process
Source: Fulton County/City of Atlanta Land Bank Authority
Developer Identifies Tax Delinquent Property
Developer Purchases or Negotiates Option
to Purchase Property
Staff Reviews Board Request Packet
Staff Recommendations are Presented to the
LBA Board of Directors
Developer Conveys Property to the LBA
and Signs a Contract
LBA Immediately Conveys Property Back
to Developer and Taxes are Forgiven
LBA Certificate of Completion is Issued
Ownership of Property may be Returned
to the LBA and Taxes are Reinstated
Developer Satisfactorily Completes Construction
Developer Does Not Satisfactorily
Complete Construction
Board Approves Developer’s Request Board Rejects Developer’s Request
Developer Submits Board Request Packet
• A Completed LBA Application Form
• A Letter from the Neighborhood
Planning Unit
• 15 Photographs of the Property
• A Title Report and Purchase Contract
• Verification of Project Funding

19
ENDNOTES
1
Alan Mallach, “Foreclosures and Stimulus: What’s At Stake for America’s Neighborhoods,” Brookings Institution,
http://www.brookings.edu/opinions/2009/0209_stimulus_berube.aspx (accessed March 2, 2009).
2
United States Census Bureau, “U.S. Census Bureau News,” 27 April 2009, http://www.census.gov/hhes/www/
housing/hvs/qtr109/files/q109press.pdf (accessed March 2, 2009).
3
National Vacant Properties Campaign, “Vacant Properties: The True Cost to Communities,” August 2005,
http://www.vacantproperties.org/latestreports/True%20Costs_Aug05.pdf (accessed March 3, 2009).
4
William C. Apgar and Mark Duda, “Collateral Damage: The Municipal Impact of Today’s Mortgage Foreclosure
Boom,” Homeownership Preservation Foundation, 11 May 2005, http://www.995hope.org/content/pdf/Apgar_
Duda_Study_Short_Version.pdf (accessed March 3, 2009).
5
National Vacant Properties Campaign, “Vacant Properties: The True Cost to Communities.”
6
Frank S. Alexander, Land Bank Authorities: A Guide for the Creation and Operation of Local Land Banks (New York:
Local Initiatives Support Corporation, 2005), p. 7, http://www.lisc.org/content/publications/detail/793/ (accessed
November 3, 2008).
7
Missouri General Assembly, “Missouri Revised Statutes: Chapter 92,” 28 August 2008,
http://www.moga.mo.gov/statutes/C000-099/0920000875.HTM (accessed November 3, 2008).
8
Thomas J. Fitzpatrick IV, “Understanding Ohio’s Land Bank Legislation,” Federal Reserve Bank of Cleveland, 30
January 2009, http://www.clevelandfed.org/Research/PolicyDis/pdp25.pdf (accessed March 3, 2009).
9
United States Department of Housing and Urban Development, “Neighborhood Stabilization Program,”
http://www.hud.gov/offices/cpd/communitydevelopment/programs/neighborhoodspg/pdf/nsp_terminology.pdf
(accessed March 16, 2009).
10
Teresa Gillotti and Daniel Kildee, “Land Banks as Revitalization Tools: The Example of Genesee County and the City
of Flint, Michigan,” Genesee Institute, http://www.geneseeinstitute.org/downloads/Revitalization_Tools.pdf (accessed
November 20, 2008).
11
United States Department of Housing and Urban Development, “Neighborhood Stabilization Program,”
http://www.hud.gov/offices/cpd/communitydevelopment/programs/neighborhoodspg/ (accessed February 9, 2009).
12
Genesee County Land Bank Authority, “Genesee County Land Bank Programs,”
http://www.thelandbank.org/downloads/LB_Brochure.pdf (accessed January 12, 2009).
13
Iris J. Lav and Elizabeth McNichol, “State Budget Troubles Worsen,” Center on Budget and Policy Priorities, 18 May
2009, http://www.cbpp.org/cms/?fa=view&id=711 (accessed May 28, 2009).
14
United States Department of Housing and Urban Development, “Neighborhood Stabilization Program,”
http://www.hud.gov/offices/cpd/communitydevelopment/programs/neighborhoodspg/.
15
Amanda Sheldon, Phillip Bush, Aaron Kearsley, and Ann Gass, “The Challenge of Foreclosed Properties: An Analysis
of State and Local Plans to Use the Neighborhood Stabilization Program,” Enterprise Community Partners, 2009,
http://www.practitionerresources.org/cache/documents/672/67247.pdf (accessed April 14, 2009).
16
City of Columbus, Ohio, “Neighborhood Stabilization Program Application,” http://wbt1.finance.ci.columbus.oh.us/
uploadedFiles/Finance_and_Management/FinanFina_Management_Division/Grants_Management/City%20of%20
Columbus%20NSP%22Application.pdf (accessed April 14, 2009).
17
City of Chattanooga, Tennessee, “The NSP Substantial Amendment,” http://www.chattanooga.gov/NSP_Draft.pdf
(accessed April 14, 2009).
18
Genesee County, Michigan, “Genesee County Neighborhood Stabilization Program,”
http://www.co.genesee.mi.us/gcmpc-plan/Files/Docs/Neighborhood%20Stabilization/NSP%20Changes%20-%20
February%206.pdf (accessed April 14, 2009).
19
United States Department of Housing and Urban Development, “Housing and Economic Recovery Act of 2008,”
http://www.hud.gov/offices/cpd/communitydevelopment/programs/neighborhoodspg/hera2008.pdf
(accessed February 9, 2009).

20
20
United States Department of Housing and Urban Development, “Foreclosure Process,”
http://www.hud.gov/foreclosure/foreclosureprocess.cfm (accessed April 23, 2009).
21
Center for Housing Policy, “Reform the Tax Foreclosure Process,” http://www.housingpolicy.org/toolbox/strategy/
policies/abandoned_properties.html?tierit=150#tf (accessed April 23, 2009).
22
Center for Housing Policy, “Bring Foreclosed Properties Back Into Use,”
http://www.foreclosure-response.org/policy_guide/bring_back.html?tierid=251 (accessed April 15, 2009).
23
Jennifer S. Vey, “Restoring Prosperity: The State Role in Revitalizing America’s Older Industrial Cities,” The Brookings
Institution, May 2007, http://www.brookings.edu/reports/2007/05metropolitanpolicy_vey.aspx (accessed May 20,
2009).
24
Ibid.
25
Alexander, Land Bank Authorities, ch. 4.
26
Flint’s Future Now, “Flint’s Future: A Forgotten Success or a 21st Century Triumph?”
http://www.flintsfuturenow.org/docs/FFNBrief.pdf (accessed February 24, 2009).
27
Gillotti and Kildee, “Land Banks as Revitalization Tools: The Example of Genesee County and the City of Flint,
Michigan.”
28
Michigan Legislature, “Public Act No. 123,”
http://www.legislature.mi.gov/documents/1999-2000/publicact/pdf/1999-PA-0123.pdf (accessed February 4, 2009).
29
Ellen M. Bassett, John Schweitzer, and Sarah Panken, “Understanding Housing Abandonment and Owner Decision-
Making in Flint, Michigan: An Exploratory Analysis,” Genesee Institute, 2006, http://www.geneseeinstitute.org/
downloads/Bassett_Understanding_Owner_Decision.pdf (accessed February 2, 2009).
30
Alexander, Land Bank Authorities, appendix C-3.
31
Genesee County Land Bank Authority, “Genesee County Land Bank Programs.”
32
Daniel Kildee, interview by Kanthi Karipineni, 18 February 2009.
33
United States Census Bureau, “American FactFinder,” http://factfinder.census.gov/home/saff/main.html?_lang=en
(accessed March 2, 2009).
34
Martin O’Malley, “Baltimore: State of the City Address,” 28 January 2002,
http://www.dlc.org/ndol_ci.cfm?contentid=250208&kaid=104&subid=117 (accessed March 2, 2009).
35
John Fritze, “Land Bank Against Blight,” Baltimore Housing,
http://www.baltimorehousing.org/pressroom_detail.asp?id=117 (accessed May 2, 2009).
36
United States Census Bureau, “Housing Vacancies and Homeownership,”
http://www.census.gov/hhes/www/housing/hvs/hvs.html> (accessed February 25, 2009).
37
United States Census Bureau, “Population Finder,” http://factfinder.census.gov/servlet/SAFFPopulation?_
submenuId=population_0&_sse=on (accessed February 25, 2009).
38
City of Atlanta, Georgia, “Community Assessment,” http://www.atlantaga.gov/client_resources/government/planning/
asap/asap_096_171.ppp (accessed February 25, 2009).
39
Georgia Institute of Technology, “Current Gentrification in Atlanta Contrasts Sharply to Previous Waves of Urban
Restoration,” 5 September 2003, http://www.gatech.edu/newsroom/release.html?id=331 (accessed February 3, 2009).
40
Georgia General Assembly, “Georgia Code: Section 48-4-61,” LexisNexis,
http://www.lexis-nexis.com/hottopics/gacode/default.asp (accessed February 23, 2009).
41
Ibid.
42
Alexander, Land Bank Authorities, appendix C-1.
43
Kevin Duffy, “New Policy for Land Banks Will Benefit Nonprofits,” The Atlanta Journal Constitution, 21 August 2008,
http://www.ajc.com/metro/content/business/stories/2008/08/21/atlanta_land_bank.html (accessed on March 2,
2009).
44
Information provided by Fulton County/City of Atlanta Land Bank Authority, 8 January 2009.

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