Here’s a scenario that’s all too common in cities across Ohio: A structure, often a house in a struggling residential neighborhood, stands empty, abandoned by its titled owners and steadily deteriorating year by year. The lender could foreclose and take title to the property through a credit bid if there are no higher bidders at the sheriff’s sale. However, this often does not happen if the mortgaged property is in a blighted or other struggling neighborhood. The lender does not want to be stuck with the property.
A property can hang in this legal limbo indefinitely, dragging down a neighborhood by suppressing property values and attracting crime.
One option for combating this property is a land bank. A “land bank” is a nonprofit entity, often governmental, that is established primarily to take title or control of vacant or abandoned property, manage it and then dispose of the property. As stated by the Western Reserve Land Conservancy
, based in Cleveland, Ohio, “… land banks can safely hold a distressed property, clean its title
and prepare it for a better day.”
“When property owners neglect and abandon their properties, the local municipality must use its own resources to clean and maintain the properties as part of their nuisance abatement responsibilities to protect the public health, safety and welfare of its community. … Abandoned and vacant properties drive down the surrounding property values, which lowers the property taxes that most municipalities rely on as a primary source of revenue.
Property abandonment can destabilize a neighborhood by causing an out-migration of property owners, who are worried about losing value on their properties due to surrounding vacant and abandoned land. A Temple University study suggests that, all things being equal, the presence of an abandoned house on a block reduces the value of all the other property by an average of $6,720.”
There are quite a few land banks in the state of Ohio. The Western Reserve Land Conservancy lists 24 Ohio county land banks on its web site. The first county land bank in Ohio was created in 2008 when legislation was passed in the state to allow the creation of a land bank in Cuyahoga County. The formation of 23 additional county land banks in the past 7 years is testimony to the growing need to deal with vacant blighted properties in the state.
There are those who believe a strong, all powerful government is the solution for all that ails us. On the other end of the spectrum of those who what no government led or backed solution to anything. I tend to fall somewhere in the middle. While I don’t much care for a large, intrusive, over-regulating government at any level, there are some problems out there that cannot be solved without governmental, or quasi-governmental involvement. The problem of abandoned property in our urban areas is one of them. Land banks are one of the few options I’ve seen that can clear title so these properties can be put back into service and help our cities get back on their feet.