Land Banking is one of several important tools that are part of the short and medium term solution to the stabilization and revitalization of communities. Land banking provides some of the following benefits:
- Securing and managing properties that have a 6-36 month time horizon to redevelop and dispose. The current LBA policy restricts the land banking period to 3 years for non-profits and 5 years for governmental entities.
- Eliminates the tax burden for developers/owners while the property is being redeveloped or assembled for disposition.
- LBA has the ability to selectively extinguish existing delinquent taxes on properties purchased by stakeholders and banked with the LBA.
- Assists with assemblage of properties as part of a comprehensive neighborhood stabilization and redevelopment plan.
- Expands the ability of developers to attack a broader footprint within the community by phasing the development efforts over an extended period and relying on the ability the LBA to inventory property.
- Stakeholders can acquire and demolish blighted structures that are cost prohibitive to repair and bank and manage the resulting vacant property. This can assist with improving the visual presentation of the neighborhood to current and potential residents.
The LBA Board adopted policies and procedures for Land Banking in December 2007. The expressed goals of the new policy were to:
- a.Permit advance acquisition of potential development sites in anticipation of rapidly rising land prices;
- b.Facilitate pre-development planning, financing, and structuring;
- c.Minimize or eliminate violations of housing and building codes and public nuisances on properties to be developed for affordable housing; and
- d.Hold parcels of land for future strategic governmental purposes such as affordable housing and open spaces and greenways.
The LBA has recently taken steps to ensure that it has adequate internal capacity to assist with large scale land banking. The LBA completed the RFP process for identifying a third party property management company to assist with the active management of properties that will be banked with the LBA under the new Land Banking policy. The engaged entities are the Land Bank Authority Partnership (consisting of Smith Real Estate Services, ) and Fortis-Horizonz JV. These third party vendors enhance the ability of the LBA to provide comprehensive property management and maintenance services. This new capability is operational and the LBA is currently actively banking property for stakeholders.
Some of the potential costs associated with land banking include initial costs for securing and inspecting the property, monthly maintenance costs (including lawn maintenance, debris removal, monitoring and inspection, property insurance), closing and transaction fees for documenting and closing the initial land banking transaction, expanded property insurance and coverage of internal LBA operating costs. The final schedule of fees will be determined on a transaction specific basis. The LBA remains sensitive to the cost element of this service and will attempt to maintain all fees as low as possible.