Slowly but surely, Pa. land banks start to mobilize

Ronell Guy oscillated between admiration and admonishment as she drove around the California-Kirkbride neighborhood in Pittsburgh. She’s the Executive Director of the Northside Coalition for Fair Housing and an interim board member of the city’s land bank. She pointed at blighted houses and vacant lots and then cooed at the possibilities of the abandoned properties. The Coalition has taken it upon itself to maintain the empty lots, many of which are owned by the city, but they currently do so as trespassers, she said.  With Pittsburgh’s new land bank, established in April, Guy hopes to reduce her workload and tap the neighborhood’s potential more easily. 

Pennsylvania passed legislation in 2012 authorizing the formation of land banks throughout the Commonwealth. So far, just a handful of jurisdictions have drafted their own bills actually creating them, the latest in Pittsburgh.

Pittsburgh has nearly 20,000 tax delinquent properties, and Philadelphia double that. The Commonwealth has about 400,000 vacant parcels in total. Councilwoman Deb Gross introduced Pittsburgh’s land banking legislation. She readily admitted that right now, getting property out of the limbo of abandonment and into people’s hands is a years-long, complicated process. Gross said the only properties that make it to treasurer’s sales are those being requested through that long process. “So no one is just saying here, let’s just clear title to these parcels and just sell them,” she said. 

In a nutshell, changing that is the lofty goal of land banks. To get that done, the independent agencies have the power to acquire parcels, dissolve their back taxes, and return them with a clear title to new owners or developers who plan to return them to productive use. 

How land banks work

Land banks can grow their inventories through donation or purchase. Frank Alexander helped draft Pennsylvania’s authorizing legislation. He said it’s important to acquire properties that can actually be useful. “One of the worst problems is if the land bank simply becomes a public slumlord or a public owner of a lot of property that’s deteriorated and it doesn’t do anything about that property.”

Once property is in a land bank’s possessions, though, it’s supposed to move quickly to extinguish any back taxes and convey the property to a new owner for productive uses.

The ability to dissolve tax liens, and to do it in bulk, is the core power of the land bank. That way, people purchasing blighted property are actually getting a deal, rather than paying off substantial back taxes.

The land bank’s other big power, said Liz Hersh, Executive Director of the Housing Alliance of Pennsylvania, is to control somewhat for who exactly gets those deals.

California-Kirkbride is separated from more vibrant neighborhoods by railroad tracks. In 1983, a large postal service sorting facility opened up by the tracks, further isolating residents. Guy said when the facility was built, it wasn’t as part of any plan.  “They just decided these are poor people, they ain’t going to complain about this huge postal facility coming to our neighborhoo,”  she said.

The land bank aims to play a role in determining what kind of development goes through. “It mandates a disposition policy so that there’s a public process for saying we want community plans to be recognized, or we prioritize storm water runoff for gardens or farms, or affordable housing or market housing or whatever it is,” said Hersh.   

The idea is to control for speculators and avoid projects the community doesn’t want.

“There’s a process in place to honor the local plan and to set policies about how we use our land,” said Hersh.    

Startup costs a challenge

Pennsylvania’s land bank law is third generation, so it’s been able to learn from other states’ land banking laws and improve on them. As such, it has some additional provisions. One is its mechanism for regional collaboration. For example, the Westmoreland County Land Bank serves ten municipalities and could add more in the future. Another unique provision is a five-year period in which land banks can collect half of the taxes from properties they return to productive use, something intended to help with fiscal sustainability.

But as Pennsylvania’s first land banks slowly start to mobilize, there are challenges.

April Kopas, Executive Director of the Westmoreland County land bank summarized those challenges as, “Money, money, money.” Redevelopment Coordinator for the Dauphin County land bank, Will Gordon, said “the biggest challenge is funding and there’s not a lot of it there.” Gordon said he spends most of his time searching for grants for the land bank.

Kopas and Gordon agreed that the 5-year 50-percent tax clause in the law will come in handy once they process some properties, but they need some startup capital. So far, the Dauphin County land bank has received a $250,000 gaming grant and the Westmoreland County land bank is working with a $5,000 participation fee from each of its ten municipalities matched with $50,000 from the county’s redevelopment authority.     

Still, things are moving along.

Right now, the Westmoreland County land bank is processing three properties and planning a judicial sale. Meanwhile, Philadelphia is developing a strategic plan for its land bank, Dauphin County land bank just put out its first bid on a property, and Pittsburgh’s is waiting to seat a permanent board to develop its policies. Other jurisdictions are looking into starting land banks, as well.

Back in Pittsburgh, Guy pointed the car up a steep hill and drove past a boarded up house onto a grassy hill overlooking the Ohio River.  

“Look at these views!” she said marveling.  

Guy hopes the land bank will help new homeowners take over blighted property in the neighborhood so they can take advantage of such views. 

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Harrisburg City Council voted unanimously on July 8 to create a land bank in the city. Dauphin County, where Harrisburg is located, created the first land bank in the Commonwealth after Pennsylvania’s law authorizing the establishment of land banks passed in 2012, but it did not include Harrisburg in its jurisdiction.

Keystone Crossroads recently reported that advocates see land banks as a tool to deal with pervasive blight. The quasi-independent agencies can clear title and dissolve back taxes efficiently. Similarly, the Harrisburg land bank’s mission “is to return vacant and underutilized property to productive use through a unified, predictable, and transparent process, thereby to assist in revitalizing neighborhoods, creating socially and economically diverse communities, and strengthening the City’s tax base.”    

The land bank will be governed by seven board members, five of whom will be the sitting members of the redevelopment authority board, and an additional two members appointed by the mayor.