LAND REVITALIZATION FACT SHEET
L.AND BANKING
The growing inventory of tax-fore-
closed properties in economically
distressed urban areas is reducing
tax revenues, placing additional strains
on the delivery of public services,
and destabilizing neighborhoods. An
increasing number of state and local
governments are authorizing the cre-
ation of land banks to take ownership
of and manage these properties in the
long-term interest of the communities
affected. A land bank is a governmental
or nonprofit authority created to acquire,
maintain, and stabilize vacant, aban-
doned, and tax-delinquent properties
while working with other entities to
promote the productive reuse of the
properties. Land banks in several
states are using EPA Brownfields grants
and Targeted Brownfields Assessment
funding to facilitate the use of aban-
doned properties.
The structure and function of land
banks vary widely because they are
created under enabling state legisla-
tion and enacted by local ordinances.
The essential function of a land bank is
the ability to streamline tax foreclosure
proceedings and clear title to property
that reverted to public ownership. This
function allows communities to plan for
the reuse of properties that previously
were difficult to acquire and redevelop,
and to protect neighborhoods from the
blight and decline often associated
with tax-foreclosed properties.
Land banks generally are provided the
authority to acquire a large number of
properties, over 10,000 in some cases.
Some properties are potentially con-
taminated. Even residential properties
can be contaminated with hazard-
ous substances such as lead-based
paint, asbestos, and pesticides. These
properties need to be assessed and
contamination needs to be cleaned
up before the property can be reused
to the benefit of the community.
Although local governments that
acquire properties involuntarily (for ex-
NEW ENVIRONMENTAL SOLUTIONS
EPA's land revitalization initiatives are producing significant environmental
benefits and helping to transform communities into more sustainable
and livable places. The strategy of encouraging market-driven rede-
velopment of brownfields and other contaminated sites for economic
reuse is proving to be a successful approach at many sites. However,
challenging real estate markets and economic realities can leave some
formerly contaminated properties unused, possibly for a long time. New
approaches are needed to revitalize these sites and protect human
health and the environment.
EPA's Land Revitalization Team is working with communities, states, other
federal agencies, academic institutions, nonprofit organizations, and
the private sector to develop and test new approaches that recognize
valuable reuse alternatives for formerly contaminated properties. Build-
ing green infrastructure to help manage stormwater runoff and floods,
promoting safe soil management to support urban agriculture, and sit-
ing renewable energy on contaminated sites can bring environmental,
ecological, and social benefits to communities. Unlocking the potential
value of these underused properties often requires creativity and close
collaboration with many public and private partners. These projects
can help stabilize communities and spur economic development.
ample, through tax foreclosure) are not
liable for prior contamination, liability
concerns may arise if land banks are
not created as entities of a local gov-
ernment. EPA is working with these new
entities to clarify potential liability issues
and promote the use of land banks to
support community revitalization.
While land banks historically acquired
properties through tax foreclosures, the
passage of the Housing and Economic
Recovery Act (HERA) in 2008 provides
funds to state and local governments to
acquire mortgage-foreclosed proper-
ties. HERA created the Neighborhood
Stabilization Program (NSP) within the
U.S. Department of Housing and Urban
Development (HUD) to provide emer-
gency assistance to communities hard-
est hit by home abandonment. Under
the NSP a home is considered aban-
doned once mortgage or tax foreclo-
sure proceedings are initiated and the
property is vacant for 90 days or longer.
State and local governments can use
NSP funding to establish land banks, if
enabled by state legislation. The land
banks can use NSP funding to acquire
abandoned homes and then rehabili-
tate and rent or sell the home. Dilapi-
dated homes that pose safety hazards
can be demolished. All activities
funded by NSP must benefit low- and
moderate-income persons.
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GENESEE COUNTY LAND BANK AUTHORITY
The Genesee County Land Bank in
Michigan is widely regarded as a
national model for land banks. The
program encourages the reuse of
more than 4,000 residential, commer-
cial, and industrial properties acquired
through the tax foreclosure process.
Flint and other communities in Gen-
esee County have struggled with
population decline and property
abandonment for decades. About
a third of Flint's properties are now
vacant lots or abandoned houses.
Under Michigan's former tax foreclo-
sure laws, local governments could
not take control of tax-delinquent
properties. Instead, properties unsold
at auction became state-owned after
a foreclosure process that could last
seven years.
The state passed legislation to allow
counties in Michigan to foreclose and
take title to tax-delinquent properties
much more quickly. Counties can use
revenue generated from the sale of
foreclosed properties to manage their
inventory of properties. Michigan also
enacted a law allowing counties to cre-
ate land banks. The law allows counties
to adopt a brownfield redevelopment
plan for tax-foreclosed properties, thereby
facilitating the use of tax-increment
financing to pay for upfront cleanup,
demolition, and title clearance.
Under these authorities, Genesee County
created the Genesee County Land Bank
Authority (GCLBA). Neighborhood
revitalization, homeownership, and
increasing housing opportunities for
low-income families are GCLBA's top
priorities. GCLBA finances its op-
erations through its sales and rental
programs, collection of delinquent
property taxes on transferred proper-
ties (for five years), and tax-increment
financing for cleanup and demoli-
tion. The GCLBA received almost $3
million in grants from EPA to assess,
clean up, and plan for the reuse of
contaminated properties. Genesee
County also received over $10 million
in NSP funding from HUD to acquire
and plan for the reuse of mortgage-
foreclosed properties.
CUYAHOGA COUNTY LAND REVITALIZATION CORPORATION
Cuyahoga County, Ohio, is home to
over 35,000 vacant homes due to tax
and mortgage foreclosures. The aban-
donment and decay of these homes
is severely affecting home values and
destabilizing county neighborhoods.
To fight this crisis, in 2009, Ohio
passed a law allowing the formation
of nonprofit county land reutilization
corporations (land banks) to facilitate
the rehabilitation and reuse of va-
cant, abandoned, and tax-foreclosed
property. The Cuyahoga County Land
Reutilization Corporation (CCLRC) is
the first such land bank established
in Ohio. The CCLRC works with cit-
ies, other units of government, lend-
ers, and property owners to acquire
troubled properties and return them to
productive reuse.
The CCLRC acquires tax- or mort-
gage-foreclosed properties held by
government agencies, banks, and
government-sponsored enterprises
such as Fannie Mae. Properties with
structures that have reuse potential are
rehabilitated and sold. Structures that
are unsafe or cannot be rehabilitated
are demolished. The resulting vacant
land can be used for approved de-
velopment projects or become part
of community-wide planning for future
reuse. Beyond new housing, retail, or
commercial projects, this newly avail-
able land can be used to create public
greenspace and for urban agriculture,
stormwater management, and other
innovative and ecological reuses. The
county partners with its cities on all prop-
erty reuse decisions.
Among CCLRC's accomplishments is
an agreement negotiated with Fannie
Mae to stop selling low-value proper-
ties to speculators. Instead, low-value
distressed properties are transferred to
CCLRC for $1 and Fannie Mae con-
tributes $3,500 to the land bank for
each property.
The CCLRC's primary source of fund-
ing is from penalties and interest on
property taxes and assessments that
are not paid when due. CCLRC also
generates revenue through the resale
of acquired properties and through
grants from foundations and govern-
ment programs. CCLRC and its part-
ners received nearly $41 million in NSP
funds to demolish blighted homes and
renovate others in 20 county neigh-
borhoods. CCLRC also received a
$400,000 EPA grant to assess contami-
nated sites for environmental risks and
potential redevelopment.
Former auto dealership in Berea, OH,
acquired by CCLRC with NSP funding
MORE INFORMATION:
Visit EPA's Land Revitalization program website at http://www.epa.qov/landrevitalization/
HUD's Neighborhood Stabilization Program website: http://hud.gov/nsp
United States
Environmental Protection
Agency
Office of Solid Waste and
Emergency Response
(5105T)
EPA 560-F-11-006
April 2011
www.epa.gov/brownfields/
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