The Pennsylvania Land Bank Resource Guide

A Housing Alliance of Pennsylvania Webinar

Presented by Winnie BrantonBranton Strategies LLC

April 15, 2016

Introduction and Acknowledgements

The Pennsylvania Land Bank Resource Guide is a self-help resource to assess whether a land bank is right for your community and, if so, how to proceed with planning, organizing and operating a land bank.

The publication will be released by the Housing Alliance at the Land Bank Summit on May 11 in Latrobe, PA.

Funding for the preparation and printing of the publication has been provided through the Claude Worthington Benedum Foundation.

Limited hard copies will be available, but the publication may be downloaded from the PA Blight Library, www.pablightlibrary.com.

Purpose of The Pennsylvania Land Bank Resource Guide To provide community leaders, county and

local government staff and elected officials with a self-help guide for land banks

To share the information gathered and insights gained from working with more than 40 communities across Pennsylvania to provide land bank training and technical assistance with funding from DCED

To build and expand on the Housing Alliance’s 2014 publication From Blight to Bright: A Comprehensive Toolkit for Pennsylvania

PA Land Bank Resource Guide

Section 1

• Overview of PA Land Bank Act and Land Bank Basics

Section 2

• Methods to assess whether your community might benefit from a land bank

Section 3• Guide for planning and organizing a land bank

Section 4

• Strategies for starting and operating a land bank

Section 5• Lessons learned and case studies

Section 1 Overview of PA Land Bank Act and Land

Bank Basics

Overview of PA Land Bank Act Act of Oct. 24, 2012, P.L. 1239, No.

153

68 Pa.C.S. §§ 2101-2120

Enables counties, municipalities with populations of 10,000 or more, and groups of smaller municipalities to create land banks Imag

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Why Was This Law Enacted? To enable communities to

systematically remove problem properties from an endless cycle of vacancy, abandonment, and tax foreclosure, and to return these properties to productive use.

To enable communities to systematically remove problem properties from an endless cycle of vacancy, abandonment, and tax foreclosure, and to return these properties to productive use Image source: Philadelphia Land Bank

Who Has A Land Bank?1. Dauphin County (excluding

Harrisburg) (May 2013)

2. Westmoreland County (December 2013)

3. Philadelphia (December 2013)

4. Pittsburgh (April 2014)

5. North East Pennsylvania Land Bank (June 2014)

6. City of Harrisburg (July 2014)

7. Venango County (August 2014)

8. Lackawanna County (June 2015)

9. Schuylkill County (December 2015)

10. Northumberland County (December 2015)

11. Washington County (March 2016)

What is a Land Bank?

A blight remediation tool

It’s a governmental entity whose single purpose is to convert vacant, abandoned and tax-delinquent properties to productive use.

Image Source: www.smartgrowthamerica.org

Why Land Banks? Proven tool for attacking

blighted properties Remove barriers to getting

problem properties back on the tax rolls

Uniform, predictable and transparent process

Central hub for blight prevention and remediation efforts

Photo credit: Julia Rowe via Flickr

Why Land Banks Are Important Change the market

dynamics of blight Address the high

cost of blight Harness the positive

economics of blight remediation

Who Can Create a Land Bank? Counties Municipalities with a

population over 10,000 Two or more

municipalities with combined population over 10,000

How is a Land Bank Created?

Created by ordinance and intergovernmental agreements

Filed with DCED and Dept. of State for incorporation

What Does a Land Bank Do? A land bank acquires, inventories, markets, holds, and transfers interests in real properties that are vacant, abandoned, and tax-delinquent.

The purpose is to rehabilitate or demolish the properties or get them into the hands of new owners who will improve them in accordance with the long term interests of the community and surrounding properties.

Who Runs the Land Bank?A board appointed by the land bank jurisdiction governs the land bank and may adopt bylaws.

5 to 11 members At least one member who is a community resident, not an

elected official, and a member of recognized civic association Subject to all sunshine and ethics laws Strong cross-over with Redevelopment Authority boards

Who Runs the Land Bank? Land banks may hire their own staff or contract for the use of current municipal employees. Land banks may staff municipal functions too.

One option: assign land bank-related responsibilities to municipal or county development agency staff that are already managing other real estate transactions—such as a redevelopment authority or housing authority.

What Local Conditions Favor Creating a Land Bank? Large inventories of vacant and abandoned properties Properties with little or no market value Properties with delinquent taxes that exceed FMV Properties with title problems Inflexible policies dictating the disposition of public property Speculation and uncertainty in auction sale of tax-foreclosed

properties

What Powers Does a Land Bank Have? “All powers necessary or appropriate” including Acquire, manage, hold and dispose of property With the approval of taxing authorities, discharge

or extinguish tax liens on property it owns Quiet title to property expeditiously But, no eminent domain power.

Property Acquisition Purchase Acquisitions/transfers from

municipalities Donations County repository for unsold

property Delinquent property tax sales

and enforcement

How Can a Land Bank Acquire Property at Judicial Tax Sale?A land bank may purchase a tax-delinquent property at the judicial tax sale (“free and clear sale”) through a negotiated agreement with the county tax claim bureau or other foreclosing taxing body, and without having to compete against other bidders at a public auction.

The land bank must give sufficient notice before using this power.

Hold Property Land banks may hold

properties long-term for strategic public purposes

Land bank property is exempt from state and local taxes Photo credit: Kellogg School of Business, Northwestern University

Extinguish Tax Liens Land bank may discharge liens on property it

acquires, subject to approval of the taxing authorities

Enables return to market of vacant and tax-delinquent properties with tax liens that exceed the value of the property

Expedited Quiet Title

Single complaint for multiple parcels Hearing scheduled within 90 days of filing Final judgment within 120 days of filing

Property Disposition Land bank must maintain a property inventory and make it

available to public Land bank may sell property for any amount and/or form of

consideration – as well as for any future use – it determines to be appropriate

No redevelopment agreement required Land bank must consider locally adopted land use plans Opportunity to foster equitable development

How Do We Pay For Land Banks? Because land banks deal with properties that no one else wants, it is rare that they are completely self-financing.

No funding provided in the Land Bank Act.

But, if the taxing authorities agree, a land bank may recapture up to 50% of property taxes collected on property conveyed by the land bank for up to five years.

Use existing capacity for staffing to minimize expenses.

How Do We Pay For Land Banks?Options: 5/50 Tax Recapture Grants and Loans Proceeds Contributions from Municipalities

Tax Sharing Provision in the law allows for sharing of real estate tax revenue with the land bank (up to 50%) when properties are returned to the tax rolls. Taxing authorities (municipalities, county, and school districts) need to agree. Sharing of revenue for a period of five years; after five years taxing authorities receive all of the revenue

Grants and Loans Keystone Communities Program Neighborhood Assistance Program PHARE (in Marcellus Shale areas) Gaming Local Share Account CDBG HOME Act 137 County Housing Trust Fund

Proceeds

A land bank may retain proceeds from property sales and leasing to fund its operations

Contributions from Municipalities General fund

appropriations Member fees In-kind assistance Properties

What Role Do Community Members Play?

Community participation on the Land Bank board

Public meetings and public comment

Transparency and accountability through public access to records and annual audit and report of activities

Section 2 Taking a Closer Look

Preliminary Assessment

Useful steps worth considering… Create a task force or working group Educate key decision-makers and constituencies

about land banks Gather and analyze relevant data and information Learn about the tax sale process, and review

results Explore and understand intergovernmental and

interagency dynamics Provide for substantial and meaningful public

involvement Make a preliminary needs assessment and

determination of feasibility

Will our community benefit from a Land Bank?

Section 3 Planning and Organizing a Land Bank

Land Bank Programming and Planning

Select the Land Bank jurisdiction Establish the Land Bank’s missions and goals Determine how the Land Bank will be

administered Determine the scope of program activities Coordinate with local planning and

development agencies Draft a strategic plan Draft a business plan with a budget Draft acquisition and disposition policies and

procedures

What will our Land Bank look like?

Organization Draft an Ordinance authorizing a

Land Bank Draft any necessary

Intergovernmental Cooperation Agreements

How do we form a Land Bank?

Building Support

Clearly define the problem and show how a land bank can help

Focus on the costs of doing nothing

Highlight the Land Bank’s partnership with taxing authorities

Share success stories from established land banks

How do we get this done?

Section 4 Setup, Startup and Operations

Setup and Startup

Incorporate and prepare bylaws

Organize your board Finalize and execute ICAs Create and approve

organizational policies

How do we get off the ground?

Operations

Contract for staff and services Procure necessary insurance

and professional services Create an inventory

management systemWhat do we need to operate?

Acquiring and Holding PropertiesAcquisitions are guided by the land bank’s acquisition policy -- how many and which properties to acquire.

Targeted and intentional

Most land banks will want to move properties quickly to new owners, avoid costs of holding and maintaining properties.

Discharging Liens and Clearing TitleTo convey property, a land bank must be able to offer clear, insurable title to potential buyers and redevelopers.With the approval of the taxing authorities, a land bank can discharge tax liens. A land bank can use the expedited process to quiet title to a property when necessary.

Disposing of Properties In accordance with local priorities (as set

forth in the ordinance or in the land bank’s disposition policy)

In accordance with other established criteria – pricing, qualified purchasers, redevelopment requirements

Consider local land use plans New housing, businesses, parks

Recordkeeping Keep minutes and

records of proceedings Annual audit of income

and expenditures and report of activities filed with DCED

Section 5 Lessons Learned and Case Studies

What Have We Learned So Far? Good data generates support

for a land bank Bring all partners and

stakeholders together as early as possible

Use already-available resources Be patient (but not too patient) Leadership matters

CASE STUDY: Westmoreland County Land BankFormer Monsour HospitalCity of Jeanette, Westmoreland County

CASE STUDY: Dauphin County Land Bank AuthorityTuscarora Street (Before)Susquehanna Township, Dauphin County

Tuscarora Street (After)Susquehanna Township, Dauphin County

CASE STUDY: Philadelphia Land Bank

ConclusionThe Pennsylvania Land Bank Resource Guide can help you: assess the power and potential of a land bank for your community and then, if you choose, move ahead with planning, organizing and

operating a land bank.We’ve included sample documents, such as ordinances, business plans, bylaws, budgets, audits and more that you can adapt and use.

For more on Pennsylvania Land Banks, please join us for the Land Bank Summit in Latrobe on May 11 and 12!