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Training Day: Land Banking in Pennsylvania Starts with These People

John Kromer  at  the Housing Alliance seminar

Kramer fields questions

Keynote speaker Frank Alexander

Keynote speaker Frank Alexander

The Housing Alliance of Pennsylvania

Land Bank Training seminar audience

Downtown Reading

Downtown Reading

Like nearly every other community in the United States, Oil City is fighting blight.

Many residents left the northwestern Pennsylvania town after the Quaker State and Pennzoil petroleum companies closed down their headquarters there. Now many properties have been abandoned. Building code violations proliferate as the properties decay. The problem frustrates public officials who haven't yet found a solution.

But local governments in Pennsylvania might find one answer in a new tool being adopted in cities across the country: A land bank.

Essentially, a land bank is a public agency that acquires foreclosed and abandoned properties. Sometimes the bank buys the land, and sometimes owners donate property to the bank. Then those who run the land bank decide what to do with the land. Options include tearing down delapidated buildings, rehabilitating property and and hanging onto it until its value goes up in the real estate market, then selling it.

In October Gov. Tom Corbett signed a law allowing land banks in areas with at least 10,000 residents. These agencies will have powers including the authority to discharge tax liens on property. They're also allowed to set priorities for how the parcels will be used.

“The beauty of this, one of the beauties, is that the locals set the priorities,” says Frank Alexander, a nationally recognized land-bank expert who helped formulate Pennsylvania's law. “It is a tool that you can use to fit your neighborhood.”

So if a town needs more parks, it can focus on turning banked land into green space. If affordable housing is in short supply, a land bank can choose to sell its properties only to businesses that will transform them into reasonably priced residences. 

Alexander, director of the Project on Affordable Housing and Community Development at Emory University, spoke in State College during a recent event aimed at giving local officials across Pennsylvania a primer on the new land bank law. About 110 people from community development agencies, planning commissions and nonprofits came to learn more about land banks and how they might be useful in their communities on March 20 in an event sponsored by the Housing Alliance of Pennsylvania.
Progress in other cities
The country's first government-run land bank opened in St. Louis in 1971. Since then they've been set up in communities as large as the county that includes Cleveland and as small as the Kansas City suburb of Overland Park, Kan. Some have budgets in the millions of dollars and some assign powers and duties to jobs that already exist in local governments.

Venango County, which includes Oil City, is exploring the prospect of setting up a land bank. Karen Wenner of the Venango County Regional Planning Commission, says a bank could help deal with the county's numerous abandoned properties, some of which are paid up on their taxes. Perhaps these parcels could be reused as green spaces or offices for new industries. Maybe some of the houses could be rehabilitated and sold at below-market rates to lower-income workers who have a hard time finding affordable homes of their own.

“You would get these people out of their rental properties,” Wenner says. “Then their mortage could be lower than their rent.” 

Land banks around the country have been successful in removing blight from neighborhoods. The Cuyahoga Land Bank was set up in 2009 to address hundreds of abandoned, foreclosed houses in Cleveland. Former county treasurer Jim Rokakis told the audience in State College that Cleveland's real estate market is so distressed that in 2011, it took about three years to sell the average house. After the land bank was set up, he says, desperate property owners – many of whom had paid all their taxes – implored the agency to take over their unwanted properties.
The bank has taken ownership of nearly 3,000 properties. About 2,000 blighted buildings have been demolished, others have been bought by neighbors, and others remain with the bank.
Setting up land banks in PA
Alexander says land banks aren't for every community. They make sense if certain conditions exist. Those conditions include a fragmented patchwork of blighted property, a large number of parcels that have little market value, a high number of code violations, and a government foreclosure procedure that's ineffective in cleaning up vacant properties.

“If you're not careful when you create a land bank, you're going to expect it to solve all of your problems simultaneously,” he cautions.

At least two cities in Pennsylvania are taking steps toward setting up land banks.

One bill has been proposed in Philadelphia's city council to create a simpler way to deal with more than 40,000 vacant parcels. A bank is also being discussed in Reading. 

John Kromer, a former director of housing for Philadelphia, is consulting the city of Reading on setting up its prospective land bank. He says fixing the abandoned-property problem can boost the assets that cities in Pennsylvania have: layouts that are easy to navigate, downtowns full of potential, and desirable locations.

“Everyone's against blight,” Kromer says. “Everyone's in favor of blight removal.”

REBECCA VANDERMEULEN is a freelance writer who lives near Downingtown. As she tells friends out of state, that's between the cheesesteaks and the Amish.

Photographs by BRAD BOWER

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