Land bank

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Land bank is an institution owned by community, its purpose is to acquire, repurpose vacant, manage and maintain forgotten buildings and abandoned properties.

Land bank nowadays

At the beginning Land Banks were used to enlarge the agricultural properties but nowadays they have much wider use. Land bank gives an opportunity for communities to change the destiny of abandoned properties according to community's needs such as: destroying buildings which unfit for habitation and instead of them making open green areas, renewing interesting houses; making to stay lands which can be used in the future. Land bank regards properties as entities which were used in the past but also can be used in the future [1].

Types of land banks

There are two types of land banks - local embeddedness and long-term or short-term strategy. Land banks are usually rooted in local communities [2].


The most important goal of land bank is to show benefits of land market's mobility. By using land banks it is possible to reach objectives such as:

  • land management
  • land consolidation
  • realization of infrastructure programs
  • development of rural and urban areas
  • battle with abandoned areas


Land banks’ basic function is to manage the reconstructions of plots of land. The plots of land can be passed to non-profit organizations or to private developers. Notwithstanding when reconstructions happen as public entities they must provide that the actions which take place are compatible with strategic objectives of the local community [3].

Initially land banks were created to help realization of land consolidation and enlargement of the agricultural areas; these are still the main objectives of land banking in Europe. The goals have been expanded especially in Denmark where land consolidations have been broadened of development of rural and urban areas, hereby making land mobility much bigger.


Farmers in some countries are struggling mainly with problems related to no co-financing. The issue of acquiring agricultural areas does not only exist in countries during the transition period but also in countries which are highly developed. Closeness of city centers and opportunities of their expansion make the price of agricultural areas higher which makes buying these lands for ordinary farmers very difficult. Development of urban zones affects the increase in price of the agricultural areas and also on the rental price. Thus many farmers cannot afford the agricultural lands. This happens often in densely populated regions of Europe. Except the basic activities in these countries, a large part of activity is intended for sale and holding agricultural land at much cheaper prices than those which appear on market. Such activities are carried out to regulate the market and to contribute to economic progress [4].

Land acquisition by various mechanisms provided by law is the way to expand and supplement land bank. The right of ownership changes when the state takes over land that is incorporated into land banks. Land banks can make terrain function change without changing owner's rights. Thanks to land banks when owner is emotionally attached to the land, he does not have to sell it to use his property in a better way. There are also conflict-related investments; land banks are also involved in financing such properties [5].

In most countries, land banks are state-owned, which means that land banks are financed by the state, therefore money from the sale and lease of land are given away to the state budget. Lands in land banks are not taxed, in order to reduce their maintenance costs, which contributes to the development of non-profit developers [6].


  1. (D.Milićiević, (2014),p.569)
  2. (J.D.Gerber, (2018),p.41)
  3. (D.Milićiević, (2014),p.569)
  4. (D.Milićiević, (2014),p.570)
  5. (K.Geary, (2012),p.10)
  6. (B.Leonard, (2009),p.11)


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Author: Monika Sojka