Land banker
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Land banker it is a person who provides land banking services and should not be mixed up as finance services provider. Land banks are not recognized as financial institutions. They are semi-governmental and community-owned organizations created for a single purpose – to manage, maintain, acquire and remodel vacant and abandoned properties. Usually those are forgotten buildings, abandoned houses and empty lots. Lands banker is responsible of improving raw lands and maintaing an ivenotry of improved lots [1].
Process of land banking
Land banks get properties through tax foreclosures, nonprofit or intergovernmental transfers, and purchases on open-market. The most popular method of acquisition is tax foreclosures. They give opportunity to local or state taxing authorities to retrieve delinquent back taxes, due to possibility to impose a lien on a property with no owner's consent. After this, according to state/region foreclosure laws, properties are sold to public auctions. In case of any remaining unsold properties are deeded to land banks. Subsequently, land bankers [2]:
- promote acquisition process and the redevelopment of blighted properties by prosecution powers authorized in local statutes, including the ability to waive taxes and clear titles
- provide maintenance services for abandoned properties and vacant lots
Often happens, that land bank acquires a large number of properties which are not sold immediately; those create a need for upkeep. Such activities include routine maintenance of property and demolition of dilapidated structures (especially in case of places that pose safety hazards). [3].
The significance of the economic and housing crisis – roots of land banking
The economic and housing crisis in recent has been observed in United States since the early 2000s and even nowadays America's communities are facing deep and far-reaching consequences. Throughout most of the states, residential mortgage foreclosures raised to levels which had not been experienced in 75 years, while other communities experienced 25% or more declines in property values. With those overwhelming density of foreclosures in particular regions, the amount of vacant properties reached record levels. Land bankers has been supporting local communities especially during crisis and avoiding collapses on local markets. In case, when demand for housing disappears, what has been a strong and vibrant community or neighborhood once, may change to a declining wasteland. What is more, in many examples local governments lack effective tools, this should support local community and revers such a serious consequences [4].
Examples of Land banker
- The Land Bank of Kansas City, Missouri, is a non-profit organization that works to acquire, maintain, and redevelop vacant and abandoned properties. They have been in operation since 1993 and are dedicated to stabilizing and revitalizing neighborhoods.
- The Land Bank Authority of Genesee County, Michigan, is a semi-governmental organization created to acquire, rehab, and maintain vacant and abandoned properties. They are focused on creating a healthy and vibrant community by utilizing innovative strategies to redevelop vacant and abandoned properties.
- The Land Bank of Cook County, Illinois, is a quasi-governmental agency that works to acquire, maintain, and redevelop vacant and abandoned properties. They are dedicated to revitalizing communities and creating economic opportunity through the reuse and redevelopment of vacant and abandoned properties.
Advantages of Land banker
The advantages of a land banker are numerous and include:
- Improved land value – Land banking can help to improve the value of land over time as it develops the area and makes it more attractive to potential buyers.
- Affordable housing – Land banking can provide affordable housing to those in need. This can be done by creating public housing, which is housing that is managed and maintained by the government.
- Economic Development – Land banking can stimulate economic development in a community. This is done by providing access to land for businesses and developers, which can then create jobs and help to revitalize the local economy.
- Community Revitalization – Land banking can help to revitalize an area by providing resources for new businesses and developments. This can help to create a stronger, more vibrant community.
- Environmental Improvement – Land banking can help to improve the environment, by preserving green spaces and natural habitats. This can help to benefit local wildlife and also help to reduce pollution and improve air quality.
Limitations of Land banker
A land banker can provide a valuable service to local communities, however there are a few limitations to consider. These include:
- Lack of Resources: Land bankers often lack the resources needed to acquire, maintain, and remodel properties. This can be particularly challenging when dealing with very large or complex properties.
- Regulatory Restrictions: Land banking is subject to local and state laws and regulations, which can make the process of acquiring and managing properties difficult.
- Limited Market Interest: In some cases, land bankers may find that there is limited market interest in the properties they are offering. This can be due to a lack of potential buyers or due to market conditions that make the properties undesirable.
- Limited Access to Capital: Land bankers may have difficulty accessing the capital needed to acquire, maintain, and remodel properties, which can limit the number of properties they can work on at any given time.
- Limited Knowledge: Land bankers may lack the knowledge and expertise needed to properly assess and manage properties, which can lead to mismanagement and financial losses.
A Land Banker is responsible for managing, maintaining, acquiring and remodeling vacant and abandoned properties. They also have other approaches to their work as well:
- Developing land use plans - Land Bankers are responsible for developing a plan that outlines how a particular piece of land should be used. This includes determining the best use of a property, such as whether it should be used for residential or commercial purposes, as well as what kind of improvements should be made to the land.
- Negotiating with local governments - Land Bankers must be familiar with local zoning regulations and be able to negotiate with local governments to ensure that any proposed changes to a property comply with the applicable regulations.
- Conducting due diligence - Land Bankers must conduct due diligence to assess the condition of a property and determine its true value. This includes researching the property’s history, inspecting the property, and assessing any environmental concerns.
- Managing the legal process - Land Bankers must be familiar with the legal process associated with buying and selling property, such as understanding contracts and title documents. They must also be able to manage the various legal issues that can arise during the process.
- Selling properties - Land Bankers must be able to market properties for sale and identify buyers who are interested in purchasing the property. They must also be able to negotiate the sale and close the transaction.
In summary, Land Bankers are responsible for managing, maintaining, acquiring and remodeling vacant and abandoned properties. They must also be able to develop land use plans, negotiate with local governments, conduct due diligence, manage the legal process and sell properties.
Footnotes
References
- Alexander S.F. (2015),Land Banks and Land Banking Center for community progress, MI, Unitated States
- Alexander S.F. (2011),Land Banks and Land Banking Center for community progress, MI, Unitated States
- Leonard B. and others (2009),Revitalizing Foreclosed Properties with Land Banks, DIANE Publishing, Reston, VA
- What is a Land Bank?(2019), "The Center for Community Progress"
Author: Anna Stach
