Land Banking

Land Banking

Land banks are governmental entities focused on converting abandoned, vacant, and tax delinquent properties into productive spaces. Abandoned properties can destabilize neighborhoods, create safety hazards and become a financial burden on the surrounding, tax-paying properties.  
 
Land banks offer solutions to the growing trend of abandoned properties by strategically using government authority to intervene and acquire title. After clearing title, land banks help convert these abandoned properties into community assets, such as affordable housing, open space and commercial development.

How does land banking work?

The purpose of land banks is to restore abandoned properties back to productive spaces ready for responsible ownership in alignment with local land use goals. To achieve this goal, land banks develop acquisition strategies that best position the property to be reconnected to the private market or some beneficial community use. 

Land banks work through the tax system, foreclosure system, voluntary donations and purchases and partners with municipalities, community groups and community-based developers to identify a viable, productive reuse plan. Land banks can also hold land and aggregate parcels for larger projects, including flood management, transit-oriented development and park district or school district expansion.

What kinds of properties do land banks acquire?

Most land bank acquisitions are vacant, tax-delinquent properties and may include: 

- Tax delinquent parcels
- Real Estate Owned properties
- Vacant residential single-family homes
- Vacant lots
- Multifamily dwellings
- Commercial/industrial properties

When does it make sense to use land banking?

If your community is considering land banking, they need to assess multiple factors to see if it makes sense. Some factors for creating a land bank include:

- Large inventories of vacant and abandoned property
- Properties with little or no market value
- Delinquent taxes in excess of market value
- Title problems with property
- Inflexible public property policies
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