Mechanisms for Change: Land Banks
Over the course of the last month, the topic of Land Banks has been a hot one. The reason behind that can be found in Episode 3 of the My Town Hustle podcast. The trio at My Town Hustle does a much better job of educating listeners on the matter than I could ever do in a blog post; so, I highly recommend you listen to the experts in order to gain a better understanding of what land banks are, how they are created, and who manages them. Do yourself a favor and take 30 minutes to get educated on a topic you should know, and care more about. Episode 3 can be found here: EP 3 – Land Banks.
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The question I most often receive regarding land banks is: “What’s the Port’s stance on land banks?” As an organization, we possess deep respect and reverence for personal property rights. That said, we also support law and order. When someone acquires a piece of real estate, far more often than not, they were advised about the covenants that come with owning said real estate and they willingly agreed to service the debt, taxes, and other obligations that come as a requirement for owning real property. As an organization, we also have empathy for those that fall on hard times and face difficult decisions like paying medical or utility bills, rather than real estate taxes or other property upkeep expenses. All things considered, the Southeastern Ohio Port Authority is now on record as being pro-Land Bank, and here’s why…
Understanding that land banks are designed to address and remediate abandoned, blighted, and tax-delinquent properties, as the Executive Director of the Port, I am most interested in the tax delinquency issue due to its implications on our county’s budget, which ultimately influences my budget. Tax delinquent properties exist in all 22 townships in Washington County. In total at the time of this writing, there are roughly 1,300 delinquent properties on the Washington County Delinquent Taxpayers List totaling $3.4-million in unpaid taxes. To put that into perspective using 2018 real estate tax revenues as our reference point, we have an entire year’s worth of real estate taxes sitting in delinquency!
If you decide to filter through the listing of delinquent taxes, I would suggest you gain familiarity with the Ohio Secretary of State’s Business Search while you’re at it. Most certainly, a few familiar names will be on that list and if you’re like me, you’ll note the number of “fly-by-night” oil and gas companies that scooped up properties during the last boom cycle, then left town and left us holding unpaid invoices for real estate taxes. You’ll also see a plethora of LLCs that owe backed taxes. If you use the Business Search, you’ll see many of the LLCs are owned by locals who know (or should know) they have an obligation to pay taxes. Yet, they fail to do so. Within that list, are highly desirable, highly developable properties that could play host to new businesses, jobs, and tax revenue, but instead, nothing is happening with them. As a county, we need to be more aggressive in holding delinquent taxpayers accountable and a land bank is a mechanism for accountability.
In the course of my discussions regarding land banks, there are a few common talking points from the opposition. The issue of blight is often perceived as the only purpose for a land bank and blight is perceived to be a problem for cities; not the county at-large. However, blight exists throughout the county, and of the 1,300 properties that are delinquent on taxes – many of which are abandoned and/or blighted – less than 300 can be found inside the corporation limits of our largest city. Marietta currently has 290+ properties that are delinquent in taxes, totaling nearly $700K in backed taxes. Of the properties on that list that are not abandoned or blighted, many of them are again, highly desirable, highly developable properties that are currently underutilized. If you do your homework, you will quickly see that blight extends throughout the county, and abandonment, blight, and delinquent taxes are often three peas in a pod.
The other common argument against a land bank is that we have mechanisms in place via the Ohio Revised Code and standard county operating procedures to deal with tax-delinquent properties. To that point, one would think we would have far less than 1,300 delinquent properties, and if the status quo was working effectively and efficiently, we wouldn’t be leaving $3.4-million in uncollected tax revenue on our books. We’re entitled to our own perceptions as to what’s reasonable here, but I doubt I’m alone in finding these to be unacceptable metrics for a system and SOPs that are supposed to be addressing the issue. Again, as a county, we need to be more aggressive in holding delinquent taxpayers accountable and a land bank is a mechanism for accountability.
The most frequent and visceral reaction to land banks in this county can be summed up like this: “We don’t need more government”. Fundamentally, I agree. However, this statement conveys ignorance to the facts at hand. Land banks are private, nonprofits, and while largely composed of elected and appointed officials, the Board of Directors for a land bank could (and should) be structured such that it is nearly a 50/50 split of public and private sector representatives. In fact, it’s a requirement that the Board contains a representative that has private-sector real estate experience and best practices in the 56 Ohio counties that have land banks, indicate that maintaining a heavy private-sector presence on your land bank board is important for its overall success and wellbeing.
The last complaint I hear is that land banks are expensive to operate and while this can be true, Washington County is well-equipped to take on a land bank thanks to the infrastructure already in place with the Port Authority and other county departments. “Ah, ha! He’s in it for himself.” Well, I do preach the WIIFM Principle and while I believe a county land bank will derive long-term, lasting value for the greater good, a county land bank would also be good for the Port. We struggle to compete with other communities when it comes to business attraction due to an extreme lack of suitable sites. To repeat myself one last time, embedded in the list of delinquent properties are highly desirable, highly developable properties that could play host to new businesses, jobs, and tax revenue, but instead, nothing is happening with them.
If you desire more than the status quo, you must be willing to change. It is time for Washington County to embrace a land bank as a mechanism for much-needed change. In a post-COVID economy, our need for a land bank will only increase. It’s time for us to join the other 56 counties that have embraced this development tool and stop leaving money on the table.