Historically speaking, land banking is a relatively new concept.
It first emerged in the 1960s as an urban planning tool. Over the past two decades, land banking has become an increasingly important tool for cities challenged by vacant and abandoned properties.
Many urban industrial centers throughout the nation were built for populations that simply were either never achieved or that were abandoned due to sprawl. In August 2011, the nation's banks, along with Fannie Mae and Freddie Mac, had an inventory of more than 816,000 foreclosed properties on their books, all waiting for buyers. An additional 800,000 properties were in the midst of the foreclosure process.1 While in this foreclosure process, homes are left vacant.
Vacancy at Home
Cleveland has an infrastructure of homes and other services that was designed to service one million residents. In 2011, Cleveland is home to about 390,000 residents, most of whom are poor. Those who own homes often feel trapped.
Vacant properties are a blight and they accelerate community disinvestment. In a nutshell, vacant properties:
- Contribute nothing to city tax rolls and actually drain already stressed city finances
- A study of eight Ohio cities by Community Research Partners and Rebuild Ohio found that 25,000 vacant and abandoned properties imposed approximately $15 million in direct annual costs to the cities and over $49 million in cumulative lost property tax revenues.
- Contribute to crime and create real public safety and health hazards
- Research by the National Fire Protection Association found that vacant properties create on average 12,000 fires and $73 million in property damage per year.i
- Research in Texas found that more than 80% of accessible vacant buildings showed evidence of criminal activity. Vacant structures were associated with narcotics trafficking, storing stolen goods, sexual assault and a variety of other crimes. Blocks with accessible vacant structures had crime rates that were twice as high as blocks without accessible vacant buildings.ii
- Are a blight on the aesthetics and attractiveness of a neighborhood
- According to a Federal Reserve Bank of Cleveland study, the average listing in Cleveland is almost 1,000 days. Neighborhoods affected by vacancy are simply not attractive to new homeowners.
1Washington Post, Oct. 12, 2011, "Banks turn to demolition of foreclosed properties to ease housing-market pressures"
iNational Fire Protection Association. (2002) "New Tool Ready To Combat Arson Vacant & Abandoned Buildings Targeted". Found online at: Urban Report
iiSpelman, William (1993) "Abandoned Buildings: Magnets for Crime?" Journal of Criminal Justice 21(5): 481-495.