Last year, we wrote about a first-of-its-kind agreement forged by the Cuyahoga County Ohio Land Bank and Fannie Mae, the national mortgage lender that owns dozens of foreclosed properties in Ohio. The Cuyahoga County Land Bank, like other land banks across the country, is a quasi-governmental entity with the capacity to attain and manage vacant properties in the greater Cleveland area.
Through that partnership, Fannie Mae agreed to sell its most troubled foreclosed homes to the Land Bank for a nominal fee, and to help cover the costs of demolition for properties that were too far gone for the land bank to salvage.
Since that time, the Cuyahoga County Land Bank has formalized relationships with a handful of additional lenders. Bank of America and Wells Fargo both joined the group this summer, pledging to donate vacant and foreclosed homes to the Land Bank and to help pay demolition costs ranging from $3,500 to $7,500.
Partnering directly with a land bank allows lenders to avoid the ongoing maintenance costs of keeping rundown, foreclosed homes up to code and on the market. At the same time, the land bank gets the financial support it needs to demolish distressed, blighted homes, which threaten surrounding property values and undermine neighborhood stability.
In fact, when the Cuyahoga County Land Bank was originally conceived, its leadership thought it would have to foot the bill for all demolition. Now, participating lenders (which also include JP Morgan Chase and Citibank) will help pay for half of the land bank’s 700 scheduled demolitions this year.
The success of the Cuyahoga County Land Bank’s work has implications well beyond Cleveland. NPR reports that similar public-private partnerships may be piloted soon in Detroit, Chicago, and Milwaukee. Likewise, land banking’s effectiveness in Ohio helps illustrate why New York’s recently passed land bank bill as well as those pending in Pennsylvania and Georgia are so critical.
As the Cuyahoga County Land Bank forges ahead, we expect more innovative practices to emerge, and more neighborhoods to thrive as a result.
‘Land Bank’ Knocks Out Some Foreclosure Problems [NPR, August 29, 2011]