Reshaping a City, What To Do With All That Land - Dan Kildee, Co-founder and President of the Center for Community Progress

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Dan Kildee PresidentCenter for Community Progress

CEOs for CitiesNovember 8, 2010

Detroit, Michigan

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Community ProgressLaunched January 2010

Takes to scale the efforts of the nation’s leading organizations and individuals on issues of revitalization and reuse of vacant, abandoned, and underutilized properties.

The mission of the Center for Community Progress is to create vibrant communities in America primarily through the reuse of vacant, abandoned, and troubled properties in cities and towns

Community Progress focuses on: Federal, State, and local Policy; Research, Technical Assistance & Capacity Building; Coalition Building; Communications and Advocacy.

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Flint, MI and Washington, DC offices.

Focus on the relationships between national, state, and local policy and implementation.

Connects our work to national policymakers and allied organizations around the country

Provides the organization with real-life application and "grounding" of the focus of our work.

New Orleans office - January 2011

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Systemic vs. transactional approachRecognize chronic vs. acute challenge

Tax foreclosureLand bankingCode enforcementVacant property registrationReceivershipTax policy (i.e.: split tax, v.p. )Planning and design challengesDevelopment priorities and incentivesMortgage policy

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Federal role: invest in sustainability, capacity, innovation and systemic approaches. Think: Race to the Top

State role: modernize policy and systems, target investment, align processes and priorities with stated values

Local role: plan for sustainable development, internalize externalities, apply regional approach to urban challenges

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Example: Tax delinquency - methods of enforcement

Tax lien sales: efficient, privatized function. Results are uneven. Export profits to investor, conveys control to 3rd party.

Tax auctions/sales: efficient, quick, simple. Attracts speculative purchasers, title issues often complicate reuse. Recidivism.

Foreclosure/land bank disposition: retains profits and control of land, allows negotiated sales on terms that attract real investors. More work.

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What is a land bank?

A Land Bank is a public authority designed to acquire, hold, manage, and dispose of

foreclosed properties, as well as other vacant, abandoned, and

underutilized properties.

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Two pathways for property; 3 typical examples

Abandoned house, bad shape: another empty house that would take more to rehab than its worth, part of the oversupply of obsolete housing

Abandoned house, salvageable: empty house in an neighborhood struggling to remain stable. Worst house on the street, but could be occupied now or rehabbed.

Empty commercial building: title issues, cost of redevelopment, market issues all are barriers to reuse

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Abandoned house, bad shape: another empty house that would take more to rehab than its worth, part of the oversupply of obsolete housing

Option 1: sell at auction

Modest or no proceeds

Purchased by online purchaser

Re-abandoned, re-foreclosed

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Abandoned house, bad shape: another empty house that would take more to rehab than its worth, part of the oversupply of obsolete housing

Option 2: convey to LB

Demolish house

Sell to next door neighbor or loan to neighborhood group

A new garden, no more competition for worthy properties

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Abandoned house, salvageable: empty house in an neighborhood struggling to remain stable. Worst house on the street, but could be occupied now or rehabbed.

Option 1: sell at auction

Modest proceeds

Purchased by local landlord or online purchaser

Occupied, but still worst house

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Abandoned house, salvageable: empty house in an neighborhood struggling to remain stable. Worst house on the street, but could be occupied now or rehabbed.

Option 2: convey to LB

Rehab house, sell on land contract or other terms to attract homeowner

Modest profit, increase surrounding values. Worst to best….

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Empty commercial building: title issues, cost of redevelopment, market issues all are barriers to reuse

Option 1: sell at auction

Fails to sell; may sell for minimal amount to online buyer

Sits empty

Re-foreclose and start over

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Empty commercial building: title issues, cost of redevelopment, market issues all are barriers to reuse

Option 2: convey to LB

Package redevelopment financing

Locate developer or partner with one

Redevelop building, create a new standard, catalyze development

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What are the benefits of a Land Bank?

•Local control vs. speculator interests

•Local priorities as to use of land

•Local priorities as to “transferee”

•Focus on long-term vs. short term outcomes

•Economies of scale – internal subsidy

•Regional equity

Land Banks can be scaled to the size and needs of the community

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Land Banks: a new pathway for property:

• Foreclosure Prevention

• Housing Renovation

• Side Lot Transfer

• Property Maintenance

• Planning

• Rental Management

• Clean & Green

• Demolition

• New Development

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• Connected to the tax collection and foreclosure process

• Scaled at the most diverse real estate market possible

• Policy driven – transparent in policies and transactions

• Emphasis on community engagement and participation

Essential elements of an effective Essential elements of an effective Land Bank:Land Bank:

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Michigan State University Study

MSU Land Policy Institute•400 Genesee County Land Bank properties

•2-year study of the impact of intervention on surrounding property values

•26,000 properties affected

•$3.5 million invested (demolition, cleanup)

•$112 million in increased private value

http://www.geneseeinstitute.org/reports/index.html

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Our challenge:

Shrinking citiesCities in transition

Older industrial citiesWeak market citiesCities of Promise

Re-imagined cities

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Dan KildeeCommunity Progress

Flint, MI and Washington, DC

[email protected]