In a report released last week, Comptroller Scott Stringer advocates for the creation of a land bank to exploit vacant land remaining in New York City for permanent affordable housing. The report is a timely contribution to the conversation surrounding how to best use limited government resources to support the housing needs of working- and middle- class New Yorkers. But a land bank is just one of many institutional and legal mechanisms that could be used to achieve those efforts. Another tool that the government could use are Community Land Trusts. Here’s a look at how both might work.
Traditional Land Banks
A land bank would assemble parcels via city agencies and tax foreclosures and then allocate them to developers to build affordable housing. There are already land banks fighting blight by repurposing properties throughout New York State, but not in the city. For example, the Newburgh Community Land Bank, formed in 2012 in Orange County, has made remarkable progress in demolishing blighted properties and steering redevelopment for affordable housing. Land banks are eligible for special funds from the state, the state attorney general, and private funders.
Community Land Trusts
At the Center, we are particularly pleased that Stringer’s report discusses the potential benefits of community land trusts (CLTs) in conjunction with a land bank. Unlike a traditional land bank, a CLT retains ownership of land, which guarantees that housing remains affordable in perpetuity. The board of a CLT also typically includes residents and community members, ensuring that the community has a voice in decisions. As the report recognizes, the scarcity and expense of vacant land in NYC means that we cannot afford to subsidize housing projects whose affordability protections will vanish at the end of a contract. As a vehicle for ensuring permanent affordability, CLTs offer a way to make the most of government investments in housing. (Learn how CLTs are gaining momentum in New York).
Ceding Properties to Land Banks and Community Land Trusts
Both land banks and CLTs would need to acquire properties with help from the City. Here are three potential sources of this land in addition to city-owned properties:
Tax lien sales: The Stringer report proposes tax lien sales be reformed for this purpose. At present, when homes or vacant properties fail to pay their taxes, the City packages the debts and sells them to a trust that in turn issues bonds against the revenues from future collections. It’s a lucrative business, but it puts families at risk of homelessness and neighborhoods at risk of blight. The Comptroller proposes those properties be removed from the lien sale and transferred to a CLT that would maintain them as affordable housing.
NYC Community Restoration Fund: The Fund seeks to acquire distressed mortgage notes from the federal government. While the main goal of the Fund is to help existing homeowners avoid foreclosure and keep their homes, in some cases this may not be possible. In this situation, the next goal would be to preserve the property as affordable housing by transferring it to a CLT or land bank.
Bank-donated properties: Vacant and abandoned properties, including so-called “zombie” properties, are another potential source of affordable housing. Zombies are houses, often deteriorating, trapped in an unfinished foreclosure. A land bank or CLT could negotiate with banks to acquire these properties at below-market rates and rehabilitate them. For their trouble, the banks would receive Community Reinvestment Act credit and remove the problematic properties from their books.
From Policy Proposals to Reality
How do we move towards putting these ideas to work? Councilman Brad Lander of Brooklyn has introduced a bill to create a land bank that would give priority to developers building homes for low-income families. It’s a great step forward. Policymakers should also consider taking actions that will help to make New York a place where CLTs can thrive.
Image: Flickr/Ralph Hockens under Creative Commons license.