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Public Land Disposition Plan
Significant MITOD development opportunities may exist on land that is controlled by local government. Public land is often underutilized and can act as a barrier to neighborhood investment. Public land that is not already programmed for other uses (schools, parks, fire houses, police stations, etc.) may be developable as mixed-income housing once it is sold to a developer. Local jurisdictions, if they do not already have one, can produce a public land disposition strategy to remove barriers, fuel real estate markets, and promote MITOD.
A public land disposition plan can help facilitate short-term development objectives. By selling or leasing land to developers, cities can unlock potential in station areas with limited land capacity or help enliven the local real estate market by contributing land to a catalyst project.
A local jurisdiction’s disposition process could utilize several MITOD-enhancing levers:
- Sales or long-term lease contracts can include specific MITOD-related stipulations
- Pricing can be adjusted downward to allow for greater affordability
- Disposition can be conducted competitively with affordability as the key criterion
Jurisdictions will need to focus on producing a transparent, accountable, and streamlined method of divesting their assets if one does not already exist. A potential strategy is a Land Bank Authority that focuses on acquiring and disposing of key parcels in the jurisdiction.
Cleveland is a Rust Belt city that saw its population shrink nearly 50% between 1950 and 2000 with the decline of its industrial economy and was hit hard by the foreclosure crisis that began in 2008; as such, it has faced the challenge of dealing with a glut of vacant property in many of its neighborhoods. Authorized by a 1976 state statute and later enhanced by House Bill 603 in 1988, the Cleveland Land Bank (CLB) is considered a national model for the acquisition and disposition of tax-delinquent properties to productive use.
Once tax-delinquent lots have been offered at auction and remain unsold, property identified by the City for development potential is transferred to the CLB. All other tax-delinquent property is transferred to the State of Ohio and sold at auction. Once in the CLB, property may be passed to a community development corporation (CDC) or private party who wishes to redevelop it. Prospective buyers of land bank parcels are required to submit a written proposal for reuse; proposals for new construction are given priority. While land is sold at "fair market value," financial assistance is available from sources such as the Cleveland Housing Trust Fund, the Neighborhood Development Activity Fund, and Cleveland Neighborhood Partnership Program (CNNP) comprised of LISC, The Enterprise Foundation and Neighborhood Progress, Inc., for CDC's looking to conduct development projects. On average, 500 CLB properties are sold to CDC's on an annual basis, and nearly 90% of all CDC properties in Cleveland are acquired from the land bank. The CLB has been praised for its transparency, organization, and close cooperation with CDC's in order to ease the disposition process.
In 2009, the Ohio legislature revised its Land Bank statutes and laws in order to address perceived shortcomings (Senate Bill 353/House Bill 602). The legislation allows for the creation of County Land Reutilization Corporations (CLRC's), which are nonprofit community improvement corporations carrying essentially the same mission as the CLB—to help acquire, reclaim, rehabilitate, and reutilize vacant land. Limited initially to Cuyahoga County, the new program alters the state's current model in four significant ways:
- Unlike traditional land banks, which are limited to particular municipalities, CLRC's are organized at the county level and therefore have the power to address vacant and abandoned housing on a regional scale.
- The Land Bank Bill streamlines the tax foreclosure process, which is the primary method of property acquisition for land banks.
- Whereas traditional land banks have no operating budgets or staffs of their own, the Bill secures a source of funding without creating new taxes and creates staffed positions to administer the program.
- Finally, the Bill allows CLRC's to organize as a corporation that is legally distinct from a local government. This provides them with greater flexibility to raise funds, coordinate with developers, and dispose of property.
Although Cleveland's disposition program does not specifically utilize TOD as an organizing strategy, its process for acquiring, assembling, and disposing of vacant parcels for reincorporation into the urban fabric may provide important lessons for TOD advocates.
- University of Michigan, Center for Local, State, and Urban Policy, Disposition of Publicly Owned Land in Cities: Learning from Cleveland and Detroit
- Federal Reserve Bank of Cleveland, Understanding Ohio's Land Bank Legislation
- Ohio Senate Bill 353, Land Bank Statute
- Local Initiatives Support Corportation (LISC), Model Practices in Tax Foreclosure and Property Disposition: Indianapolis Case Study