Land Bank Goes to Work on Flint
County uses new state laws to redevelop abandoned properties
January 6, 2005 |
Great Lakes Bulletin News Service
Now that the state has enacted new land bank laws, Genesee County can assemble and sell the abandoned properties its crews are cleaning up. Flint has over 5,000 such properties.
FLINT — Michigan State University professor Katherine Alaimo is one of those people that urban planners just love. Dr. Alaimo is making something new out of something old in a town that conventional wisdom says is long past dead and has nothing to offer people like her.
Two years ago Dr. Alaimo bought a well-maintained 2,200 sq.-ft. Victorian-era house on Lyon Street, 5 blocks north of Carriage Town in downtown Flint, from a bank for a price she would never find in East Lansing — $14,000. Then she bought six abandoned lots on the same street, at prices ranging from $50 to $200.
There’s a method to Dr. Alaimo’s approach, thanks to legislation that reflects some of the recommendations made in August of 2003 by Governor Jennifer M. Granholm’s Michigan Land Use Leadership Council. The legislation, known as the Land Bank Fast Track Authority, allows people like Dr. Alaimo to acquire abandoned property more quickly. It also enables township, city, and county governments to assemble and redevelop large amounts of long-abandoned property. Because Genesee County, where Flint is located, has been so aggressive in grafting that fast track legislation onto its already-active efforts at reclaiming abandoned land, Dr. Alaimo’s investments make a great deal more sense than most people think. All around this badly beaten-down city, including on her block, weed-, junk- and shack-infested properties are showing new signs of life.
They Can Now Do It All
Ironically, the authors of the six-bill fast track package, which Governor Granholm signed on Jan. 5, 2004, as Public Act 259, were not inner-city Democratic state lawmakers. They were rural Republicans — state Representatives David Robinson of Grand Blanc and Gene DeRossett of Manchester.
Their bills allow land banks to do virtually everything private development companies can do: Borrow money or sell bonds to raise capital; buy land on the open market; assemble land into larger parcels of any size; demolish, rehabilitate, or build new structures on the property; sell the cleared-out, cleaned-up, rehabilitated property, complete with unclouded title, to whomever it chooses; and collect half of the new owner’s first five years of property taxes.
There are two more things the land banks can do that private owners cannot: Foreclose much more quickly on tax-delinquent properties than they could in the past; and more quickly make sure the titles to them are unclouded.
“You have to find a way to ensure the sale,” Representative Robertson explained. “But you can’t even begin the process of making such properties available or demolishing an abandoned building until you resolve the legal problems.”
The new law, he said, accomplishes exactly that.
Until the fast track act took effect, long-suffering Michigan cities like Flint, Detroit, and dozens of others, large and small, were largely stuck with their abandoned property and no effective way to deal with it. By establishing a brand new bureaucracy to untangle the nasty results of an old one, Genesee County is not only tearing down and hauling away the unsightly junk that chased so many people from Flint’s badly deteriorated neighborhoods, it is also attracting people like Dr. Alaimo. If things go well, the county could play an important role in reviving Flint and helping to curb sprawl in a state whose sprawl-spawning land use policies are among the nation’s worst.
A Unique, Head-turning Model
Genesee County began working on land reclamation within Flint three years ago. In good weather and bad, county crews continue the bull work necessary for reclaiming long-abandoned properties: Stuffing downed branches into wood chippers and hauling away an incredible variety of junk, including old tires, used diapers, car seats, sinks, mattresses, musty clothing, and even dead animals. The county funded the activity through the fines it levied on tax-delinquent property owners.
But until the fast track legislation became law, not much happened after the properties were cleaned up. Investors and speculators could still buy the tax liens on such properties by paying their back taxes and then, quite often, spend years in court with the delinquent property owners and other tax lien buyers haggling over who owned what. Now, under the new program, speculators cannot buy the tax lien unless they buy the property, and local governments can foreclose quickly on delinquent properties and hand them over to a land bank for management. The land bank might demolish the house that’s on the property; it might let a tenant buy it; or it might auction the house, together with the liens, to the highest bidder.
The new system is generating some sorely needed progress in Flint, which, according to the 2000 U.S. Census, had 5,100 abandoned lots — a huge number for a city that, according to the census, has about 55,000 housing units. The program is also generating some badly needed funding for itself; before, the county could only collect fines for late tax payments and had to allow lien buyers to keep whatever they could get back from recalcitrant owners. Now it is the county that is doing all the collecting — particularly when it succeeds in buying, restoring, and re-selling a property.
“Under the new system the money goes into a restricted fund that can only be spent to take care of the land that we end up getting stuck with through the tax foreclosure process, ” according to Genessee County Treasurer Dan Kildee, the brains behind the land bank.
Such self-financing makes the new program extremely appealing to local government administrators. Now property owners who owe back taxes have to pay the land bank an additional fee for being late; and now the land bank can actually sell the few nicer homes or buildings that it acquires and keep the profits. So the land bank spends the bulk of its funds cleaning up homes and empty lots, transforming them from worthless holdings into profitable parcels.
"There is no other system in the United States that pulls together the ability to quickly assemble property into single ownership by the county, the tools to manage it, and the financing tools to develop that property,” Mr. Kildee said of the new fast-track law that his county is integrating into its own ongoing efforts. He added that eight other Michigan county treasurers have contacted Mr. Kildee to learn how they can start land banks.
Such widespread interest in the new approach does not surprise urban planner Rex LaMore, a professor at Michigan State University. Essentially, Mr. LaMore says, the county’s land bank is stepping in where pure market forces have become destructive. That means that behind Flint’s many difficulties — brought on by the double whammy of heavy de-industrialization and Michigan’s sprawling land use patterns — are some remarkable opportunities. Because the land bank owns 2,800 vacant properties, more than half of the city’s inventory, Mr. LaMore says it could set an example that other municipalities can follow.
“It’s a city with more green space,” he said, referring to the large tracts of land that are now bereft of buildings, “a city that reflects a more livable environment. The question is, ‘Do we have the resources?’ The land bank model does provide some opportunity to do that. This is an opportunity that comes around maybe every two or three hundred years for a community to reinvent itself in a new way. I think the county and the leadership of the land trust (bank) and the people of the Genessee-Flint area seem to be very good and the potential for success in envisioning and recreating a new future is very high.”
Local officials are not the new land bank program’s only fans. It also has support among at least some of the area’s private developers and landholders.
Terry Hanson, the current president of the Genesee Landlords Association, is one of them. Mr. Hanson owns and manages one hundred properties from his office, which was once a lumberyard. Land bank officials say he is one of Flint’s better landlords, one who still keeps his personal residence and business within the city. He says the land bank isn’t working against his private interests; it’s just not working fast.
“Over the long term I think it’s a good program,” Mr. Hanson said. “They just need to move on it quick. You can’t let the property sit vacant. Every day that you leave a house sit vacant the property gets trash dumped into the driveway. They steal aluminum siding. It’s vandalized. The roof may be leaking and there is further damage.”
Hanson says he doesn’t know of any developer ready to invest in Flint on a major scale. But he does know other landlords with good reputations like him who would like to buy some of the land bank’s properties.
Doing Their Part
Art Potter, who is running the land bank’s aggressive new program for Mr. Kildee, says he and his staff are working as fast as they can. Mr. Potter said he jumped at the job because, with the new legislation, the position came with some teeth. He said he needs every one of them to take a bite out of the existing backlog of properties the county now manages, as well as the eight or nine hundred more he predicts will come to the land back on April 1, when the county treasurer’s office turns the previous year’s batch of foreclosed properties over to the county agency.
After thirty years of community activism and non-profit work, Mr. Potter’s desire to do good works remains strong.
"Even though the City of Flint has lost 70,000 people in the last 30 years,” he said of his hometown, whose current population is approximately 124,000, “the people who are still here deserve to have a nice environment to live in. So our immediate goal is to get control and clean these properties.”
Meanwhile, Dr. Alaimo continues to do her part. This fall she hired some local youngsters to use her lawnmower to keep the lawns on her half-vacant block trimmed. She’s paying a handyman to scrape, sand, paint, and do some light carpentry on her newly acquired properties. And she is selling one of them to Ella Greene-Moton, a community health worker who has lived in the neighborhood as a renter but who wanted to own her home. She just moved into the home with her daughter, son-in-law, and her grandchild.
“This nice lady has purchased property in the area,” Ms. Greene-Moton says, nodding towards Dr. Alaimo. “I’m purchasing property in the area. We’re looking to bring Flint back from the inside out. And we’re hoping that we’re going to motivate other people to do the same thing, to do something productive with this land.”
Ms. Greene-Moton also intends to buy two empty lots next to her house that were recently mowed and cleaned up. She says it’s just right for a children’s playground. It will be open to kids in the neighborhood, she says, but she and her daughter will be in charge.
Chris Mccarus is a freelance journalist living with his wife and four kids in a house once condemned by the City of Lansing. He spent seven years in Brooklyn, N.Y. where he witnessed the revitalization of his severely troubled neighborhood. Email him at email@example.com.