Landbanking becoming a popular government program. Post 113

Land bank top priority in 2009

the herald-dispatch w.va.   November 29, 2008

HUNTINGTON -Mayor-elect Kim Wolfe says creating a land bank will be one of his first orders of business when his administration moves into City Hall on Jan. 1.

“I’ve always said it is a good idea because it puts the city on the fast track of acquiring abandoned homes and tearing them down,” Wolfe said last week. “So is it a high priority? Absolutely.”

Last year, city fire inspectors condemned 62 houses, found 111 that required major code improvements and identified 47 that had been damaged by fire. Dozens more have not been inspected yet or are a year or two more of neglect away from being classified as being in disrepair.

A land bank is one of the key components of Huntington’s home-rule plan. A state panel in May chose Huntington and three other cities – Charleston, Wheeling and Bridgeport – to participate in a five-year, home-rule pilot program.

In addition to a land bank, Huntington was authorized to implement a 1 percent occupation tax,

Holley and Bell have been …realizing the detrimental impact that the county’s annual tax lien sale has on the city’s housing stock.

Under the proposal, the city would be allowed to purchase all of the tax liens within city limits at the county’s annual tax sale. Rather than an out-of-state real estate investor collecting interest on the property, that money would go to the city. The city would use the interest money to board up the property, cut the grass or demolish the property if it is on the city’s unsafe buildings list.

Holley said. “Once we buy the tax lien at the sale, we will infuse resources to clean up the property and make it look as respectable as possible.”

The city then would place a lien on the property for the costs it incurred to clean it up, Bell said. The county would not allow the owner to redeem the property until the taxes and the city’s lien are paid.

“Bell said. “The city can’t afford to spend a bunch of money on the property and not collect until years later. The liens have to have the same stature as the property taxes.”

“Holley said. “We could do a number of things with the property at that point. If the land bank receives a vacant lot, we could offer it to the homeowner next door for a minimal fee. We could give property to a developer if they agree to build a new home on it. We also could assemble lots over time that would become valuable for commercial development.”

The process would benefit everyone involved, Holley said. The city would have the ability to take possession of dilapidated property. The county would sell all of its tax liens in the city. And residents would benefit through the removal of an eyesore in their neighborhood.

One hurdle that remains is securing a loan for the initial purchase of tax liens next year, Holley said. The land bank program would eventually become self-sufficient through the interest earned from the tax liens and the sale of property, he said.

Bell said the Legislature should shorten the time period given to property owners to pay their taxes…

See entire article: http://www.herald-dispatch.com/news/x59588949/Land-bank-top-priority-in-2009

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Coach Mitch’s REFLECTIONS

 

The Constitution of the United States of America

In the Preamble and in two different places, the constitution says that our government must defend a citizen’s right to his life, his liberty, and his property. The defense would be from incursion by other persons and from the government itself. Our government is required to defend US from it. Our founders wrote the constitutional requirement because they understood that government has always been the vehicle for scoundrels to acquire power and wealth at the expense of the people.

The Future?

I am increasingly seeing that local governments are going into the real estate business. The government is responding to local demands that “something” be done to reduce the number of dilapidated houses, to retard the steady expansion of bad neighborhoods into the bordering better neighborhoods and to give relief to the property tax base.

Government IS the problem

Community activists, wanting something for themselves, lobby (hound) the government to “improve” the situation. Government always makes a bad situation worse because of the many rules that must now be followed which significantly inhibit the potential for a market solution.

Government creates a problem by insinuating itself into a situation and then government makes it worse by implementing a “cure.” When it comes to government “fixes,” why is it that the cure is usually worse than the disease?

Government housing

No matter where you go, government housing is rundown, depressing, a hub for criminal activity and generally, a place where dreams are dashed and futures squashed.

A government solution, as represented by government housing, is not our best example of freedom at work.

A sign of the times

Government inserting itself into the marketplace has been well established.  It almost always has terrible results for the public. I say “almost” because the Law of Averages says there must be at least one government program that is very successful AND cost effective. I just do not know of any.

$700 billion government failure

Government enforced lending policy and criteria required banks to make loans to those who should not have qualified. The Foreclosure Bomb is largely a result of very bad government policy and extremely bad regulatory oversight. The government is blaming the banks, but, largely, the banks were carrying out government mandates and we are living with the result. This is government inserting itself into the marketplace, supposedly for good reasons, with the predictable disastrous result.

Laws already on the books

All local governments already have all the tools that they need to accomplish the goals it wishes to clean up a neighborhood. Condemnation of a property is well established. The government tears down the property because of safety concerns, and then acquires the property via eminent domain or tax foreclosure. County governments have come to own much property via the assumption of ownership of property when it does not sell at public tax auction. HUD grants abound for the retrofitting of properties by individuals, developers and governments.

A tried and true method of getting great tax delinquent property deals is buying the inventory of property that the county has acquired via tax foreclosure, typically for the back tax amount. The county wishes to sell these parcels so that they can be put back onto the taxing rolls.

Landbanking as a government policy is very dangerous

Even more than it does already; the government will be able to “give” sweetheart deals to its supporters. Tax assessors will “give” reduced property rates to these sweethearts. Building code inspectors will be told to “go easy,” unofficially of course. Campaign contributions and kickbacks to officials will abound from developers seeking to put up swaths of cheap housing which will quickly crumble and turn into another disappointing ghetto. Ghettos will be made permanent because subsidized loans and grants will be used to populate the new housing.

A solution

Government can advertise its county owned property more so that the public knows that tax delinquent property is available for purchase. This will result in more mixed neighborhoods. Local governments can apply for more federal Community Development Block Grants so individual owners and small investors are able to clean up the dilapidated inventory. It is important that government does not put its traditional demands on the grant money, e.g. requiring the renting of a percentage of the housing to low income individuals, thus allowing the ability of a mixed population to move in providing gentrification.

Another solution

I put together a program whereby I sought out vacant lots and the abandoned and tax delinquent housing which I could get at extremely reduced prices. I then contacted church leaders, said that I would take their congregants through the house purchasing process, and give a referral fee to the church for providing a good prospect.

Let the market work

Coach Mitch’s “Ridiculously Simple System…” is made to order for this current economic environment. Everywhere we look there are sellers hoping to get out of their situation. A percentage of these sellers are desperate. They have no one to turn too. You are their only hope. Help them and help yourself.

See Coach Mitch’s “Ridiculously Simple System…” ™ for details.
Help someone else and help yourself also,