Ohio land bank bill now law

Ohio Governor Ted Strickland yesterday signed Substitute House Bill 313 (Sub H.B. 313), giving land banking authority to 41 counties.

The legislation allows counties with more than 60,000 residents to form and operate county-wide non-profit land banks, providing a comprehensive regional planning tool to address foreclosures, abandonment, and blight.

Ohio had 89,053 foreclosures in 2009, a 3.8 percent increase over 2008 and its fourteenth annual increase.

"With this bill, we are giving dozens of Ohio counties a vital new tool to proactively acquire abandoned properties," Strickland said. "In the hands of local government, these homes can be rehabbed, redeveloped, or if they're too far gone, demolished with the land held for future development. Land banks have been credited with increasing real estate equity, improving the local economy, and strengthening neighborhood stability."

These land banks, also called County Land Reutilization Corporations (CLRC), allow counties to issue bonds to buy properties' outstanding tax liens from the county treasurer. They could then acquire the properties with a clear title. Program funding would be replenished through penalties and interest on delinquent taxes and assessments, the resale of properties to qualified buyers, and loans, bonds, and grants.

To create a CLRP, each county's commissioner would be required to pass a resolution directing its formation. The county treasurer would then incorporate it and form a board, which would draft the rules of operation for approval by the commissioners.


New to the game

Until this bill, only Cuyahoga County has had the authority to have a county-wide land bank. Since its formation in April 2009, its land bank has acquired – or is in the process of acquiring – more than 170 vacant properties.

Now, both Montgomery County (Dayton) and Lucas County (Toledo) are exploring the formation of CLRPs.

"I am thrilled that the Ohio Legislature has overwhelmingly voted to expand land banking authority so that communities like ours have another tool available to revitalize neighborhoods," said Montgomery County Treasurer Carolyn Rice. "Land banking initiatives will enable our cities and suburbs to implement local solutions for finding new, productive uses for abandoned and deteriorating properties."

Lucas County Treasurer Wade Kapszukiewicz agreed.

"This program will allow our community to take control of its own destiny, instead of being held hostage by land speculators or Wall Street banks," he said. "It will be an important weapon in the battle to stabilize and restore our neighborhoods, and it allows us to fight urban blight without having to raise taxes."


Will Hamilton County follow?

Assistant City Solicitor Paula Boggs-Muething and Property Code Enforcement Division Manager Ed Cunningham were both in Columbus for the bill's signing.

At a roundtable discussion on March 30, both expressed concerns that Hamilton County Treasurer Robert Goering may not be on board.

Dawn Larzelere, Associate Director of smart growth policy and advocacy group Greater Ohio, has heard from both Boggs-Muething and Cunningham and anticipates that there will be a learning curve due to the bill's complicated scope.

"From our view point, this now becomes an educational process on behalf of officials in Hamilton County and other counties in Ohio that are unfamiliar with this legislation," she says. "Both proponents and opponents need to familiarize themselves with the mechanisms in the bill and customize them to make it work best for their county, as there is not a county in the state that has not been affected in some way by the foreclosure crisis and resulting vacant and abandoned property fallout."

Hamilton County Treasurer Robert Goering could not be reached for comment. Greater Ohio contributed to this report.

Previous reading on BC:
Cincinnati RoundTable focuses on land banking, housing court (3/31/10)
Ohio county land banking passes House committee (12/14/09)
28 Ohio counties could acquire land banking powers (10/29/09)
Dohoney: Most OTRF preservation recommendations 'probably unfeasible' (8/5/09)
Cincinnati code enforcement inspectors handling 53 new cases a month (5/29/08)