Are Land Banks The Governments way of geeting involved in Real Estate investing?.....
There are 170 communities now operating formal land bank programs across the country as of date in the United States. There are 13 states with Land Banks, the states of Michigan, Ohio and New York currently have the greatest number of active land banks.
Land banks were started are designed to acquire and maintain, manage, and repurpose vacant, abandoned, and foreclosed properties –the worst abandoned houses, forgotten buildings, and empty lots then transfer them back to responsible ownership and productive use in accordance with local land use goals and priorities, creating a more efficient and effective system to eliminate blight.
But from my observation the operations are seeming to change with the Lucas county Land Bank of my home town Toledo, Oh where I invest. I first became familiar with the Land Bank in 2009 as its introduction year to Lucas county at an annual Forfiet Land Auction which I have attend every year since 2007. At that auction it was told to the general public that the Land Bank will be a great thing for the public and was presented as such, but year by year the annual forfieted auction I attended and brought 5-10 properties from for pennies on the dollar on a yearly bases has abruptly change year by year adding new rules and regulations to prevent some investors and the general public from attending and to also favor the Land Bank position to have first dibs on properties before they are even presented to the public auction. Properties of which are not the " the worst abandoned houses, forgotten buildings, and empty lots" blighted properties they where initially formed to help eliminate but very decent investment properties in A and B-class neighborhoods. This cherry picking of good properties among other things outside of auctions and into their daily operations such as ( Heavy-handedness on owners with good investment properties behind on taxes or in delinquent courts to forfiet over their properties to the Land Bank to avoid penalties) really concerns me not only as a investor but as a citizens. Its not only here in Toledo, Oh where these tactics are taking place.... investors in Kent County and the City of Grand Rapids filled a lawsuit against their local Land Bank in 2015 for claims of cherry picking prime properties before they were made available for the public which was later thrown out of court.
It seems to me that that Land Banks are nothing more than a cover up Government to get involved in real estate investing (my opinion)
agreed just had this same discussion with someone about rochester,ny. Land bank doesnt even buy or touch the worst areas yet they push it like their helping in those areas but arent. Also theres definately profits being made and going into someones pockets when its suppose to run as a non for profit.
Land banks are good for one thing: redeveloping property that is not economically feasible for an investor--i.e., the numbers don't work. Just because a property has been condemned does not make it necessarily a problem for an investor--though land banks will tell you it does. A problem with the land bank laws in Michigan is basically that any property foreclosed on for taxes or that has been condemned is blighted and land bank worthy. Land banks will use these reasons to convince the municipalities to turn the property over to them for little or no cost. Municipalities do this for one reason only: To prevent investors (those terrible absentee landlords (sarcasm intended)) from buying and turning them into slums. For tax foreclosed properties, selling/giving properties to a land bank is almost always a lose/lose scenario for the county...especially in a tight real estate market.
Land banks that deal in properties that are investment worthy are simply acting as private investors with charitable and/or public funds.
I️ totally agree. Every week I️ drive by my rental properties in SE Grand Rapids and the same Land Bank-owned homes are sitting there rotting away. I️ see some also that the land bank sold to someone already that have not had any of the “required” work done to them. Again, rotting away. I️ really wish I️ could buy some of them for a price that actually worked with the amount of rehab they need. They absolutely do “cherry-pick” houses and then mark the prices up and watch us local-investors clamor for scraps in the hot GR market. The circumstances no longer exist to justify a land bank. And who the heck is making all that $ off them, anyway?
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