Approaches to Rural Property Vacancy in Law and Policy

This is an excerpt of Chapter 8 of Tackling Vacancy and Abandonment: Strategies and Impacts After the Great Recession, jointly produced by the Center for Community Progress, the Federal Reserve Bank of Atlanta, and the Federal Reserve Bank of Cleveland. It has been lightly edited and condensed for the web. In this chapter, Ann M. Eisenberg, associate professor of law at the University of South Carolina School of Law, discusses the unique challenges and approaches to addressing vacancy in rural communities. Click here to download the full chapter and read more insights on tackling vacancy and abandonment from the nation’s leading experts.

The United States used to be an overwhelmingly rural country. But a diverse set of factors have driven a relatively rapid, dramatic process of urbanization during the 20th century. Despite modern urbanization trends, rural America remains heavily populated when viewed in absolute terms.

Forty-six million people, roughly one-seventh of the national population, live in rural areas. Approximately 72 percent of the land mass of the United States is designated as rural. Thus, although the rural proportion of the population has decreased, there is still a sizable rural population, the needs of which warrant attention.

Today, rural regions have been hit hard by high rates of unemployment and the opioid epidemic and have the highest levels of concentrated chronic poverty. As rural areas struggle, they are often in the process of losing the capacity to address their struggles, as tax revenues decline, and the population’s suffering is compounded. Building code enforcement and other measures to prevent and address property vacancy often seem like the least of the community’s worries.

Thus, a realistic, creative discussion of rural property vacancy should take these conditions into account. Rural property vacancy needs to be viewed as a unique phenomenon, rather than a mere geographic variation or smaller-scale version of urban property vacancy.

Vacant properties are, by and large, a local government issue, and urban and rural local governments are fundamentally different in size. Rural property vacancy is often tackled by a handful of volunteers with other jobs and limited expertise. Many rural communities lack budgets, expertise, community groups, and other resources to address rural vacancy.

In addition to smaller local government capacities, the economics of rural land and property markets are different from urban ones. In contrast to urban land, rural land is often a low-value burden rather than a commodity. Rural localities often work hard to attract development by limiting land-use controls to accommodate developers and make otherwise unattractive land as cheap as possible. Thus, a vacant property in an urban center—even a struggling one—is more likely to see reuse than a vacant property in a remote, sprawling locality.

Since rural communities tackling their problem properties may well be attempting to “do something with nothing,” their approaches cannot be overly resource intensive. Municipal land banks, public nuisance lawsuits, condemnation, and other aggressive local government processes may be more suited to the urban context where more resources are available to public actors. Processes that involve a limited amount of investment by the local government, that are neither too complex nor too costly, and consider limited regional markets are likelier to succeed.

Three unique approaches are generally considered for their potential to address rural property vacancy in law and policy: creating regional land banks, anticipating end uses to streamline processes and strategies, and using creative code enforcement strategies.

Regional land banks
The limited literature on rural property vacancy has reached a consensus that rural communities stand to benefit more from regional land banks specifically. Municipal land banks are often not a realistic option in the rural context. Land banks require public or quasi-public resources to acquire, rehabilitate, and redistribute properties—resources that many municipalities lack. In most states, land banks also require enabling state legislation to be created. County-level or regional land banks may make more sense than municipal ones for many rural communities because they open the door to joint uses of resources.

Since local rural governments often lack the resources of larger municipalities, viewing rural property vacancy through a regional lens makes sense for two main reasons. First, the scope of the rural property vacancy problem can be better understood. A handful of problem properties in one small town might seem like a small problem not warranting intervention. But expanding the lens of assessment—revealing proliferations of vacancy regionally—could help establish a more holistic view. Second, regional initiatives could allow local governments to pool funds or draw on existing regional entities, such as planning or economic development agencies, which may have more resources and expertise to pursue land banking activities.

Another promise regional land banks hold for rural communities is the creation of more robust markets for acquiring and redistributing properties. By expanding opportunities for land banks to acquire diverse properties in a dispersed area, a land bank has a greater chance of selling any given property to a new user, helping to overcome limited buyer markets in specific rural localities. Increased opportunities for sales can also help open revenue streams to the entity, meaning that sales in one area could potentially help finance property remediation efforts elsewhere.

The “market-anticipatory” approach
While an urban vacant property may have interested investors even if it is unattractive in some way, a vacant rural property may be more likely to simply sit, unused and burdensome, forever. Similarly, while urban local governments may be able to invest some of their own time and resources in addressing a vacant property with the anticipation that a future tenant or owner will put the property into productive use, rural communities are in less of a position to start down a resource-intensive path with the mere hope of a positive outcome.

One tactic rural communities have used with some success is the “market anticipatory” approach. This involves deciding on the new reuse and tenant for a property in question first and then “identify[ing] the path of least resistance” and the means to removing the barriers to putting the property into that tenant’s hands. The first step is a diagnostic to determine the highest value use for the property. The next step is finding an appropriate tenant or new owner. The third is working to reduce as much as possible the transaction costs of putting the property into the new owner’s hands.

This principle is an important one for reshaping rural processes in tackling rural property vacancy: rather than starting the process without a view to the end result, rural local governments can determine the end result and then seek to streamline their processes to arrive there.
 
Creative code enforcement strategies
Rural communities may also benefit from using their limited resources more creatively, such as sharing a code enforcement officer with a neighboring town. This allows, for example, using informal inspections as a first step, and triggering more formal processes only as a last resort.

However, state legislation on intergovernmental agreements (IGAs) may be a potential legal barrier to rural communities. IGAs are often the necessary avenue for a formal resource sharing agreement between two municipalities, despite difficult statutory requirements for small rural localities to navigate, especially if the closest potential collaborator is located across state lines. States seeking to empower rural localities to enter IGAs could provide technical assistance for doing so, expand local government contracting authorities, and simplify processes for entering IGAs.

Code enforcement can also encounter unique challenges in rural communities. Residents are more likely to know each other than in cities, making actual enforcement of the code more interpersonally and politically uncomfortable and stressful. There may be less of an understanding of the existence or importance of the building code. Rural politics may also be more likely to involve skepticism of government involvement in property matters.

A few context-specific strategies for improving code enforcement efforts hold further promise for rural communities. Officials can emphasize the benefits of code compliance to their communities, rather than the punishment for noncompliance. Enforcement can also be shaped as a community-level effort rather than a task limited to an enforcement officer.

Rural communities have unique needs for preventing and addressing vacant and dilapidated properties. Population sparseness and limited local markets and local government resources all shape the landscape for practitioners and officials seeking to take on this problem. Though approaches that hold promise for rural communities are emerging, more research is necessary to understand the prevalence of and successful strategies to address rural property vacancy.