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What is a Land Bank?

June 15, 2023

A person in a reflective orange vest mows a vacant lot.

Come to the Reclaiming Vacant Properties Conference October 9-11 in St. Louis

Land banks across the country advance equitable, inclusive neighborhoods and resilient communities. But what is a land bank? How does a land bank work? And how do you know if a land bank is the right tool for your community? 

A land bank is a public entity with unique powers to put vacant, abandoned, and deteriorated properties back to productive use according to community goals. A land bank’s primary purpose is to acquire properties that some call “blighted” and temporarily hold and take care of them until they can be transferred to new, responsible owners. State laws give land banks their unique powers. While these powers vary state to state, ideally land banks can:  

  • acquire tax-foreclosed property cost-effectively 
  • flexibly sell property to a responsible buyer or developer, driven not by the highest price but by the outcome that most closely aligns with community goals
  • extinguish liens and clear title 
  • hold property tax-exempt 
  • generate and collect revenue from delinquent property tax fees, property tax recapture, or other funding mechanisms 

Land banks vs. land banking programs vs. land trusts 

Land banks with the unique powers described above can only be created through a state law (what we call “state-enabling legislation”). Sometimes a municipality may call their land bank a “land reutilization authority,” “land reutilization council,” or “redevelopment authority” instead.  

Land banking programs, on the other hand, exist in states that don’t have state-enabling legislation, which limits their powers and utility. They may be run by governmental or nonprofit entities.  

There are more than 300 land banks and land banking programs across the country—check out our National Land Bank Map

Community land trusts and conservation land trusts are not the same as a land bank. A community land trust is a nonprofit that owns and provides permanent community control of land and affordable housing through “ground leases.” We wrote about how land banks and community land trusts can work together. A conservation land trust is a nonprofit that owns land or conservation easements for open space purposes. 

What does a land bank do with the properties it acquires? 

Community priorities and state laws determine what land banks can do with properties. Some examples of what a land bank can do include:  

  • maintaining vacant structures that can be restored and demolishing the ones that can’t 
  • assembling property for future reuse 
  • turning tax-foreclosed properties into housing for all income levels 
  • facilitating commercial and industrial property reuse 
  • transforming vacant land into parks, gardens, and other community spaces 

What impacts do land banks have on a community? 

Stabilize property values: Vacant, abandoned, and deteriorated properties lower nearby property values, ultimately hurting individuals’ equity and wealth, real estate markets, and overall municipal revenue. Land banks can intervene to address these problem properties to interrupt decline and stabilize neighborhood property values. 

Increase municipal revenue: Problem properties are often delinquent on taxes, which reduces municipal revenue that funds critical public services like schools and roads. Land bank interventions break the cycle of foreclosure so properties can get back on the tax rolls. 

Leverage investment for economic growth: With the support of public, philanthropic, and private dollars, land banks can transform properties—from single-family home rehabs to large sites—and offset costs so the property can still meet the established community goals. These projects fuel more economic growth and investment in the neighborhood. 

Decrease municipal service expenses: Vacant and abandoned properties drain city services, e.g., through code enforcement, fire, and police calls. By taking care of and eventually transferring a property to a new owner, land banks help reduce municipal service costs. 

Increase health and wellbeing: Addressing problem properties can help reduce crime and improve personal and public health. 

Improve quality of life: When a land bank puts a problem property back to use, it increases civic engagement, improves the perception of a neighborhood, and makes residents feel proud of where they live and more optimistic about where their neighborhood is going. 

Further racial equity and social justice: Land banks can help build wealth in historically disinvested neighborhoods. Increasingly, land banks across the country are shaping contracting and purchasing policies to support minority- and women-owned businesses, uplifting cultural heritage through creative placemaking, working with organizations that focus on previously redlined neighborhoods, and committing resources to address the homeownership rate gap in communities of color. 

Promote lasting affordability: Many land banks are looking for ways to use vacant and abandoned properties to address housing affordability. Some land banks are partnering with community land trusts while others apply deed restrictions to create permanent affordable housing. 

Support climate resiliency: Extreme weather events are becoming more common and intense due to climate change. Some land banks are looking for ways to help with disaster recovery and climate resilience, for example, by creating more green space to reduce heat and stormwater runoff, and by addressing storm-damaged properties. 

Does every community need a land bank? 

A land bank isn’t the best tool for every community. Generally, land banks work best in places dealing with: 

  • large inventories of vacant property, often with little to no market value and/or significant delinquent taxes and liens 
  • inflexible public policies dictating the sale of public property, limiting the ability to be strategic and nimble  
  • many properties with title problems 
  • unpredictable and harmful outcomes from tax auctions 

Download our land bank fact sheets: Overview, Land Bank Impacts, Land Banks and Community Land Trusts

The National Land Bank Network at the Center for Community Progress connects land bank leaders to the tools, networks, and resources they need to return vacant, abandoned, and deteriorated properties to productive use. As the first membership-based community of practice for the field of land banking, NLBN supports the over 300 land banks and land banking programs throughout the United States with in-person and online convening, research, technical assistance, and equity-focused education. 

If you’re struggling with vacant, abandoned, and deteriorated properties in your community, check out our free online resources, webinars, and publications. We also provide customized, expert guidance to state and local governments to assess the state of vacant properties in your community and recommend policy and practice solutions for equitable neighborhood revitalization.  

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