Governor Corbett signs state’s first-ever land bank legislation
With the help of the Community Progress team, Pennsylvania municipalities are newly empowered to confront the long-standing scourge of vacant properties and blight. On October 24, 2012, Governor Tom Corbett signed legislation that allows municipalities to create land banks, potent economic development tools. House Bill 1682, also known as the Land Bank Act, is the first legislation of its kind for Pennsylvania and represents a major victory for advocates and for Representative John Taylor who headed the legislative effort.
For more than two years, Community Progress has provided expertise and worked with Reps. Chris Ross, who chairs the House Urban Affairs Committee, and Taylor and Senator Gene Yaw to expand legislators’ understanding of best practices for and the importance of land banking.
Pennsylvania has struggled for years to tackle a growing vacant property issue. The problem is vast: there are approximately 300,000 vacant properties in the state. In fact, as reported by the Philadelphia Inquirer, that city has more than 40,000 vacant properties, a quarter of which are city-owned. A 2010 report by the Philadelphia Association of Community Development Corporations and the Philadelphia Redevelopment Authority found that holding and maintaining those properties costs city taxpayers $20 million a year.
“It’s a wonderful tool for Philadelphia,” said Rep. Taylor, who represents part of Philadelphia County. “If you don’t pay your taxes [now], nothing much happens. This will incentivize the city to move on properties quicker and…dispose of them in a timely manner. You can change entire blocks at once now.”
The Land Bank Act will allow Pennsylvania communities to address the growing pattern of vacancy and abandonment in urban, suburban and rural areas of the state. Land banks are local entities that can acquire vacant and abandoned properties and direct their subsequent redevelopment and reuse. Once repurposed, properties typically return to the city’s tax rolls – important for cities struggling with lower revenues in the wake of the economic crisis. Land banks from New York to Minnesota are transforming blight in disinvested neighborhoods into engines of economic development. Where the real estate market is already strong, land banks can advance the public good by creating affordable housing or other public assets.
The legislation promotes greater regional collaboration by allowing cities and counties to work together in the formation of land banks in order to address the pattern of vacancy and blight on a broad scale. Municipalities are also newly empowered to enact internal financing mechanisms for their land banks, including the ability to retain a portion of the new tax revenue from properties returned to the tax rolls. The act also allows for greater and more flexible access to constructively address underwater properties.
“Pennsylvania has taken a major step forward to address the problems of blighted, abandoned and tax delinquent properties plaguing many of our communities,” Senator Yaw said. “The new state law…will reverse the trend of declining housing infrastructure, lower property values and tax bases, while at the same time creating community assets. I commend the many municipalities throughout the state who have voiced their support for this legislative measure, the Housing Alliance of Pennsylvania for their work in promoting it, my colleagues on both sides of the aisle for voting in favor of it and Governor Corbett for signing it into law.”
Frank Alexander and Sara Toering of Community Progress and attorney Leslie Powell drafted the Pennsylvania legislation, incorporating best practices and elements from years of work in the field. Municipal and professional associations helped the committee to customize the draft to fit Pennsylvania, which is second, behind Illinois, in the number of local government units it has.
“Pennsylvania is a perfect example of a place that can benefit greatly from land banks and I congratulate the organizations, advocates and officials on the enactment of this important legislation,” said Amy Hovey, Interim President and CEO of Community Progress. “As the economy continues to recover nationwide, municipalities are searching for ways to plan for a sound future and create new centers of economic development. Land banking provides that opportunity by empowering local governments to help re-set the commercial and residential real estate market.”
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The Center for Community Progress works to create vibrant communities and improve the overall economic and social wellbeing of cities and towns in America through the reuse of vacant, abandoned and problem properties. We serve as the national resource for policy, information, capacity building and training regarding the redevelopment of vacant, abandoned and problem properties; we partner with federal, state and local officials and non-profit organizations that work to reposition these properties; we collaborate with experts on research that contributes to the growing body of public policy on successful reuse; and we serve as the leading national advocacy organization on effective reuse strategies. To learn, visit communityprogress.org.