Progress Points: Michigan Land Banks

Author(s): Center for Community Progress

Though diverse in structure, inventory size, and operations, land banks across the country fundamentally all serve the same purpose: acquire vacant properties and return them to productive use.

In Michigan, land banks are quasi-governmental entities, created pursuant to Michigan’s Land Bank Fast Track Act (Public Act 258 of 2003), and represent rural and urban communities across the state. They have been a vehicle for supporting community development by maintaining or demolishing vacant structures, assembling property for future reuse, turning problem properties into quality housing for all income levels, facilitating commercial and industrial property redevelopment, and working with communities to transform vacant land into parks, gardens, and other community spaces. Michigan land banks have the authority to:

• Acquire property cost-effectively through a variety of mechanisms, primarily through the tax foreclosure process
• Extinguish liens and clear title efficiently through bulk quiet title
• Hold property tax-exempt
• Flexibly sell property to a responsible buyer and/or developer, driven not by highest price but to ensure desired community outcomes
• Generate and collect revenue from property tax capture, tax increment financing, and other funding mechanisms

Land Bank Impact

Increase property values: Land banks facilitate the repair, rehab, and reuse of vacant, abandoned, and deteriorated (VAD) properties, helping reverse the negative impacts of those properties, on the community and value of nearby homes.

Increase municipal revenue: Land banks break the cycle of property tax foreclosure and place property back on the tax rolls, which leads to greater municipal revenue.

Leverage investment for economic growth: Land banks have been able to bring together private, public, and philanthropic funding to lead interventions ranging from small residential rehabilitation to large-scale catalytic projects, creating new job opportunities and growing the regional economy.

Decrease municipal service expenses: VAD properties drain municipal services, such as code enforcement, and fire and police response. When land banks remove blighted structures and steward properties, those municipal service costs decrease.

Improve public health and quality of life: Addressing VAD properties through land banks can lead to decreases in crime and improve wellbeing and personal and public health.

Create new housing opportunities: Land banks play a significant role in housing development. By rehabilitating vacant homes, building infill housing on underutilized land, and facilitating multi-family redevelopment, land banks help meet the housing needs of all income levels.

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