Land Bank FAQs

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Most people have never heard of a land bank. Here are answers to a few of the most common questions we get about what land banks can (and can't) do.

Table of Contents

What is a land bank?

Land banks are public entities 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, which vary state-by-state. These unique powers enable them to undertake these activities far more effectively and efficiently than other public or nonprofit entities. When thoughtfully executed, land banks can resolve some of the toughest barriers to returning land to productive use, helping to unlock the value of problem properties, and converting them into assets for community revitalization.

Does your community have a land bank? Find out by exploring our national land bank map!

How are land banks created?

Land banks are typically created as public entities by a local ordinance, though the community’s authority to do so is granted by state law (what we call “state-enabling legislation”). Sometimes a community may call their land bank a “land reutilization authority” or “land reutilization corporation” instead. Land banking programs may operate as a department of an existing entity, such as a redevelopment authority, a housing department, or a planning department.

Can land banks be formed in your state? Find out by turning on the “Enabling Legislation” layer on our national land bank map.

How many land banks are there?

As of 2023, there are over 300 land banks and land banking programs in operation throughout the country. Michigan, Ohio, New York, Pennsylvania, and Georgia have statewide land bank associations that represent their large numbers of active land banks. Check out our national land bank map to see where land banks exist.

What powers does a land bank have?

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’ sole purpose is to help reduce the harm from vacant, abandoned, and deteriorated properties and put those properties back to productive use aligned to community priorities. Land banks’ policies and practices must complement other tools like strategic code enforcement, smart planning and community development, and effective tax collection and enforcement.

Are land banks competing with the private market?

No. Generally, land banks receive properties that the private market has already rejected. Many properties left vacant and abandoned for years have accrued significant property tax debt and substantial repair costs that far exceed their worth on the private market. These legal and financial hurdles deter responsible private investors and can leave the properties in limbo for years.

A land bank is designed specifically to convert these properties to assets for neighbors and neighborhoods.

When does it make sense for a community to create 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 property 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

A land bank can help return vacant and problem properties to productive use, but it is just one tool that must connect with other local government efforts—including planning, delinquent property tax enforcement, strategic code enforcement, and resident-led efforts—to succeed.

What does a typical land bank look like?

In short, there is no “typical” land bank. While all land banks serve the same primary purpose, the 300+ land banks and land banking programs around the country are quite different depending on the geographies and economies they serve, how many properties they possess, their staff size, how they’re funded, their legal authority, and the needs of the communities they serve.

Some common traits successful land banks share are:

  • state laws enabling a streamlined property tax collection and foreclosure process that help land banks ensure properties end up in responsible ownership.
  • a clear, shared vision for how land will be used in the future, which the land bank can use to guide its acquisition and disposition decisions.
  • transparency and accountability in communication with residents on the land bank’s policies, practices, and priorities.
  • policies that engage residents and community stakeholders in the ownership, rehab, management, and development of vacant and abandoned properties.
  • strategies aligned with other tools and programs, like property tax collection, code enforcement, and redevelopment efforts

How are land banks funded?

Land banks are funded through a variety of sources, including general fund appropriations from local and county governments, federal and state grants, revenue from the sale of properties, and foundation grants.

Some state land bank laws include financing mechanisms. For example, in Michigan and New York, land banks can recapture 50 percent of the property taxes on properties returned to the tax rolls for five years. In Ohio, special fees imposed on delinquent property taxpayers provide a dedicated source of funding for land bank operations.

It is extremely costly to mitigate the harm to neighbors and neighborhoods from vacant and abandoned properties rejected by the private market. To succeed in their mission, the most important thing is for land banks to have consistent and dedicated funding.

How many properties do land banks have in their inventory at any given time?

Some land banks might have just a few properties, while others have thousands. It depends on a few factors:

  • Size of the community the land bank serves
  • Mission and goals of the land bank
  • Level of distress and disinvestment in a community
  • Age and resources of the land bank (e.g., some brand new land banks haven’t yet acquired any properties)
  • The land bank’s property acquisition process, strategy, and authority (e.g., whether state law grants the land bank the authority to pick and choose which properties to acquire out of tax foreclosure)

What kinds of properties do land banks acquire?

Most land bank acquisitions are vacant residential, tax-foreclosed properties. In addition to tax foreclosed parcels, land banks can acquire real estate owned (REO) properties, public land transfers, and private donations. Although most properties are typically vacant residential single-family homes and vacant lots, land banks also acquire multifamily dwellings, commercial, and industrial properties, and in rare cases, occupied properties. Some land banks have well-developed brownfields programs through which they acquire contaminated commercial or industrial properties in an effort to remediate and reutilize these properties.

What is the difference between a land bank and a land banking program?

Land banking programs are run by nonprofit or government entities that focus specifically on the acquisition, holding, and sale of vacant and abandoned properties. They exist primarily in states without enabling legislation and typically do not have the unique powers of legislatively enabled land banks but can still provide important support to transforming vacant properties.

What is the difference between a land bank and a redevelopment authority?

Some states have passed legislation that grants redevelopment authorities many of the same powers as land banks. However, the mission and legal powers of a redevelopment authority and a land bank are generally different.

Land banks generally have more flexible disposition policies (i.e., how they sell or transfer property) than a redevelopment authority. However, unlike many redevelopment authorities, land banks do not have the power of eminent domain nor the power to tax.

In terms of mission, land banks are focused on acquiring, stabilizing, and returning problem properties to productive use aligned with community goals. A redevelopment authority, however, typically focuses on properties with near-term redevelopment potential and on large-scale development projects that align with highly visible and long-term economic development goals.

What is the difference between a land bank, a community land trust, and a conservation land trust?

Land banks and land trusts—both community land trusts and conservation land trusts—are different yet complimentary.

A conservation land trust is a community-based nonprofit organization that works to permanently conserve land that has natural, recreational, scenic, historical, or agricultural value. Conservation land trusts can acquire and hold land and may also work with private landowners to acquire conservation easements. Land trusts also manage or restore land once it has been conserved. Land trusts are also called land conservancies.

A community land trust is a nonprofit organization governed by community land trust residents, community residents, and nonprofit and public representatives, that provides permanent community control of land and affordable housing.

A few key distinguishing features between land banks and land trusts are:

  • Structure: Land banks are public entities whereas conservation and community land trusts are nonprofit organizations.
  • Tenure of Ownership: While land banks can hold properties long term, they generally only hold properties for a short time, whereas community land trusts perpetually hold land. Conservation land trusts will either acquire land or conservation easements and/or steward and manage the land.
  • Property Disposition: Land banks can sell properties for a flexible price to a wide range of end users, consistent with community goals, whereas community land trusts can only sell properties to income-qualified buyer. If disposing of properties, conservation land trusts generally place restrictive easements in place prior to any disposition activity to preserve the land in its natural state.

Land banks and CLTs can leverage their unique features to work in concert and unlock a pipeline of quality affordable housing for current and future generations.

To learn more about the differences between land banks and land trusts and how these entities can partner, click here »

To find out if you have a land bank and CLT in your community, click here »

Where can I learn more about land banks?

To learn more about land banks, check out the following resources:

And to dive even deeper and explore case studies about land banks in specific states and communities, visit our publications library.