Communities across the state are facing a major challenge: Vacant, Abandoned, and Deteriorated (VAD) or ‘blight’ properties. These plots often contain necessary infrastructure for development and are located close to community focal points, but cities have no mechanism of turning this property with great potential into a viable development. Land Banks and Community Land Trusts can help alleviate this problem.
The Statewide Blight Problem
Blight or VAD properties often feature dilapidated structures and overgrown yards, an unsightly and potentially dangerous burden on many municipalities. This problem has quickly become a drain on cities across the country. Duke McLarty, executive director of Groundwork, noted this as a recurring issue raised by residents and elected leaders from municipalities across the state. During the recent nine-city listening tour, Groundwork engaged with hundreds of residents who reiterated the severity of this issue. In cities with limited land and infrastructure, these homes are an unsightly financial burden that municipalities have little means to rehabilitate.
Maintenance and daily upkeep on these lots is also costly and time-consuming to the municipality. McLarty notes that cities like Pine Bluff mow thousands of vacant lots at least 3 times per year. These blighted properties are a drain on areas where infrastructure already exists, tying up land that could otherwise be used for development.
“Our local officials, our municipal officials, [and] our county officials have very few tools at their disposal to bring these properties back into useful production,” said McLarty. “In many instances, investments have already been made in infrastructure. These are often lots in the downtowns of these communities, and there's no way for the local municipality to play an active role in bringing that property back to life.”
Mayor Josh Agee of Paragould reiterated these sentiments. Paragould has condemned more than 500 properties in the last six years, effectively reducing the number of dangerous, dilapidated structures. They were left with hundreds of empty lots and piles of rubble.
“The number one thing that I think cities are dealing with is blight,” said Agee. “When the Municipal League has trainings on code enforcement and blight, the room is always packed. So, we understand that this is a problem statewide.” This is where land banks and community land trust come in.
Land banks vs. a Community Land Trusts (CLTs)
Though they share many similarities, it is important to understand the differences between a land bank and a community land trust. James Yelen, Director of Technical Assistance for Grounded Solutions Network, defines a land bank as a public or non-profit designated agency that acquires, holds, and revitalizes properties that have fallen into disrepair or tax delinquency. They do not hold land in perpetuity, but serve as a means of re-energizing defunct property that is then sold.
Their primary purpose is to buy VAD property, ensure that the title is cleared and the lot itself is maintained, and hold the properties in a tax-exempt status until their sale can be negotiated.
These agencies operate solely on the front end of the revitalization process, distinguishing them from the role of Community Land Trusts.
A community land trust features a non-profit or municipal entity that takes ownership of land in perpetuity, maintaining this ownership even after a buyer has taken residence of the home on that land. This model is bound by a ground lease, which contains resale restrictions ensuring the next buyer also gets an affordable price. The land trust model emerged during the civil rights movement in Albany, Georgia. Here, 5,000 acres of farmland became the first community land trust, a direct response to the Jim Crow-era land exclusion and unjust sharecropping arrangements facing black farmers. The trust was based on other international land use models, and soon spread from rural origins to urban, suburban, and rural communities nationwide.
A modern example of this mechanism comes out of Chaffee County, Colorado, where local tourism was significantly driving up housing costs that residents’ service-sector wages were unable to meet. The Chaffee Housing Trust used modular construction to alleviate a post-recession contractor shortage, producing more than 50 homes over two decades.
In the community land trust model, homeowners still build equity, get property tax benefits, and have the ability to pass homes down to heirs, but the home is restricted to sale through a third party. This ensures that affordability lasts through generations, resulting in lower foreclosure rates and lower moving rates when compared to a rental model. Community Land Trusts also encourage resident engagement and interaction, bringing residents together in shared spaces like community gardens or urban agricultural spaces.
Simply put, land banks function as their name suggests, as a repository for underutilized land that is then refreshed and both the land and any structures upon it are sold to a new owner. Adversely, community land trusts maintain ownership of a plot of land, selling or renting out the structures that stand on it with the stipulation that any future sales of the property must pass through the trust to ensure continuous affordability.
How Land Banks and CLTs Work Together
Though each operates independently, the two mechanisms can work together in a continuum. Once a land bank has purchased and revitalized a dilapidated property, it can then be sold to a land trust at a greatly discounted rate. In this way, land banks can serve as a pipeline of land for community land trusts, alleviating one of their biggest challenges. However, each can function on their own without the other complimenting. This function reveals the shared intention behind both, assisting municipalities in revitalizing properties that have become hazardous and financially draining to the community back into viable, affordable living spaces.
Yelen references an urban example of this continuum out of Atlanta, Georgia, wherein the Metro Atlanta Land Bank had excess, underutilized acquisitions and the Atlanta Land Trust needed parcels for starter home development. The land trust’s solution: partner with the land bank for a pipeline of below-market land, in exchange for their commitment to build homes with lasting affordability.
The two entities entered into a memorandum of understanding (MOU), promising to assist one another in developing affordable living spaces for Atlanta residents from previously dilapidated properties. The pilot program, made up of 14 parcels of land, was successful, leading to a formalized and ongoing partnership and discounted land policy.
This continuum highlights the importance of both land banks and community land trusts in promoting property development for affordable housing.
Case study: Paragould’s Lank Bank
An example that is a bit closer to home, though, is that of Paragould’s Land Bank, spearheaded by Mayor Josh Agee. After taking office in 2021, Mayor Agee and his staff began work on the town’s first strategic plan in 20 years. After much resident-led discussion, community redevelopment became central to this plan.
Agee had seen the impact of land banks on cities he had visited in Louisiana and Kentucky, hoping to utilize that same mechanism in Paragould with one simple mission: to stabilize and revitalize abandoned properties and to bring neighborhoods back to life. “Our idea was to go into these neighborhoods and help the landowners who were still in these areas to improve their property values and to make their neighborhoods what they once were,” said Agee. He took this idea to the city council, who passed an ordinance establishing the land bank and its governing commission whose members represent the fields of banking, construction, city leadership, municipal utilities, and law. Also integral to the success of the land bank are Land Bank CEO and Director of Economic Development Allison Hestand and Grant Administrator and Land Bank Secretary/Treasurer Tara Sexton.
After establishing the land bank, Agee created three overlay districts, or areas where an extra layer of zoning rules can be applied, based on the initial community feedback. These zones, the North End, Labor Park, and Midtown, were dubbed ‘legacy neighborhoods,” reflecting their historic status. Work soon began to preserve and uplift their individual communities.
During this process, 48 vacant lots were identified in the North End district alone. Mayor Agee wanted to ensure that the revitalization that Paragould’s downtown had experienced could be spread to this nearby neighborhood integral to the city’s history and spirit. The team began focusing on bulk-purchasing lots in this district.
The team then turned around and auctioned these lots off to developers for an average price of $9,000, a significant discount in a city where similar plots often sell for $35,000 to $50,000.
Agee made it a priority to invest in his community, noting that “you can tell where a city’s heart is by where its budget lands.”
Reaching Returns
This investment has proven to be incredibly fruitful for Agee and his growing city. As Paragould averages three new citizens every two days, these vacant lots with pre-existing infrastructure became the perfect means of affordable housing development. The Land Bank not only expanded housing options for young families and aspiring homeowners, but provided significant financial support to the city’s school district. Lots that were previously bringing in only $45 in tax revenue a year, are now bringing in more than $1,200 each, an additional $50,000 per year to Paragould School District. “That’s the salary of a teacher,” Agee noted.
These tax returns offset the out of pocket costs associated with the land bank, which Agee estimates to be less than $200,000. The cost associated with development, including auction fees and infrastructure upgrades, seemed small in comparison to the immense improvements the bank was able to achieve: the development of more than 50 new homes across the city.
Greater still than tax returns or limited monetary investments, though, were the quality of life improvements that residents experienced thanks to the work of the Paragould Land Bank.
“We have a saying in Paragould that we do things with people, not to people,” said Agee.
This emphasis on collaboration has returned a sense of pride and community to neighborhoods across the city, where former renters have been empowered to buy their first home and young families can feel excited to raise children. “You are seeing a lot of community pride come back into this area,” said Agee.
Lessons for other communities
This example can serve as a model for other communities looking to revitalize aging properties, turning what was once a siphon for community resources into a viable housing option for a member of the community. For cities and towns looking to establish a land bank, Paragould’s Tara Sexton coined the ‘Three Ps’ Parcels, Proximity, and Potential are all crucial pieces of the success of the Paragould Land Bank.
Mayor Agee was able to dispel initial skepticism about a more piecemeal approach through focusing his development efforts in one area, buying up many parcels at once to ensure the greatest impact. “Instead of one home going up at $150,000, what if we had 20?” he posed. “Then you’ve really started to change the momentum of an entire neighborhood.”
“You’ve got buy-in from the land owners who are there, because they see all the new things that are coming to an area that really has been forgotten in a lot of ways,” he added.
This also allows multiple developers to invest in the project, bringing their individual expertise into an area with existing infrastructure and proximity to other focal points in a city. The number of lots and their location leads into that last ‘P’ that communities should bear in mind when it comes to creating a successful land bank: potential. These plots of land and the neighborhood they make up had significant potential, like existing infrastructure and proximity to nearby parks and schools. All it takes is a little motivation and a dedicated team, like Mayor Agee and his staff, to revitalize these areas back into their former glory. Similarly, Yelen notes the essential elements of establishing a successful community land trust: a reliable funding source, favorable local policy, and a governing organization with long-term stewardship capacity.
“The first ingredient of all is, is there a willingness?” he adds. “Is there genuine excitement or enthusiasm and can you build the coalition to move all these different pieces?”
