Land Bank

The Pennsylvania Land Bank Resource Guide defines land banks as entities that

“establish the use of blighted properties according to local goals, priorities, and plans. They are transparent and accountable to residents. And they can be instrumental in establishing a comprehensive approach to blight that most communities lack.”

Vacant, abandoned, and tax-delinquent properties undermine the fabric of Pennsylvania communities, impose significant costs on local governments, destabilize neighborhoods, and erode property values. Many are located in cities and towns that have suffered significant losses of people, jobs, and economic opportunities over several decades. To halt further decline and spur community reinvestment, we know that we must eliminate the blight that vacant, neglected properties cause and convert them into community assets.

Repurposing vacant, abandoned, and tax-delinquent properties and returning them to the tax rolls is not easy. Fragmented ownership, clouded titles, and tax liens create obstacles. In weak real estate markets, improving properties or even keeping them up to code is not always economically feasible. As a property deteriorates, code violations ensue and liens mount, often exceeding the value of the property and rendering it dead to the market. Tax-delinquent properties cycle through a system of sales and auctions that prioritize revenue over their highest and best use or community will.

The most significant new law is the Pennsylvania Land Bank Act.3 Enacted in 2012, the act authorizes the creation of land banks, which are public agencies whose mission is to return problem properties to productive use.

Land banks are a proven tool by which local and county governments can address problem properties. Their new availability in Pennsylvania is a gamechanger. A land bank has significant powers, including the ability to extinguish liens (with the approval of the taxing bodies); clear title; hold a property tax-exempt and do so without amassing additional liens; and sell, transfer, lease, or mortgage property for any amount or form of consideration as well as for any future use that it determines to be appropriate. The powers go far beyond what a redevelopment authority can do.

Pennsylvania land banks can help municipalities more effectively put blighted properties back into productive use by acting as start-to-finish hubs. The law creates a framework for positioning a land bank as the single entity to take charge of addressing the problem of blighted properties and to serve as a center for planning and program coordination across government departments and with other public agencies whose mission includes blight remediation and redevelopment. These include property maintenance code enforcement, housing and community development, law and revenue departments, and redevelopment authorities and other organizations that have sometimes had to respond piecemeal to blight. At the same time, a land bank can be staffed with existing resources and folded seamlessly into the operation of these other entities as long as it is legislatively established in accordance with the statute and has a separate board. In other words, it brings new powers without necessarily expanding local government.