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By Brett Widness, Urban Land Institute | August 9th, 2017

For more than a decade, the brick “two-flat” on the 900 block of North Drake Avenue on Chicago’s West Side had been vacant. During the housing boom, a contractor began converting the building, a two-story detached home with two separate apartments and a basement, into a three-unit condominium, with plans to develop the basement level into a garden unit. But the job was never finished, the property was abandoned, and the condo units fell into foreclosure.

Neighbors said the property became a hangout for heroin addicts, evidenced by the needles strewn in the yard and under the back porch. Residents called police regularly to report issues, and the neglected building had a variety of safety problems and structural concerns.

But by the time the school year begins this fall, the West Humboldt Park home will have a new occupant. A first-time homeowner plans to move in after renovations are completed, says John Groene, neighborhood director of the West Humboldt Park office of Neighborhood Housing Services (NHS) of Chicago, a nonprofit neighborhood revitalization organization. The homeowner plans to live on one floor and rent out the other.

The change will have an immediate impact on the block. “Vacant buildings, if nothing else, are magnets for crime. There is crime in some blocks in Chicago only because there are vacant buildings that make it attractive for crime to happen there,” Groene says.

A major reason for this property’s happy ending is the involvement of a land bank that acquired the building and wiped out its back taxes and encumbrances, making it easier for someone to purchase the property and improve it, Groene says. The number of land banks throughout the country rose exponentially in the aftermath of the foreclosure crisis.

“This would have sat for another ten years or have been demolished, there were so many encumbrances against the title,” says Robert Rose, executive director of the Cook County Land Bank Authority (CCLBA). CCLBA acquired the abandoned property via forfeiture and was able to remove $60,000 to $70,000 of tax, water, and receivership costs. From there, NHS purchased the building and had a first-time homebuyer under contract within a month, Groene says.

Land banks, as defined by the Center for Community Progress, are governmental entities or special-purpose nonprofit corporations that acquire problem properties, eliminate liabilities, then transfer the properties to new owners. The goal is to return the properties to productive use—and to the tax rolls—in accordance with community goals. Land banks often have special powers, including the ability to obtain property at low or no cost through the tax foreclosure process and to hold land tax-free, according to the center’s 2014 report Take It to the Bank.

Though land banks have been around for decades, they gained popularity in recent years as communities sought ways to deal with vast numbers of vacant, abandoned, and tax-delinquent properties, according to the report. The center now estimates there are more than 170 land banks throughout the country, and more than 70 percent of those land banks were established after 2008.

Many of these land banks are seeing results, says Kim Graziani, vice president and director of national technical assistance at the Center for Community Progress.

“Working alongside the community and particularly those residents most impacted by vacancy and abandonment, land banks can be an essential element to unlocking valuable land to achieve community goals,” Graziani says. “Land banks are most effective when they have the legal authority to intervene in those properties that are stuck in decline and inaccessible to the private market. Land banks often acquire properties that are underwater in value, have tangled title issues, and are caught in bureaucratic processes.”

The CCLBA has sold 327 properties it has acquired since its inception in 2013. A total of 133 rehabs have been completed, and 101 rehabbed buildings have been occupied by homeowners, Rose says. Meanwhile, 166 rehabs are underway, and 28 vacant lots are being developed, he adds.

The properties are acquired from Fannie Mae, Freddie Mac, and the U.S. Department of Housing and Urban Development, as well as through the court system, Rose says. Sometimes, the authority receives donations from banks and private citizens. The land bank also buys properties through county scavenger sales, which allows for the purchase of properties with tax delinquencies, he says.

In addition to making it easier for people to purchase and renovate problem properties, the land bank demolishes properties when that is the best course of action and also has been instrumental in helping improve the use of vacant lots—for community gardens and pocket parks, as well as side lots or garages for current homeowners, Rose says.

It also acquired and found buyers for four abandoned warehouses in the Chicago suburb of Bellwood, which are now occupied by a local woodworking company that makes cabinets and furniture, a rug importer, a printing company, and a vertical farming operation that employs troubled youths as well as ex-convicts, Rose says.

“It’s not just about single-family homes and getting them rehabbed,” he says. “It’s really about redevelopment for the region.”

In Cleveland, the Cuyahoga Land Bank has facilitated renovation of 1,500 properties since its creation in 2009, Gus Frangos, land bank president and general counsel, said during a recent talk at the City Club of Cleveland. It also has demolished about 5,500 blighted, often crime-infested properties. Sometimes demolition is the best remedy for problem properties that are far beyond repair, he said.

In Syracuse, New York, clusters of lots left vacant by demolition by the local land bank are now attracting the attention of developers, says Kaitlyn Wright, executive director of the Greater Syracuse Land Bank. “It’s helping shift demand in these neighborhoods,” she says.

The problem of abandoned properties in Syracuse predated the foreclosure crisis, Wright says. Decades ago, residents began fleeing to the suburbs and the number of manufacturing jobs started to dwindle, depressing housing prices. During the five years it has been in operation, the land bank has sold 450 properties it acquired, she says.

Many of the properties had confusing webs of complicated title issues, Wright says. When the land bank takes title to an abandoned property in the area, it is able to put a for-sale sign on it—and sometimes that is enough to attract a buyer, she says.

One example: a sign in front of a home in the Courtwood Lawn neighborhood caught the attention of a Vietnamese immigrant who lived across the street with in-laws. He and his wife transformed the shotgun-style house, gutting it and modernizing the interior to make a home for their family, which included children who could walk to the local elementary school.

“To finally have a house of his own was a dream come true,” says Wright.

Many recently formed land banks are still determining how much work they can take on and the best routes to getting results.

At the CCLBA, Rose says his office has the feel of a startup as it discovers how far it can go. For example, it has not yet helped turn around a block with six or seven abandoned properties; someday that may be a possibility, he says.

“We are exploring those boundaries in real time, and that’s exciting,” he says.

By Gail MarksJarvis, Chicago Tribune | July 21st, 2017

A decade after the housing crash destroyed the American Dream for millions of homeowners, black homeownership rates have dropped to levels not seen since the 1960s, hobbling African-Americans’ efforts to build their wealth.

Nationally, only 42.2 percent of blacks owned homes in 2016, compared with 71.9 percent of whites, according to a new report by Harvard University‘s Joint Center for Housing Studies.

And in Chicago, the gap between black and white homeownership rates is even more extreme. Only 38.9 percent of African-Americans owned homes in the Chicago area in 2015, compared with 74 percent of whites. Before the housing crash, almost half of African-Americans in the Chicago area owned homes, according to Harvard’s research. Latinos in the Chicago area also lag when it comes to homeownership. Only 50.5 percent of Latinos owned homes in the area in 2015.

Local efforts are underway to help more Chicago-area residents become homeowners, something that would help strengthen neighborhoods and put those individuals on a stronger financial path.

“Homeownership is a way for people to generate stability and wealth and not just go to work every day,” said Deborah Moore, neighborhood planning director for Neighborhood Housing Services of Chicago, a nonprofit that helps Chicago residents buy and keep homes. In addition, homeownership can “change the trajectory of neighborhoods,” she said.

Without homes, blacks lack a powerful source of wealth creation, said Jonathan Spader, senior research associate with the Harvard center. Homeowners generally build equity that allows them to eventually buy other homes or businesses and send children to college. Homes also are passed to younger generations upon death, allowing future generations to build wealth.

“Because whites are far more able to give inheritances or family assistance for down payments due to historical wealth accumulation, white families buy homes and start acquiring equity an average eight years earlier than black families,” researchers Thomas Shapiro, Tatjana Meschede and Sam Osoro of the Institute on Assets and Social Policy at Brandeis University wrote in a report. The Brandeis researchers found that homeownership is the single largest predictor of wealth differences among races.

After decades of making gains, the most recent nationwide African-American homeownership rate was the lowest it’s been since the Fair Housing Act of 1968 began tackling discriminatory housing practices.

Historically, homeownership has been 28.4 percent higher among whites than blacks, but the racial gap in homeownership is now the largest since data became available in 1940, Spader said.

“Prospects for black homeownership have gone from hopeful to pessimistic in only 15 years,” analyst Laurie Goodman said in a recent Urban Institute paper.

By Corilyn Shropshire, Chicago Tribune | February 2nd, 2017

Aiming to curb Chicago’s vacant lot epidemic, the Cook County Land Bank Authority has made more than 4,000 once tax-delinquent vacant lots available for sale.

The 4,437 properties are available in 22 community areas, primarily on Chicago’s West and South sides and in 12 west and south suburbs, for $3,000 to $5,000. Many of the lots have sat vacant for a decade or more, and are among 8,000 tax-delinquent properties the land bank aims to sell to local developers, not-for-profits, block clubs and community organizations to help revive neighborhoods hit by the foreclosure crisis and the decline of manufacturing.

The land bank, which owns the properties’ tax certificates, has removed the red tape for potential buyers by extinguishing back taxes, liens, unpaid city fines or utility bills.

“We’re trying to give an adrenaline boost to development in these communities by eliminating barriers to getting access to the property,” said Cook County Commissioner Bridget Gainer, chairman of the 3-year-old land bank.

“The thing we wanted to address … is to say, ‘Look, I can’t make someone develop the property, but I can remove the barriers to that decision,'” Gainer said.

The for-sale properties were identified based on their proximity to what Gainer described as “other economic engines,” such as CTA and Metra stops, railroads or open space, such as parks.

The program shares a similar goal to the city’s Large Lots Program: Make it easier to purchase and redevelop vacant properties in communities where private investment has been scarce.

In the city, vacant lots are available in Auburn Gresham, Austin, Belmont Cragin, Brighton Park, Calumet Heights, Chatham, Chicago Lawn, Englewood, Garfield Park, Gage Park, Grand Boulevard, Greater Grand Crossing, Hermosa, Humboldt Park, Morgan Park, Roseland, South Shore, Washington Heights, Washington Park, West Englewood, West Pullman and Woodlawn. The suburban communities are Bellwood, Chicago Heights, Country Club Hills, Dixmoor, Matteson, Maywood, Melrose Park, Midlothian, Olympia Fields, Posen, Riverdale and South Holland.

In the city, potential buyers are required to provide a letter of support from the local alderman if they don’t live in the same ward as the property. Suburban properties must have the support of the municipality if the buyer is not local.

Closings could take up to six months and once closings occur, new owners are responsible for paying property taxes from that point on.

Is slashing red tape enough to lure buyers to invest in blighted properties, many of which are in struggling communities?

“It’s much better to incentivize development and get things moving than to wait and see if someone is interested,” Gainer said. “I can’t read the minds of the developers, but why not try it — maybe it works, maybe it doesn’t, but I’m not going to give up trying.”

The land bank’s work, which includes buying 400 vacant homes in blighted neighborhoods and selling roughly 350 of them, demonstrates that eliminating barriers to purchasing blight properties creates a new network of potential buyers and boosts a community’s potential for revitalization, according to Gainer.

The land bank plans to market an additional 500 commercial and industrial properties this spring.

If there are challenges to rehabbing a residential property, imagine the hurdles to redeveloping an industrial site, Gainer said.

The city of Chicago’s vacant lots program, known as the Large Lots Program, sells vacant city-owned parcels to nearby homeowners for $1 each. The city requires the lots be for residential uses only, and most are turned into side yards, gardens or landscaped open space. Buyers must also agree to maintain the lot, pay property taxes and hold the land for at least five years before selling it.

So far, the city has sold 550 lots in greater Englewood, East Garfield Park, Austin, Roseland, Pullman and Auburn Gresham. The city has received 2,800 applications for another 4,000 available properties in 33 communities, according to Peter Strazzabosco, deputy commissioner of the Chicago Department of Planning and Development.

Those interested in browsing or buying the land bank’s vacant lots can visit the organization’s website.

“Now we get to tap into the ingenuity of the people who think, ‘You know what, this is what I’ve always wanted to do,'” Gainer said. “This allows them to bring imagination to our community.”

By Dennis Rodkin, Crain’s Chicago Business | January 30th, 2017

More than 4,400 vacant lots in Chicago and the suburbs are going up for sale in an effort to attract development to areas that need it.

With the new offering of vacant lots to be announced today, “we’re trying to speed up the process of empty land being put back to use,” said Bridget Gainer, a Cook County commissioner who chairs the four-year-old Cook County Land Bank.

Until now, the land bank had been selling only vacant homes, to rehabbers or families who fix them up for their own use. The land bank sells formerly delinquent properties after cleansing them of red tape, such as back taxes and fines.

Because of the land bank’s ability to wipe past problems off a property’s title, “we can make it more affordable and faster for a developer or a next-door neighbor or a garden club to start a project, or to just put a fence around the lot and keep it up.”

More than 85 percent of the lots are in residential areas. Rob Rose, executive director of the land bank, said the pricing had not yet been finalized but that most of the lots would cost $3,000 to $5,000.

“It’s lower than any land transaction that has taken place in the community,” Rose said.

Every lot is within half-mile of a CTA or Metra rail stop or a stop on a major bus line, making them appealing for redevelopment. But Rose and Gainer said they expect the buyers will be a mix of residential and commercial developers, residents near or next to the lots, and garden or civic clubs.

“Build a garden or a basketball court,” Rose said. Buyers will not be required to build within a specified time frame or, if they build housing for resale, to conform to any city-sponsored affordability requirements, he said.

“We’re trying to stimulate the market without any market-limiting activities,” he said.

Gainer and Rose will announce at a City Club of Chicago event today that the land bank has 4,437 vacant lots available for sale, 3,208 in the city and 649 in Cook County suburbs. Another group of about 3,000 will be offered later, Rose said.

“These lots have been vacant for anywhere from five to 10 years,” Gainer said, and were all sold for delinquent taxes by the Cook County treasurer in 2015.

The lots are scattered around the 27 city neighborhoods and suburbs where the land bank is focusing its effort this year to try to concentrate improvements in areas that need a boost. The 12 city neighborhoods include Austin, Chatham and Greater Grand Crossing. Among the suburbs on the list are Burbank, Maywood and Riverdale.

They’re all areas where developers are reluctant to spend the money required to clear up a property’s legal status. “The property may not have been worth as much as the back taxes, so nobody’s going to take it on,” Rose said.

“If you’re a developer looking at Finkl Steel’s old site on the North Side,” Gainer said, “you can afford to cover the legal costs” because of the high potential for profit on the other end. The land bank’s lots are in areas where both profit margins and investors’ pockets are much smaller, she said.

Click here to view the official press release.

Chicago Tribune Editorial Board | December 23rd, 2016

Outsiders like to define Chicago with convenient, obvious imagery. Obama and Capone. The Cubs and Ditka. The Daleys and the Blues Brothers. We know, however, what the genome of our city is. Belmont Cragin and Bronzeville. Avondale and Avalon Park. Roscoe Village and Roseland. The patchwork of bungalows, graystones and two-flats, its schools and corner grocery stores, gives the city its defining contours.

So, to fix a Chicago that’s deteriorating in some places and emptying out in others, you’ve got to fix its neighborhoods. Block by block, house by house. That’s how you seed real change.

There’s a dizzying array of public and philanthropic initiatives aimed at remedying what ails our neighborhoods. One of them has been steadily gaining traction. We’re here to wish it an increasingly prosperous 2017.

Three years ago, the Cook County Land Bank Authority launched as a way to turn back blight created by foreclosures. The Great Recession hit everyone hard, but it pummeled neighborhoods on the South and West sides, where legions of homes were boarded due to foreclosure. The land bank has been buying up those houses and selling them to local developers, who then revamp the homes and get them back on the market — and back on property tax rolls.

The focus on foreclosed homes is smart. A street dotted with boarded-up homes is a cancer on the march. People don’t move into neighborhoods with blight, they move out of them. The list of South Side neighborhoods with dwindling populations is long, according to recent census data: Auburn Gresham’s population dropped 13 percent from 2011 to 2015; Roseland’s population dropped nearly 11 percent; Chatham, a 10 percent drop; Englewood, 21 percent.

There’s a logic to the land bank’s methodology. First, the managers sell only to local developers, not to larger, outside firms with no stake in South and West side neighborhoods. They vet the developers before doing business with them, ensuring that their rehab work has been sound. Another crucial element in the land bank’s game plan: the managers try to eliminate red tape — back taxes, liens, unpaid city fines or utility bills — that could slow the developer’s acquisition of the property.

The land bank got off the ground with a $4.5 million grant, part of Illinois’ $1 billion share of the federal government’s $25 billion settlement with five of the nation’s biggest mortgage lenders. Cook County Commissioner Bridget Gainer, the driving force behind the land bank’s creation, boasts there’s not a single tax dollar in the land bank authority’s coffers. The money generated by selling the properties to developers is reinvested in the land bank. Gainer says the authority’s reliance on grant funding has gone from 94 percent in 2013 to just 12 percent this year. Self-sustainability is around the corner.

When it comes to saving neighborhoods, Gainer sees the land bank as “the cavalry. There’s no outside savior coming.” If that’s the case, the land bank needs to ratchet up its inventory. Since its inception, the land bank has been focusing on 13 West and South side neighborhoods and 13 western and southern Cook suburbs. So far, it has acquired 400 homes, selling 300 of them to developers. Across Cook County, there are roughly 20,000 vacant structures. Gainer’s goal for 2017: acquire 1,000 homes.

We’d like to see Gainer’s land bankers take on even more. The current roster of neighborhoods doesn’t include Roseland and Englewood, blighted, violence-wracked communities with falling populations. Gainer says in order for the land bank strategy to work, there has to be enough of a market in a neighborhood, enough momentum, to draw developer and homeowner interest. We’d like to see the land bank try its hand at seeding renewal in more challenging swatches of the city. Focus on one street in Englewood, turn it around, and developers may view that as the spark they need to rehab there — and the next street over.

On the South Side, a house in the 1100 block of West 101st Street in Washington Heights is an example of what the land bank can yield. Foreclosed in 2015, the house once had a hole in its roof and water damage that wrecked its walls, rugs and basement. Jason and Esther Williams, Bronzeville developers, bought it from the land bank for $16,000. They put more than $87,000 into an overhaul — new walls, new plumbing and electrical, central air and tuck pointing. It’s on the market now for $149,000.

“A house like this would be more than double the price on the North Side,” Jason Williams says. “It’s time to bring those values up here, because that’s what changes the landscape of a neighborhood. It makes people have pride in home ownership. That’s what the South Side is missing.”

By Lisa Fielding, CBS Chicago | November 29th, 2016

The Cook County Land Bank was established in 2014 as a result of the financial crisis.

“It’s meant to address one thing that is so important. ‘How do you make sure neighborhoods are sustainable?’” said Bridget Gainer, Cook County Commissioner, who spearheaded the program. “Right after the financial crisis, we started to see this spike in foreclosures and the foreclosures, because they were so many of them, lead to longer and longer turnarounds in court which lead to more vacant homes.”

“The acquisition process for housing is tough. You really want to figure out a way to rehab homes with people in the community and use the most local labor and business as possible because then that keeps the investment in the community and builds it up even further.”

Gainer said the Land Bank program buys vacant housing, clears the title, taxes and leans and connects with rehabbers and developers who then sell the home to new buyers. WBBM’s Lisa Fielding reports.

“For us, the important thing was how do we build and attract a group of developers in the community, how do we acquire the housing, and go through the court process? Part of the problem is going through those legal hurdles to make sure that housing was available,” Gainer said.

The Land Bank’s startup was funded by the Illinois Attorney General’s office in 2014 as a result of the national mortgage crisis settlement.

“In the course of that time, we’ve been able to buy 400 homes, we’ve sold 300 homes, but we sold those 300 homes to 135 unique developers so we’ve spent a lot of time in recruiting and investing in local developers in ensuring that they have the chance to get the benefit of these rehab dollars,” she said. “We aren’t just rehabbing housing, we’re also building these small businesses throughout the community.”

Gainer said the neighborhoods that have benefited the most are Chicago’s Auburn Gresham, Chatham and in Des Plaines where there was flooding and blight.

“We’re just about to relaunch 10 homes in Chatham. Chatham and Auburn Gresham have strong housing stock and is ripe for development,” she said.

Gainer said their goal is a 1,000 homes in 2017.

“Look, I don’t want to live next to a vacant home. Nobody does. It isn’t just that it brings down your property values, but it attracts crime,” Gainer said. “What The Land Bank is trying to do, is rehab homes and getting a family back into it, who is a homeowner and not just a renter is our highest goal and it’s something we’ve been able to do more than 300 times.”

For more information, log onto http://www.cookcountylandbank.org/