Land bank against blight

Dixon proposal aims to reduce red tape in city's sale of vacant homes, lots

Sun exclusive

October 10, 2007|By John Fritze | John Fritze,SUN REPORTER

Five years after Baltimore began a major effort to take control of thousands of abandoned properties, city officials are expected to announce a new program that would make it easier to sell them for redevelopment.

The land bank concept, which will be unveiled today by Mayor Sheila Dixon's administration, would eliminate red tape faced when a city-owned property is put up for sale - such as the requirement for an appraisal - to speed a process that some say can hamper redevelopment.

In a city where thousands of vacant homes and lots have come to define certain neighborhoods - leading to further decay and crime and falling property values - the effort could help the city bring pockets of blight back to life.

"We in housing have been concerned about the high amount of vacant and abandoned housing and vacant lots in the city of Baltimore for many years," said the city's housing commissioner, Paul T. Graziano. "We are most concerned that the activities that we undertake will increase the quality of life within communities."

Dixon's predecessor, now-Gov. Martin O'Malley, embarked on an ambitious goal in 2002 to take ownership of 5,000 vacant properties. The program, known as Project 5000, exceeded its goal, adding significantly to the city's real estate inventory. In turn, it helped to make Baltimore one of the largest owners of dilapidated property.

The city now owns about 10,000 vacant properties - one-third of the 30,000 vacant parcels. Taxpayers spend millions of dollars each year to board up those properties, extinguish fires started there and kill the rats that move in after people move out.

A 2001 study in Philadelphia found that abandoned housing on a block reduced the value of adjacent occupied properties by an average of $6,700 - a reduction that also lowers the amount the city collects in property tax.

Housing officials, meanwhile, have struggled to sell more than a few hundred of the lots each year to developers. An article in The Sun earlier this year documented how the number of city-owned properties put up for sale since Dixon took office in January had dropped significantly from past years.

Under the proposal being announced today - parts of which require City Council approval - the administration would no longer need authorization from the five-member Board of Estimates to sell abandoned property. That process, on average, can take 12 weeks, partly because it requires a sign-off from the city's law and finance departments.

As part of the Board of Estimates approval, the city is required to have the property appraised. Some believe that has led the board to focus on selling properties for as much money as possible, rather than finding buyers who might develop them in ways that would benefit communities.

The land bank would initially be created as a nonprofit organization and would be controlled by a board of directors that could include the city comptroller, Joan M. Pratt, and the City Council president, Stephanie C. Rawlings-Blake. The Housing Department has estimated that the land bank would need an initial budget of $2.8 million.

City-owned land is managed by several departments, including the Housing Department and the comptroller - who is elected separately from the mayor. Under the proposal, the Housing Department, which is controlled by the mayor, would be assigned to manage all property suitable for redevelopment.

A report drafted this summer by housing officials suggests that the city will eventually ask the Maryland General Assembly to pass legislation to give the land bank more power - including the power to hold title to property and to acquire it directly. But officials stressed that the land bank would not have the power of eminent domain.

Similar systems have been used successfully in Flint, Mich., and Louisville, Ky. - cities that have also struggled with a large stock of abandoned homes. In Baltimore, city officials said they hope the proposal would reduce the amount of privately owned abandoned property by about 3,000 parcels over the next five years.

"It's just long overdue," said Joseph T. "Jody" Landers III, executive vice president of the Greater Baltimore Board of Realtors and a former city councilman. "They're taking some initial steps to try to streamline the whole process of assembling properties ... that could be potentially developed in the future."

Dixon had become increasingly critical of the Project 5000 initiative as she served as City Council president and has been touting the idea of a land bank for years. But the proposal - which would remove the sale of properties from the Board of Estimates process - raises questions about public oversight.

Earlier this year, the administration introduced a charter amendment that would have allowed the mayor to increase dollar-thresholds for certain purchases that trigger the Board of Estimates approval requirement. The proposal, which came to light during an election year, was watered down significantly by the City Council.

Graziano said the Housing Department will be subject to routine auditing and reporting, but offered few specifics about how that would take place.

National experts say the creation of a land bank could go a long way toward helping the city deal with one of its most persistent problems.

Jennifer Leonard, director of the National Vacant Properties Campaign in Washington, said the entities centralize efforts to sell property so that potential buyers do not have to conduct separate negotiations with city agencies. They also shift the focus away from making money for the city and toward strengthening neighborhoods.

"There's always this tension between community development goals and revenue-generating goals," Leonard said. "Getting the most money for the property isn't always the best solution long term or short term."

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