Largest U.S. Land Bank promises to turn around blighted properties, increase single-family rentals

By Frank Alarcon

On January 16th of this year, the Cook County Board of Commissioners voted unanimously to establish the Cook County Land Bank Authority, an independent, quasi-governmental agency spearheaded by Commissioner Bridget Gainer (D-Chicago) aimed at reviving Cook County’s vacant properties.

As of October of last year, there were approximately 200,000 vacant housing units in the county, in addition to over 85,000 foreclosure cases pending in court. Vacant and distressed properties have numerous consequences for local communities, such as drawing crime, and depressing nearby property values. They in turn contribute to a declining tax base, encourage out-migration, and leave municipalities with ballooning maintenance, demolition, and law enforcement bills.

Despite the abundance of vacant properties, the county suffers a shortage of rental properties for families. “There is such a disconnect out there,” Gainer told the Chicago Sun-Times. “You see people walking away from their homes, but there’s a long transition period to a new owner because of the backlog of foreclosures.”

A Land Bank works by acquiring vacant properties through various means, such as purchase from financial institutions, gift, government transfer, and tax-sale purchase. Once a Land Bank has acquired a property, it has wide discretion as to how to proceed in order to ultimately restore the property to productive use.

In a neighborhood with an excess of properties on the market, such as parts of Chicago's South and West sides, a Land Bank may choose to hold an acquired property tax-free for a period of time, thus reducing the number of properties on the market and boosting local home values. A property acquired under a long-term hold strategy may be temporarily repurposed during its hold period for uses such as urban agriculture. Other strategies at a Land Bank’s disposal include transferring a property to a responsible landowner quickly rehabilitating a property and placing it on the market (processes that may require clearing title and/or debt, which land banks can facilitate), or, if deemed necessary, demolishing a vacant building and holding the land for future development opportunities. A Land Bank can also aggregate adjacent but unrelated vacant parcels in order to meet community development goals.

Additionally, according to Commissioner Gainer’s proposal, Cook County’s Land Bank promises to administer a single-family scattered site rental program aimed at meeting the county’s unmet need for quality single-family housing. Most properties participating in this program will likely be acquired before the start of the lengthy foreclosure process, which can take over 500 days during which the property sits vacant.

While other major U.S. population centers such as Minneapolis-St. Paul and Cleveland have benefited from Land Bank programs, Cook County’s will be the largest in the nation once it becomes operational. Numerous organizations as varied as the Chicago Association of Realtors and the Action Now Institute have vocally expressed support for the Land Bank, many voicing hope that the land bank will prioritize community involvement and revitalization of the county’s affordable housing stock. While the Cook County Land Bank Authority is still in the process of carrying out start-up activities, its Board of Directors is in place and the county is working to prepare a $20 million grant proposal to the state Attorney General’s office to assist in funding the initial stages of the Land Bank’s work. Cook County’s Land Bank is well on its way toward becoming operational and we see tremendous potential for it to improve communities and solve the unmet need for quality and affordable single-family housing throughout the county.