Phil Amthor doesn’t like to use the term “sweat equity” when discussing the Birmingham Land Bank Authority’s (BLBA) effort to reduce the number of blighted, tax-delinquent properties in the city, an effort that began in earnest in December 2014.
“Sweat equity isn’t really a concept that works,” said Amthor, seated at a conference table with several of his associates on the 10th floor of the Birmingham City Hall. Amthor oversees the BLBA with the mayor’s office. “What we do is we get the tax deeds of those properties and we sign the rights that come with those deeds over to the citizen. It’s an agreement that lasts two years and they have to pay $50 for that. What that allows for is the citizen will be immediately able to start using it and gets the tax deed in [the city’s] name while we’re in the process of helping them clear the title.”
For residents wondering what, if anything, can be done to the blighted property in their neighborhood, the formation of the Birmingham Land Bank Authority was a welcome solution for helping to navigate the complicated terrain of tax liens.
On May 6, 2014, the city council passed a resolution which allowed the creation of the BLBA, five years after Governor Robert Bentley signed the state law which allowed for such entities. The following week, the council also approved the transfer of $367,987.59 from the Capital Funds budget, appropriating it to the Strategic Land Banking funds.
Despite receiving funding from the city, the BLBA board acts as an autonomous agency.
Since launching the pilot program in the Pratt City neighborhood with 26 properties, John Colon, Birmingham’s department of community development director, said the city has seen increased tax revenue as a result of the BLBA’s efforts. “It’s been transformative,” Colon said. “It’s led us toward our goal of stabilizing communities; almost 500 less lots that the city has to deal with. At the average cost of $1,000 a year for [maintaining] those lots, you have nearly half a million dollars that the city can redirect to other services.”
As of February 2017, the BLBA has put 428 properties back into use, which translates to roughly $44,000 in annual tax revenue, according to city records. There are another 900 parcels that are in some stage of review.
Citizens can utilize a variety of different programs through the BLBA. The Adopt-A-Lot program allows a citizen to reach an “agreement with BLBA for two years, through a lease, for a $50 administrative fee. Citizens/groups have immediate use of the lot without first clearing title. At the end of two years BLBA will assist in clearing title so they own the property free and clear,” according to the BLBA brochure.
The Side-Lot program is similar, but it is only available to citizens who share a property line with the tax-delinquent parcel, which is only eligible for takeover by the neighbor if there is no structure on the lot.
The General Request Program is available for citizens, nonprofits, and businesses who wish to acquire property, with a structure or not, for a flat rate of $3,500. They must also provide a plan for what they wish to do with the property, according to Amthor.
“In some communities property values have increased 20 percent,” Colon said. “In other communities they’re even increasing more than that.” Asked which neighborhoods, specifically, have seen this kind of growth, Colon responded, “Norwood, Pratt, and Avondale. Other neighborhoods have seen similar results: Crestwood, Southside, and Woodlawn.”
Birminghamhousingstudy.com confirms that there have been substantial increases in property values in those neighborhoods in the last decade, though it does not verify if they have increased 20 percent, like Colon suggested, or to what degree the BLBA has impacted those changes.
According to city records, the communities that have seen the largest impact from the BLBA are District 4 (North Birmingham, Collegeville), with 123 properties, and District 9 (Pratt City, Ensley, Smithfield), with 87 properties. Districts 3 (Southside, Five Points) and 1 (Northeastern Birmingham communities) have only seen four and five tax-delinquent properties moved, respectively.
Colon said the BLBA was partly modeled after the Genesee County Land Bank in Michigan.
“Genesee County has a unique relationship with the state in that their legislation allows them to actually receive the parcel after it reaches its five-year tax limit automatically,” Colon explained. “So they don’t have to apply for the parcels through the treasury, they just automatically receive them. So it’s a streamlined process for them. Then of course, in addition, they receive funding for their operation.
“We’re probably doing more in terms of transferring properties over to citizens than most other land banks,” Colon said.
This is an issue brought up by Rachel Williams, a Crestwood resident who, over the last year, has been trying to acquire tax lien properties. She explained that properties often get lost in the transition from tax lien to being acquired by the BLBA. She said that more than once she had a parcel “snatched” from her by the BLBA.
Amthor denied that the BLBA purposefully targeted these properties but did confirm that they have precedent over citizens when it comes to acquiring them.
While Williams is unequivocally in favor of the BLBA mission, she believes there are certain checks and balances that need to be enacted in order to assure the public that their best interests are being protected.
“Where these properties are getting snatched from people is in this tax lien to land bank transaction,” Williams said. “But I’m also curious if there isn’t snatching going on within the tax lien system. I’ve had that happen to me several times when I bid on properties. I’d see no activity for months, I’d place a bid and then ‘bam,’ there’s a lock on it. And that’s just fishy because it was three houses all in the Avondale area. Maybe there is a lot of interest. But it seemed like some paperwork finagling.”
While Williams did eventually acquire a tax-delinquent property, she did not go through the BLBA. Rather, she utilized the tax-lien system in which the properties are placed before they are eligible for the BLBA after five years.
She walked a reporter through the process of how she would go about doing so on a laptop.
“Wells Fargo bank owns this property right here,” Williams said, pointing to a red dot on the screen. “This one is land-bank-available so if I bid on this the BLBA could just take it from me, With no direction saying to ‘just go through us instead.’ There is no communication between the two. I could send in my money and the land bank could just take it from me and send my money back.”
Another issue Williams pointed out is that “there are no checks in place” to make sure city employees are not profiting off the properties being acquired by the BLBA.
“I’ve been thinking about conflicts of interests where these employees could be benefiting financially off of some of these properties. Is there a way for the public to make sure they aren’t abusing this system? That’s what I want to know,” Williams said.
When asked if there was a limit on the number of properties a single buyer can acquire, Amthor said, “Not yet. We will probably put something like that in place,” and confirmed that city employees can purchase properties through the BLBA.
Williams just wants there to be checks and balances in order for the BLBA to work for everyone. Also, she believes the city should be doing more to educate the public on how to utilize the BLBA. They need workshops,” Williams said. “Teach people how to do this, not just corporations. There are plenty of these properties they aren’t interested in. Let’s teach people how to do it because there are so many people I know who want to acquire these properties but just don’t know how.”
Colon said the BLBA is charting a new course and that growing pains are to be expected, though he hopes to resolve any issue that people might have when trying to acquire these properties.
“You have now communities that are being stabilized. You don’t see blight on those lots. Some folks are even investing. We have lots that have not only been taken into the program where they have put up fences and structures. So every dollar that’s invested we’re seeing the dollars returned with property value increases,” Colon said. “And that is definitely a good thing for the city.”
The photo used at the top of this article — and which accompanied its print version — was the site of a fatal house fire and is not a tax-delinquent building. Weld regrets the error.