The house across the street is abandoned. Vagabonds occasionally shuffle in and out, the windows have all been broken and the beauty of the home has long been forgotten. Now it stands as a derelict monument of tax delinquency and blight in a city that has been wracked by foreclosures and forgotten homes.
Scenes like this are common in Birmingham. According to representatives with the city, there are approximately 4,000 properties in the downtown area that have been abandoned and are at least five years behind on their taxes. So it’s not out of the question to look out the window of any given building and see a property that has been abandoned or deemed unfit for human inhabitants.
On May 6, the Birmingham City Council unanimously passed a resolution allowing the creation of the Birmingham Land Bank Authority. This body, which will operate as its own separate entity while being funded by the city, will now have the ability to waive back taxes on abandoned lots and homes and make it easier for them to be put back to practical use, something that could have an immediate impact in combating the cycle of blight in Birmingham.
What is a land bank authority?
In 2009, the Alabama Land Bank Authority was signed into legislation. In May of last year, however, Governor Robert Bentley signed into legislation an amendment to the bill which allowed for more lateral movement for municipalities when acquiring the properties. The amendment, Act 2013-249, essentially made it more feasible for cities to obtain and make use of the tax delinquent properties.
The Birmingham Land Bank Authority is an entity that will consist of seven appointees, four of whom will be appointed by the city council, and three of whom will be appointed by the mayor’s office, with the option of the mayor filing one of those positions. A handout from the mayor’s office outlines the purpose of creating such an entity in Birmingham.
“The Land Bank is one of the most important elements of the RISE Initiative, a multifaceted neighborhood stabilization strategy also consisting of a new housing and property maintenance code,” the handout reads.
“The land bank will allow neighborhood residents living adjacent to “sold-to-state” properties listed in the land bank (those that are vacant and behind on taxes for at least five years) to obtain them with little or no cost to homeowners,” the handout goes on to say.
Perhaps the best way to explain the purpose of having a land bank in Birmingham is simply to look at the state legislation that made having such an authority possible. The Birmingham Land Bank Authority will have to comply with the state laws that were passed just last year.
Code of Alabama-Title 24 Housing- Section 24-9-2 states that “The Alabama Land Bank Authority is hereby created for the purpose of acquiring tax delinquent properties in order to foster the public purpose of rehabilitating land which is in a nonrevenue-generating, nontax-producing status to an effective utilization status in order to provide housing, new industry, new commercial and economic development, other productive uses, jobs for the citizens, assemble parcels of real property for redevelopment, stabilize property values, and remove blight.”
Just how is this possible? Kelvin Datcher, the point person on this initiative who works within Councilor Sheila Tyson’s office – Tyson heads up the Public Improvements Committee — explained that it will be vital to the success of the program that people who are elected to the board will not be influenced by “the political winds that blow in Birmingham.”
As it stands currently, the Birmingham City Council is in the process of evaluating the applications for the positions with the land bank authority. Also, each council member will nominate a member to the Citizens Advisory Board for the land bank in each of their districts.
“They have been spending time evaluating the applications. They are going to have eight nominations that the public improvements committee will recommend to the city council. Right now they are just trying to firm up interviews with the applicants. All of the council will be invited to the interviews,” Datcher said, adding that the mayor’s office will do the same with their nominations.
“We want to find a slate of four people who will reflect the professional, geographic and racial diversity of the city. They want it to be a staff of professionals not influenced by politics,” Datcher said.
When asked why it has taken Alabama this long to create an authority to deal with the problem of tax delinquent properties in Birmingham, Datcher said that since its creation in 2009 and the amendment that was signed into law last year, the time it took to form a land bank in Birmingham was relatively quick — “Record-breaking, if we are talking about the time it takes Congress to pass legislation,” he quipped.
When asked about the funding for the land bank, Datcher declined to comment on the record about exactly how it will be funded, but said that the land bank authority will operate as its own entity while being funded by the city.
However, on May 13, the Birmingham City Council approved a transfer of $367,987.59 from the Capital Funds budget, appropriating it to the Strategic Land Banking funds.
Property for the people
Valerie Proctor Davis is a member of the East Lake Blight Club, an organization aimed at combating community stains in the form of abandoned homes and derelict properties in East Lake.
“I think this is one of the most important things to happen in Birmingham for a generation or so,” Davis said enthusiastically. “This is a city that has been suffering from serious blight, and having a land bank authority is a something that can really help with that.”
The current property maintenance codes in Birmingham have allowed this problem to seep into the neighborhoods and blemish many with homes that have been partially burned, or lots that are so overgrown with weeds that wielding a machete would be an exercise in futility in some of the long-forgotten lots, she explained.
Birmingham City Council member Sheila Tyson, who has been one of the main proponents of the land bank authority, said this is an opportunity for people to reclaim the neglected properties that litter their neighborhoods.
“There are literally thousands of abandoned and uncared-for properties all across the city of Birmingham,” Tyson said. “We know that a single overgrown lot or a single dilapidated home can infect an entire neighborhood. It invites crime and criminal activity, it depresses the values of homes and it lessens the pride neighbors feel about their communities. So if you begin to imagine that impact times a thousand, times 5,000, or times 10,000, you can see why so many of our neighborhoods are struggling.”*
“People died, the houses were abandoned and the economy turned down,” Davis said. “You get this domino effect in neighborhoods with abandoned homes. So these houses have back taxes on them, the values declined since they have been abandoned and neglected and the cities can’t maintain to keep them up. So you have this downward cycle.”
“I was at a budget meeting last week for the city and there they were talking about how it cost $6.3 million a year to mow all of the vacant lots in Birmingham,” she added. “That is just way too much. That’s our tax money being flushed down the drain.”
The cost to mow the lawns of abandoned lots is then assessed to the already outstanding taxes on the home, so in order to acquire the property, a potential buyer would then be forced to pay the back taxes as well as the cost of upkeep.
“All of that cost of mowing and back taxes are put onto the properties and people can’t afford it. What the land bank authority has the power to do is waive those fees so people can actually afford it,” Davis said, adding that some of the buildings she sees in East Lake that people live in should be deemed unfit to live in.
“Run-down rental properties have loopholes for token repairs. If you have a condemnation notice, you can put it off by filing for a token repair. This just creates bigger problems,” she said, adding that the problem is especially widespread in Birmingham.
“What’s proposed now is that people next door to vacant properties will be able to acquire title through sweat equity – I presume the land bank will be charging developers. The land bank ordinance specifies how proceeds will be divided. Also the mayor’s office and council are saying that the neighbors would get first chance at the vacant properties, before outside developers,” Davis said.
Seeing as how the land bank authority has not yet officially been called to order, the details remain unknown, and as Davis explained, bylaws and terms of practice will still need to be written.
Jack Green, chief executive officer with Neighborhood Housing Services of Birmingham, thinks that the land bank authority will help to combat the issues of vacancy in Birmingham, but says that people should not assume anything until the members of the board are appointed.
“Vacancy is a big problem in Birmingham. And I definitely think that the land bank authority can help with that,” he said, “but we have to be realistic. We can’t think that is 90 days or so we are going to have this well-tuned engine. I’d say we would be lucky to have something and see results by this time next year.
“One in five homes in Birmingham are vacant. That’s pretty significant. A lot of those vacant homes would make for good housing. The level of construction in these old homes is definitely worth salvaging,” Green added.
But Davis said that in some cases people have become so fed up with looking at these run-down homes that they resort to setting them on fire. Oftentimes, however, the structure will not burn down, and only becomes an even bigger, charred eyesore.
Nationwide, land banking is a relatively new concept. Places like Flint, Michigan have had success with similar programs that have helped to deal with downtrodden real estate. According to the Genesee County Land Bank website, the bank currently owns 8,937 properties in Genesee County.
The Michigan state legislature passed the bill in 2004 that allowed the Genesee County Land Bank Authority to be formed. According to their website, “The GCLBA uses the amended tax law as a constructive community development tool: avoiding the potential neglect or misuse that comes from selling land at auction, the County is able to acquire abandoned land through the foreclosure process and determine the best use of that land.”
“The committee couldn’t come to a consensus with the mayor, who wanted four appointees with his office. So we went through about seven or eight versions of the BLBA until we were able to get to a place where the council was comfortable. It wasn’t a fight, but there were definitely competing priorities,” Datcher said.
In a city with a history of self-inflicted wounds, could these competing priorities lead to turmoil within the land bank authority? Datcher remains optimistic about the chances of success for a land bank in Birmingham.
Like Datcher, Green is confident that this authority can work in Birmingham. “The mayor and the council worked their differences out and there seemed to be a lot of cooperation in terms of passing this ordinance. The next big hurdle will be determining who will be appointed to the positions,” Green said, adding that Birmingham is the first municipality in the state to pass a land bank ordinance.
Davis also agrees with the land bank authority’s potential for success in Birmingham. “I’m very, very hopeful. The city was in an endless cycle with no way out of blight. A land bank is a way out of that. I just hope that the council and the mayor will appoint knowledgeable people and not just political
*Update (6:50 p.m. 6/4/14): Post updated to add quote from Councilor Tyson.