Scores of blighted and foreclosed houses in Lucas County could be transformed into community assets under a new land banking program authorized this week by the state legislature, County Treasurer Wade Kapszukiewicz announced yesterday.
The legislative bill, set to soon receive Gov. Ted Strickland's signature, allows 43 counties to create Land Reutilization Corporations as arms of county government to help acquire and reuse vacant properties for the public good.
The land banks could then improve the houses for resale, demolish them to clear blight, or sit on them until the real-estate market improves. Proponents say the program would prevent empty properties from deteriorating and dragging down local land values and community pride.
"I cannot overstate what a profoundly positive effect this will have on our neighborhoods," Mr. Kapszukiewicz said at a news conference, standing beneath peeling white paint on the porch of a vacant and foreclosed North Toledo home at 153 East Central Ave.
"Right now our housing situation in this community is we're often held hostage by Wall Street banks, out-of-town ownership interests," he continued. "This will allow us to make decisions about how our neighborhoods should look or our county should look, and we'll be able to do it in a coordinated way with money attached."
All tax-foreclosed properties would go into the land bank. And mortgage-foreclosed properties could join the land bank if the bank wishes to offload the land.
"All those properties that currently go to a sheriff's sale for tax reasons would automatically be transferred to the land bank," said Mr. Kapszukiewicz, who added that he doesn't expect real-estate investors or property flippers to like the program because it will cut their opportunities for profit-making.
Lucas County's land bank corporation would be funded in part by a 1 percent increase in the interest due on delinquent property taxes, netting an estimated $1 million a year.
The land bank could also get the proceeds of resold homes, and be eligible for government funds and to borrow money. It could also get money advances from the county treasurer's office to pay for acquisition and rehab expenses.
In taking over a property, the land banks would become responsible for paying the real estate taxes owed schools and local governments.
Lucas County could set up the land bank in about three months, when the bill is expected to go into effect. There would be five to nine people on it, including Mr. Kapszukiewicz, who would serve as chairman.
County commissioners must also sign off on its formation. Commissioner Tina Skeldon Wozniak said yesterday she is firmly in support of creating a county land bank. "We've been dealing with such a large amount of foreclosed properties in our community, and this helps us to get properties back on the market and to help stabilize neighborhoods," she said.
Officials could not give a number of vacant or foreclosed homes in the county. Last year in the city of Toledo there were 4,160 foreclosures and 1,598 sheriff's sales, according to the city's Department of Neighborhoods.
The land bank program should be fully up and running by early next year with the January, 2011, tax collection, Mr. Kapszukiewicz said.
The California owner of the modest one-story house where the county treasurer spoke yesterday said in a phone interview that he welcomes Lucas County's land bank because it could help him wash his hands of the property.
Peter Biata, 47, of San Mateo County, said his bank foreclosed on the property last year after he stopped making mortgage payments in March, 2009. He's no longer on the hook for the payments, but the bank won't take possession of it, Mr. Biata said.
"We just decided with the way the economy was going and everything that it was prudent to stop paying on it, and we thought we would just let it go to foreclosure," he said.
Mr. Biata said he bought the house more than four years ago from a wholesaler's Web site and was immediately displeased - "She totally lied about the condition of the property."
He said he put $20,000 in the house to fix it up, yet it didn't work out long term as a rental property and the value dropped more than he expected.
"I sure would like to be able to turn it around, and somebody could rehab that neighborhood or have it go to some more beneficial use," Mr. Biata said.
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