Butler County is at a disadvantage to receive demolition money from the newly reached multi-state $25 billion foreclosure fraud settlement because it doesn’t have a land bank in place, said Ohio Attorney General Mike Dewine.
Ohio’s $335 million share of the settlement with five of the largest U.S. mortgage lenders sets aside $75 million for abandoned and vacant property demolition. DeWine said Monday in Cincinnati he hopes to award demolition money to local communities in grants with one-to-one matches.
DeWine said the $75 million still won’t be enough to take down all the properties in Ohio that need it.
Cincinnati has 2,342 condemned or ordered vacant structures and Dayton has 14,000 vacant structures, according to the attorney general’s office. Butler County had 12,313 vacant housing units in 2010, according to Census data, but the county does not keep track of condemned homes.
“I made it a priority to do this to designate the money and really it was my decision how that part of the money was spent because I felt it was really important for these neighborhoods to survive. It’s kind of hard for neighborhoods to survive when they have houses that look like this, it depresses the value of the land, remaining homes, creates an environment that’s not good for law enforcement,” DeWine said.
The potential match requirement puts counties with land banks already in place in a better position to receive funds because the land bank system has a ready revenue stream to provide the local dollars needed for the match, DeWine said.
A county land bank, or County Land Reutilization Corp., is a quasi-public, nonprofit organization that can acquire vacant, abandoned, tax-foreclosed or other real property for rehabilitation and reuse. A land bank can acquire properties cleared of all liens, including delinquent property taxes. Land banks often are funded by penalties paid on delinquent property taxes.
Cuyahoga County was the first in Ohio to establish a land bank in 2009. More than 10 counties have since formed land banks, are in the process or shown interest, including Butler, Hamilton and Montgomery counties, according to Thriving Communities Institute, a land bank advocacy group.
It’s not to say communities without land banks won’t be able to apply for demolition grants, said Lisa Hackley, a spokeswoman for DeWine’s office. Hackley said the criteria to apply for demolition funds is still to be determined. The money is estimated to be available by springtime.
“In Cincinnati we have the infrastructure to receive this money and to do something with it. Some communities have not put the land banks together and they really haven’t done this yet,” DeWine said. “I would encourage that to be speeded up because we have money and we need somebody who can take it and do something with it.”
DeWine came to Cincinnati and Dayton Monday to talk about the demolition grant program, visiting condemned houses in Cincinnati’s Price Hill neighborhood on McPherson Avenue. He made similar visits Friday to blighted properties in Cleveland, Youngstown and Mansfield.
Butler County is in discussions to form a land bank, which has received support of the county’s largest two cities, but has yet to go before commissioners.
“There’s probably a lot more sites that need the demolition than we have money and time to take care of,” said Butler County Development Director David Fehr. “If we got half a million dollars that would go pretty far.”
Stacey Dietrich Dudas, Hamilton economic development specialist, said, “That might be the push the county needs to fast track it.”
Hamilton and Montgomery counties already established land banks, but it took Hamilton County close to a year and a half to formally pass legislation last October to create one, said Todd Kinskey, Hamilton County director of regional planning. It will probably be six months before the first property is acquired, he said.
“I think you can make it move faster, but I would say optimistically, I would say getting a land bank in place in less than nine months is unrealistic,” he said.
Demolition can stabilize communities by removing blight and increasing property values, said Jim Rokakis, the former Cuyahoga County treasurer who formed Ohio’s first land bank and is now a land bank consultant, in a Washington Post editorial published Friday. Vacant properties can raise costs for communities for maintenance, become crime hot spots and take away the value of nearby properties, Rokakis told the Journal Monday.
Leveraging $75 million to raise $150 million for demolition can have a significant impact, he said. Local governments don’t have dedicated revenues to go to demolition and face limited budget revenues overall from less state and federal support and declining property tax collections, he said.
“I think the Attorney General is putting together a program that will benefit everybody because he’s making the program available statewide,” he said. “He is the only attorney general in the country that has stepped up to do this.”