40 towns join forces to create land bank

Analysis shows blight is costly for municipalities in county

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The proliferation of boarded-up windows, crumbling porches and vine-covered walls in once-booming steel towns doesn't begin to tell the whole story.

A fuller picture comes into focus in an analysis of how much blighted, abandoned and tax-delinquent properties cost the towns in which they are located. The report was commissioned by the Steel Valley, Turtle Creek Valley and Twin Rivers councils of governments, which represent 40 municipalities in Allegheny County.

"There were a lot of takeaways from that analysis," said An Lewis, executive director of the Steel Valley COG. "One of the big ones was blight is enormously expensive."

The analysis, presented in September, found 20,077 vacant lots and 7,158 parcels with blighted structures that cost local governments more than $10.7 million a year in direct municipal services, such as police, fire and code enforcement. They also account for nearly $8.7 million in lost annual tax revenue. But the biggest drain was on neighboring non-blighted properties, which the report found suffered a total loss of between $218 million and $247 million in property values. At the time of the study, the councils represented 41 municipalities; West Mifflin withdrew from the Steel Valley COG last year.

The findings prompted the three COGs, called the "Tri-COG Collaborative," to begin putting together a draft plan, expected to be finished in June, to establish a land bank for member municipalities that opt to participate.

A state law passed in 2012 allows municipalities with a population of 10,000 or more, or consortiums of smaller municipalities that together add up to more than 10,000 residents, to set up the public agencies, which are tasked specifically with acquiring, maintaining and returning problem properties to productive use, either through direct sales, transfer or leases.

PG chart: Allegheny County Councils of government
(Click image for larger version)

"We are studying land banks across the U.S.," said John Palyo, executive director of the Twin Rivers COG. "While the law is new to Pennsylvania, it's not new for the country."

Though Westmoreland County established a countywide land bank, Mr. Palyo said the longstanding relationships formed by the councils of governments, intended to foster shared services and governmental cooperation, make them a natural framework in Allegheny County.

And though a proposal to establish a land bank in Pittsburgh has bogged down in controversy, mainly over whether city council will have the ability to sign off on individual property dispositions, outlying towns that have long struggled with declining population and escalating blight see it as a promising new tool.

"We're very interested in the land-banking initiative. We have a lot of vacant property. We have a lot of tax delinquency," said Ian McMeans, borough manager of Homestead, which had a population of 20,452 in the 1920 census but now numbers about 3,185 people. "The land bank is a significant opportunity to address blighted properties, and it's an avenue that wasn't available to us in the past. We're very excited about the opportunity to utilize it ... to aid in the further revitalization of our communities."

Though critics of Pittsburgh's proposed land-bank legislation have characterized it as a mechanism to hand properties in struggling neighborhoods to wealthy developers, Ms. Lewis said municipalities represented by the COGs have expressed keen interest in the idea.

"We've not encountered those same issues," she said. "We've made a point of reaching out to our municipalities in many ways and engaging them in the discussion. For the most part, there has been nothing but positive feedback."

Mr. McMeans sees promise in turning vacant and abandoned lots into rain gardens, bioswales and other "green infrastructure" to aid in stormwater management. His concerns are mostly logistical, such as how many staff members will be required to keep track of the land bank's inventory.

"However this land bank comes together, you're going to have to have staff just to do property maintenance," he said.

Land banks can set priorities and can proactively acquire and market property, rather than wait for a buyer seeking a particular parcel through a treasurer's or sheriff's sale, proponents say.

"The land bank act designs an entity that is about managing these vast inventories of abandoned properties that don't have a market," said Irene McLaughlin, a Pittsburgh attorney and mediator who works as a consultant with the Housing Alliance of Pennsylvania, an advocacy coalition that is supporting land-bank initiatives across the state. "Municipalities were never designed to be a player in the real estate market."

Though both Ms. Lewis and Ms. McLaughlin said land banks are by no means a "magic bullet," they do have some inherent advantages.

"It's really based on the powers and procedures that already exist except for the ability to discharge public debt on property," Ms. McLaughlin said. "A land bank board does have the ability to discharge and extinguish its own tax charges and liens."

Under state law, land banks can finance their operations through bonds, grants or loans from government or private sources, rents or lease payments, property sales, investment income and property "tax-recapture" through agreements with local governments or school districts, among other means.

They also can pursue "quiet title" court actions on multiple pieces of property at once to establish ownership of land and remove other claims, though land banks are specifically barred from exercising eminent domain.

Mr. Palyo stressed that the plan finished in June will be a draft that will be shopped around to towns to solicit input.

Many details, such as how to apportion representation on the land-bank board among what could be more than three dozen participating municipalities, also remain to be decided.

"Once the documents are developed, we'll go back on tour, visit our communities and collect feedback," Mr. Palyo said.

Robert Zullo: rzullo@post-gazette.com or 412-263-3909. Twitter: @rczullo.

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