Washtenaw County commissioners reconsider land bank
Washtenaw County’s Board of Commissioners have revived a proposed land bank that would give the county additional options for dealing with the continued wave of property foreclosures. The board had voted to dissolve the short-lived land bank in March over funding and other issues.
The board, meeting as the Ways and Means committee, this past Wednesday voted to send forward a motion supporting the re-establishment of the Washtenaw County Land Bank Authority. But it omitted language on funding until basic questions on how a land bank will be governed are answered.
Although the vote was 9-2 to approve the motion, many commissioners expressed a desire to have a clearer plan in place and they want to see how a governing body might look at their Aug. 4 meeting.
County Treasurer Catherine McClary said there were 26 foreclosures in 2008, 106 last year, and 515 this year. Her office currently has 391 properties it must auction off to the highest bidder starting this month.
The land bank was originally established last July at McClary's urging to take possession of some of those properties and resell them. Bylaws and a draft of policies had been written, but many basic questions remained unanswered, including how the program would be funded.
When the issues came in front of the county board in March, commissioners opted instead to dissolve the land bank.
McClary conceded the process was rushed and feels she failed to fully inform the board of how a land bank could help the county.
“I did a poor job of explaining the benefits of a land bank,” she said. “By preventing blight and by managing abandoned property, you can increase or stabilize property value in surrounding properties. I think the communities, especially in eastern Washtenaw County, now see the value in that and I think they have conveyed it to the board.”
McClary said a land bank can receive tax breaks, qualify for brownfield credits, apply for bank loans, arrange rent-to-own agreements with homeowners who have foreclosed on their homes and sell sidelots.
“Land banks can do a lot of things and have a lot of special tools that are built into sate law,” she said.
Though the board voted 9-2 to approve the motion - Leah Gunn and Barbara Bergman voted against it - commissioners raised a number of issues in the nearly hour-and-a-half discussion.
Among the primary concerns was funding.
McClary proposed a dedicated source of funding through revenue collected on foreclosures. When a property turns delinquent, an interest rate of 1 percent per month is applied to the parcel and credited to the county’s delinquent tax revolving fund. That money is earmarked for foreclosure prevention.
Once a property is in foreclosure, state law adds another .5 percent, which McClary suggested as the base funding source. That arrangement would have provided an estimated $668,000 this year.
Several commissioners pointed out that figure is insufficient to run a land bank, but McClary said additional revenues are available through grants, bank loans, the U.S. Department of Housing and Urban Development, Michigan State Housing Development Authority and foundation funding.
The land bank also receives revenue from the sale of property. Rolland Sizemore said representatives from Ypsilanti Township and Superior Township had discussed ideas for providing their own funds at a meeting earlier in the day.
Commissioners also raised concerns about the cost of running a land bank. Among those costs are acquiring a property, its maintenance, rehabilitation and demolishment. McClary estimated demolishing a home at $10,000 and said the price of acquiring a home could range anywhere from $1 to tens of thousands of dollars for bigger properties.
Gunn said those figures could be much higher.
“I think the land bank is in going to get itself into a whole lot of trouble,” she said, pointing to problems the Genesee County Land Bank is having with owning thousands of foreclosed properties in Flint.
McClary said the land bank could pick and choose which properties it acquires, and the bulk of those would likely be tax foreclosures, not mortgage foreclosures. She also pointed out that tax foreclosures are spread throughout the county, while the majority of mortgage foreclosures are in the county’s eastern half.
Conan Smith fully supported further re-exploring the concept.
“My personal preference would be to move forward with governance, allow the strategy to develop and then, at a later date, decide if we want to fund it,” he said. “I think that strategy comes about when you have a board in place and a body empowered to begin that process.”â€¨
Kristin Judge pointed out that 76 percent of the county’s revenue comes from property value, and said the land bank could prove valuable.
“The treasurer has gone above and beyond to set up the land bank,” she said. “Let’s set it up, give them the appointed people, let’s do our part first, and if it doesn’t work, let’s say it doesn’t work.”
As the discussion came to a close, Gunn and Bergman were still not sold.
“I’m having trouble voting for a shell,” Bergman said. “To put an organization out there with no funds is creating a shell, and that sounds quite political to me. I can’t vote for an organization that is a shell.”
During public comment, Ypsilanti Township Clerk Karen Lovejoy-Roe blasted Bergman for a phone conversation they had earlier in the day in which Bergman had indicated she was not inclined to help out Ypsilanti Township through the land bank.
Lovejoy-Roe said Bergman told her 'You're not going to like what I have to say, but, frankly, I don't want to do anything to help Ypsilanti Township.' Lovejoy-Roe said Bergman then brought up the township's lawsuit against the county told her to bring a check for $500,000 to the meeting to cover costs.
Bergman confirmed she did ask Lovejoy-Roe to bring a check. She said funding is not available for a land bank, and Ypsilanti Township had depleted $1 million of the county's and their own funds on legal costs. She said Lovejoy-Roe did not express concern for the county's housing situation as a whole, but solely for Ypsilanti Township.
"I was not particularly pleasant to her, and I was probably less pleasant than I should have been. But I'm going to stand by the fact that my sympathy for Ypsilanti Township is quite limited," she said.
Tom Perkins is a freelance writer for AnnArbor.com. Reach the news desk at firstname.lastname@example.org or 734-623-2530.