Land bank limbo

Nov 30, 2005 at 12:00 am

A proposal to create a land bank authority in Detroit has been before City Council since spring. But with the council in recess until next year (when four newly elected members will be seated), disagreements over the makeup of the authority’s governing board, and staunch opposition to the entire idea from at least one council member, the fate of that plan is uncertain.

The idea behind a land bank is to create a repository of vacant, abandoned and tax-delinquent properties that can be cycled quickly back into productive use. Derelict property is a big problem in Detroit — close to 40,000 of the city’s 400,000 parcels of land have been claimed by the city, state or county for nonpayment of taxes.

Among other advantages, the proposed land bank would have the legal authority to hasten the title-clearing process — often lengthy for tax-reverted properties — and bundle parcels to create a more attractive package for developers. Unlike the city, which sells even derelict property at market value, land bank officials can set whatever price they want. Also, land-banked property could automatically qualify for state environmental rehabilitation credits, making deals even more attractive to developers. It’s not a panacea, but advocates say it’s a powerful tool with the potential to clear a path for much-needed community redevelopment.

When the current proposal came to council, President Pro Tem Kenneth Cockrel Jr. said he thought the issue would be voted on by summer’s end. Even more optimistic was Cockrel’s prediction that, along with a thumbs-up from council, the plan would also quickly get the necessary approval from the state Legislature, allowing board members to be appointed, bylaws drafted, funding secured, and as many as 5,000 properties transferred from the city to the land bank by year’s end.

So much for high hopes.

Cockrel says that for council members who support the proposed land bank, the sticking point has been the makeup of the board that will govern the authority. The council, Cockrel says, fears putting control of the land bank in the hands of Detroit Mayor Kwame Kilpatrick.

“I just have a concern that if this thing is set up in such a way that the mayor has all the appointments, you make a Frankenstein’s monster that City Council has no control over,” Cockrel says. “You need something that’s accountable to the council, not just the mayor.”

The council and the Kilpatrick administration are negotiating how many board members would be appointed by each side. But election season, coupled with the budget crisis, has pushed the land bank to the back burner. All parties say they’re close to reaching an agreement on that issue, but Cockrel, who favors a seven-member board with three council appointees, three mayoral appointees and one member appointed by the mayor but approved by council, says there’s a lot of work to be done before the proposal can be voted on.

And that’s not the only thing standing in the way, Cockrel says. Councilwoman JoAnn Watson has voiced strident opposition to the land bank, saying she favors something known as a land trust.

In a land trust system, property is held by a nonprofit organization that can lease land to a developer but retains ownership. Future residents can buy the housing, but not the land, keeping prices down. Land trusts, experts say, have been used to keep property affordable in communities where housing prices have soared.

But that’s not where Detroit needs help.

“There are very few neighborhoods in Detroit where the prospects of gentrification are so strong that the need to preserve affordable housing is a crucial challenge,” says George Galster, professor of urban affairs at Wayne State University. “I think that the fundamental choice between the two options is based on, one, political control, and, two, efficiency.

“As to the power dimension, the distinction that’s being fought over is the land bank, which would have a variety of members who would not be directly appointed by city council, versus the trust, which would be a nonprofit organization that could have a board appointed by council.”

But the real focus of debate, Galster says, should be on how to efficiently get idle land developed. And to that end, some say, the two approaches aren’t mutually exclusive.

Framing the question as land bank vs. land trust is the wrong way of thinking, says Alan Levy, director of Detroit’s Office of Neighborhood Commercial Revitalization.

“We see the two as very different tools,” Levy says. “The administration is fine with looking at a land trust, but it doesn’t answer the question of whether we should have a land bank.”

The land trust, for example, must go through the same channels as any nonprofit seeking to acquire tax-reverted properties from the city.

Galster says that a neighborhood like the east waterfront district, which is targeted for redevelopment, would be a prime spot to pilot a land trust that would keep property values down and encourage neighborhood diversity.

“There’s room for any number of sound public policies regarding vacant land in Detroit,” says Angela Zemboy, executive director of Community Legal Resources, which provides free legal support to local nonprofits.

But that isn’t how land trust advocates see it.

Watson, who didn’t respond to requests for an interview, has said that she prefers a land trust because it would keep control of property in the hands of Detroit residents. Watson has not provided council with a plan to facilitate a citywide land trust.

Typically, land trusts are created within smaller communities or in undeveloped areas to conserve green space. A land trust on the scale that Watson is proposing has never been done — urban land trusts generally hold between 20 and 200 properties.

“Land is power,” Watson said at a recent council meeting discussing the issue. A land bank, she said, would give too much freedom for outside developers to acquire city property. The advantage to her plan, she says, is that current Detroit residents would remain in control of the property and how it’s developed.

That’s a notion nonprofit advocates resent — some say that the inability to purchase derelict land outright would seriously hamper or end the nonprofit community’s redevelopment efforts.

Detroit City Council is in recess until after the start of the year, and only three of the five returning members — Ken Cockrel, Sheila Cockrel and Alberta Tinsley-Talabi — have voiced open support for the land bank. With four new members coming on board next year, advocates may have to make the case for the land bank from the ground up.

Which, says Zemboy, isn’t good for Detroit: “The time is now to deal with this issue.”

Nancy Kaffer is a Metro Times staff writer. Contact here at 313-202-8068 or [email protected]