National Land Bank Conference April 7, 2005

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National Land Bank ConferenceApril 7, 2005

• CLEVELAND A Case Study

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DISCLAIMER

• Currently not working at the City of Cleveland.
• Prior to April 2004 9 years with the Department
  of Community Development
• 5 ½ years as the Director
• 1 ½ years as the Assistant Director
• 2 years as the Multi-Family Manager

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HISTORY of Clevelands LAND BANK

• 1976 Original authorizing legislation
  established by the State of Ohio
• 1988 Major improvements made to the original
  legislation -- House Bill 603
• 1990 City convened County and local leaders to
  streamline the coordination between the City and
  the County

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1988 KEY FEATURES OF HB603

• Established a funding source 5 of all income
  collected from delinquent taxes - to cover the
  costs of the foreclosure process
• Allowed for abatement of delinquent property
  taxes when a parcel is placed in the Citys Land
  Bank
• Permitted Gift Deeds in Lieu of Foreclosure

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1990 CLEVELANDS LB IS ACTIVATED

• City convinces County to re-orient its
  operational focus from most valuable individual
  property (mostly in the suburbs) to the
  elimination of bad debt (mostly abandoned
  properties in the City)
• Clevelands Mayor kicks off new housing initiative

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Clevelands New Housing Initiative

• Cheap land - 100 for a buildable lot
• 15 year, 100 residential Tax Abatement
• 0, deferred 2nd mortgages
• Annual pool of capital for projects (i.e.,
  development subsidies and infrastructure grants)
• THE RESULT

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VACANT LOTS THAT ONCE LOOKED LIKE THIS
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NOW LOOK LIKE THIS
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And this
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Cleveland built subdivisions
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and townhouses
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and custom homes
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and new multi-family
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and converted obsolete schools, warehouses and
factories into housing
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and built new for sale houses adjacent to
converted condos
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and built new for sale condos adjacent to
historic adaptive re-use rental properties
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THE TOTALS 1991-2004

• New Single Family 3,888New Neighborhood
  Multi-Family 998New Con Downtown
  430 Sub-Total New Con 5,316Neighborhood
  Re-Use 477Downtown Re-Use
  2,514 Sub-Total Adaptive Re-Use 2,991 TOTAL
  NEW HOUSING UNITS 8,307

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IMPACT on Cleveland

• Housing Percentage
• Units Lost Change
• 1960-1970 - 18,861 -6.6
• 1970-1980 - 24,496 -9.3
• 1980-1990 - 15,246 -6.3
• 1990-2000 - 8,467 -3.9
• Change in Housing Units 1960-2000 From 282,914
  to 215,844

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IMPACT on Cleveland

• Population Percentage
• Change Change
• 1960-1970 -125,171 -14.3
• 1970-1980 -177,057 -23.6
• 1980-1990 - 68,206 -11.9
• 1990-2000 - 27,213 -5.4
• Change in Population 1960-2000 From 876,050 to
  478,403

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POPULATION CHANGE 1990 to 2000Cleveland vs.
Similar Cities

• St. Louis -12.2
• Buffalo -10.8
• Pittsburgh - 9.6
• Cincinnati - 9.1
• Cleveland - 5.4
• Milwaukee - 5.0

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OTHER INDICES OF PROGRESSAppreciating Tax
Valuations

• Cleveland County
• 1999 20.4 12.8
• 2002 13.8 9.3
• Average

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Demolitions vs. New Housing Units

• YEAR Demos New Units
• 1991-97 (Per Yr. Ave.) 684 401
• 1998 785 435
• 1999 713 604
• 2000 774 647
• 2001 702 414
• 2002 747 1,454
• 2003 569 847
• 2004 673 1,103

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Key to Redevelopment LAND

• 82 of all new construction is on City land that
  is processed through the Citys Land Bank Office
• NOTE Scale is 5,000-6,000 vacant parcels
• Staffing is 3 full-time persons
• Annual activity is 100-250 parcels in
• and 250-500 parcels out

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LAND BANK SOURCES

• FORECLOSURE Approximately 3-4 year process
  that begins in the Auditors Office and concludes
  with the transfer of property to the Citys Land
  Bank.
• GIFT DEED IN LIEU OF FORECLOSURE As simple as
  signing the forms. However, the property must be
  free and clear of private liens

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Obstacles Cleveland Has Faced

• 1. Tax Lien Sales
• Shift in priorities for the County

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Parcels Offered for Sheriff Sale
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LIMITATIONS TO CLEVELANDS LANDBANK

• Almost exclusively used to hold land very
  limited use for buildings
• Foreclosure provisions are not strong enough
  should include the ability to take property where
  the public indebtedness exceeds the appraised
  value of the property, OR, in the words of the
  Abandoned Houses Work Group of Indianapolis

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From Reclaiming Abandoned Property in
Indianapolis

• The costs of abandonment need to be internalized
  by the owner so that these costs are not merely
  externalities (i.e., externalized costs) that
  accrue to the surrounding neighborhood and its
  people. The costs of abandonment must be
  directly assigned to the owner, and therefore,
  have the potential to influence the owners
  behavior.

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MAJOR LESSON LEARNED

• Institutionalize the initial civic collaboration
• Track monitor results
• Adjust/correct for non-performance
• Report regularly to the public
• Determine modifications, as needed

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COME SEE US IN CLEVELAND

• Linda Hudecek, Sr. Vice-President
• Neighborhood Progress Inc.
• 1956 West 25th Street
• Cleveland, Ohio 44113
• 216-830-2770
• lmh_at_neighborhoodprogress.org