Land banks are back in the conversation at the state Capitol.
After a bill Sen. Julia Kirt proposed on the subject failed to leave committee this past legislative session, the Senate minority leader held an interim study on September 15 to analyze how Oklahoma could use land banks to address vacant and abandoned properties across the state and increase the state’s affordable, available housing.
Kirt and housing experts contend that land banks could be a tool for the state, but are not the end-all solution to the nearly 85,000 affordable housing unit deficit; Kirt said they could be a first step.
Land banks
Land banks are quasi-governmental entities that include private sector businesses and identify property, often problematic property, suitable for development or refurbishment. They have the power to put vacant, abandoned and deteriorated properties back to use.
A land bank’s primary purpose, according to the Center for Community Progress, is to acquire properties considered to be blighted and temporarily hold and manage them until the property is transferred to a new owner, typically for development.
Kirt said she took interest in land banks after repeated phone calls from a constituent who lived next to a property that had been boarded up for more than a decade and had squatters living in it.
“This is a huge expense to our communities for police and fire response,” Kirt said. “It’s a drain on our neighborhoods in terms of safety, and it can be a real challenge for property values.”
Beyond providing a path for developers to increase the state’s affordable housing, Kirt told Oklahoma Watch the interim study was to address the vacant properties specifically in her district.
She said it’s something valuable for cities.
“A land bank would be a valuable tool for a city to put these properties into use and start generating some revenue,” said Katrina Washington, the executive director of Neighborhood Housing Services Oklahoma, who spoke at the interim study.
Twenty other states have implemented land banks in some capacity to address affordability and property value. Land banks can also increase development in rural areas by allowing county governments to be eligible land bank jurisdictions.
Gregory Reading, with the Absentee Shawnee Housing Authority, said some employees drive 45 minutes or more out of the city to find affordable housing.
“I like to call this the missing middle housing problem,” he said. “Out in our rural communities it’s pretty simple. Our workers want to live where they serve, but the infrastructure and labor cost leave the local builders unable to meet that demand.”
He said local builders aren’t interested in the lots because clearing the title can cost more than the land is worth.
“This bill isn’t the government playing developer,” he said. “It’s the government getting out of the way by clearing legal obstacles so builders can actually build.”
The National Housing Conference’s policy guide described land banks as a powerful tool for local jurisdictions facing problems on both ends of the housing spectrum, such as Oklahoma's abundance of vacant units and shortage of affordable units.
Oklahoma’s deficit
The state has more than 220,000 vacant housing units, including nearly 39,000 available for rent, according to data from the Oklahoma Housing Finance Agency’s Housing Needs Assessment.
Data from the National Low Income Housing Coalition shows that Oklahoma has a shortage of 84,125 affordable, available units for low-income renters.
The housing paradox is an example that Angie Barker, an attorney and Realtor, used when discussing the need for land banks at the interim study.
“Vacant, tax-delinquent property is a resource, a vital resource that we have that is just sitting idle,” Barker said. “This legislation is going to be that legal tool that lets whatever community it's in turn that problem property into a profitable and productive resource.”
Barker said the proposal would matter to Oklahomans who need affordable housing as well as municipalities, nonprofits and developers.
David Chapman, an Edmond real estate broker and professor at the University of Central Oklahoma, said land banks can be useful, but development costs go beyond the land.
“We have an income problem in Oklahoma,” Chapman said. “There just isn’t a ton that we can do to drive down the price because of the fixed costs that are upon us.”
Chapman said permitting, planning and other bureaucratic tasks are high costs for developers, leading him to be skeptical of involving the government in the private market.
Barker said the land bank proposal includes accountability measures to dispel concerns about government overreach.
While the interim study analyzed land bank effects and implementation, policymakers, Realtors and developers agreed more work is needed.
“I don’t think it’s going to be a widespread transformational change, but I do think it’s one tool among many that we need to be doing,” Kirt said.
Oklahoma Watch, at oklahomawatch.org, is a nonprofit, nonpartisan news organization that covers public-policy issues facing the state.
