Cuyahoga County Land Bank Rebuilds Neighborhoods, Thanks to New Financing Sources
- Sep 12, 2011
On Aug. 29, the Cuyahoga County Land Reutilization Corporation, also known as the Cuyahoga County Land Bank, received approval to change its source of funding.
The land bank works with cities, lenders, government units or individual property owners, acquiring houses and businesses that have been abandoned or are in foreclosure and returning them to productive use. Together with partners, it builds up neighborhoods by tearing down dangerous properties and also maintains abandoned and vacant homes until owners are found, offering a pressure relief valve to Cleveland’s Housing Court. It finances programs through federal grants that allow new family homes to rise on lots where eyesores previously stood, and razes properties choked by weeds, cars on blocks and other junk to make way for green space. It also helps fill financing gaps as part of its mission to promote stabilized homeownership.
In order to pay its demolition bill, it struck a deal with lenders, offering to take their worst houses if they pay to take them down. Lenders pay $3,500 to $7,500 per house. This year, Fannie Mae, Bank of America, Citibank and Wells Fargo will help pay for half of the Land Bank’s 700 scheduled demolitions. More than 340 neglected homes have been demolished, more than 50 have been renovated with the help of private developers, and 1,040 properties have been acquired so speculators can’t rent them out or dump them for a profit without correcting violations.
For its first two years, the agency relied on delinquent taxes ($4 million in 2009 and $6.7 million in 2010). Under the newly approved plan, the land bank will obtain funding from both deliquent property taxes and interest and late fees, and will drop a requirement to pay the county more than $200,000 each year.