Two years after the passage of the legislation that made it possible, the Wilmington Neighborhood Conservancy Land Bank is now building an inventory of blighted and abandoned city properties and is looking for buyers who are eager to transform blocks, even neighborhoods, that have fallen on hard times.
The land bank, a nonprofit entity whose board includes bankers, housing professionals and representatives of Wilmington and state government, is taking on a mission that the city hasn’t handled particularly well over the years – preventing further deterioration of a stock of vacant, blighted homes and lots and finding new owners who will restore those properties to productive use.
Funded initially by $1.5 million from the city and $645,000 from the state’s Strong Neighborhoods Housing Fund, the land bank is getting a big boost through a $1 million grant from Barclaycard US that will be used to acquire properties and maintain them until new owners are found.
“The city has not supported this function very well,” Mayor Mike Purzycki says, “and others, like Barclaycard, see the potential for the land bank to do it better.”
“It’s more than we’ve ever given before,” says Jocelyn Stewart, Barclaycard US Community Reinvestment Act officer and a member of the land bank’s board of governors. “We believe this can make a difference – citywide.”
The first U.S. land bank was established in St. Louis, Missouri, in 1971, as a way to battle the blight caused as urban industries collapsed and city residents moved to the suburbs. But the concept didn’t take hold in a big way until the real estate market collapse and ensuing foreclosure crisis of a decade ago.
There are now about 200 land banks nationwide, says Christian Willauer, executive director and currently the sole employee of the Wilmington land bank.
Willauer, who formerly led Cornerstone West, the redevelopment arm of the West End Neighborhood House, joined the land bank in February and has spent most of the past eight months doing the behind-the-scenes work needed to get the operation going – raising money, securing insurance and developing a system for managing the properties. And there’s much more of that to be done – like developing procedures for selling the properties it acquires and arranging financial and other supports for buyers.
Currently the land bank’s inventory has 50 properties, a mix of structures and vacant land, most of them transferred from the city’s stock of abandoned properties. By year’s end, Willauer says, the city expects to have transferred 136 properties to the land bank. That represents about 10 percent of the roughly 1,400 vacant and blighted parcels in the city. By the end of next year, Willauer expects the land bank’s inventory to stabilize at around 300 properties.
Look here for a listing of properties in the Wilmington Neighborhood Conservancy Land Bank’s inventory.
As the city acquires these properties, typically following foreclosures and the lack of a buyer at a sheriff’s sale, it will transfer ownership to the land bank, which becomes responsible for their upkeep – boarding them up, mowing the grass, and so on – until a buyer is found.
Typically, Willauer says, there are four options for a property: demolition, sale to a private buyer for rehabilitation, sale to a nonprofit housing organization like Habitat for Humanity for rehabilitation, or use by a community organization, often for a pocket park or neighborhood garden.
“We’ll be working with nonprofit affordable housing developers,” she says, “but that’s not enough to bring back all of Wilmington’s vacant properties. There will be a large direct buy [to individuals and couples].”
The land bank is a month or two away from starting to sell off its holdings, Willauer says. Before doing so, it will have to develop written specifications and regulations so all transactions are handled in a similar manner. Basic rules will likely include requirements that buyers can’t owe the city any money for back taxes or delinquent utility bills, and that they will have to meet the rehab specifications within 12 months or risk having to turn back the property to the land bank. “There will be some clawback provisions to hold the buyer accountable,” she says.
Homes will most likely be sold for $2,000 to $5,000, with the expectation that buyers will spend $100,000, perhaps more, to make them habitable. “They’re definitely fixer-uppers. They’re not move-in ready. Many will need new electric, new heat, new plumbing,” Willauer says.
But those needs don’t mean the homes are broken-down shells. “They’re not falling down. They’re Wilmington’s traditional rowhomes. Some have two bedrooms, some have four. Some are small, some are quite large,” she says. What they tend to have in common is that they’re in areas where traditional real estate buy-and-sell mechanisms have been failing. As a result, “they need a more targeted approach to get back into use,” she says.
That’s where Purzycki sees the land bank operating with more effectiveness than the city has in the past. “You’re taking a responsibility away from agencies that have multiple tasks and giving it to an agency that has one focus: redevelopment and conveying property to developers,” he says.
In the past, the city’s Real Estate and Housing and Licensing and Inspections departments have split responsibilities for vacant properties, according to city spokesman John Rago, with Real Estate and Housing tending for those owned by the city and L&I handling those in private hands. Licensing and Inspections would bill property owners for any necessary maintenance or stabilization work on their properties, he said.
Although the city will not receive payment from the land bank for transferred properties, it expects to save money because the land bank will now be responsible for maintenance, he said.
The land bank will not be involved in foreclosure procedures, Willauer says. The city will continue its current processes, with its code enforcement officers identifying blight issues and L&I identifying and tracking vacant properties. If a property is abandoned, or its owner owes debts to the city, it can be taken to a sheriff’s sale, a process that takes about six months, Rago says. In the future, most city properties that do not attract buyers at a sheriff’s sale will be transferred to the land bank.
The land bank, Willauer says, will use those properties to offer housing opportunities to city residents who are now renters and to those who might have lost their homes during the foreclosure crisis.
“We’re not looking for gentrification. We’re interested in growing wealth,” says Stewart, who hopes the Barclaycard grant will serve as a catalyst for contributions by other financial institutions and businesses in the city.
Agencies like Habitat for Humanity provide counseling for first-time homeowners, and the Delaware State Housing Authority offers a variety of mortgage products for first-time and lower-income buyers, Willauer says. The land bank will partner with these and similar agencies to help buyers secure loans and identify contractors to do the rehab work on their homes.
One collaboration with Habitat for Humanity of New Castle County has already begun. Habitat has transferred ownership of a structure it owns on East 22nd Street in the Prices Run neighborhood to the land bank, which had previously been given the adjoining structure by the city. While Habitat develops plans to build six new homes on the block, the land bank is maintaining both buildings. When Habitat is ready to build, the old structures will be demolished. The whole process should take about a year, says Kevin Smith, Habitat executive director.
Purzycki’s administration has identified the West Center City area as the initial focus of its Neighborhood Stabilization Initiative, and the mayor says the city will soon be taking a number of properties in that community to sheriff’s sale. The land bank could then assemble adjoining parcels into a package for redevelopment. In some circumstances, Willauer says, the land bank would negotiate with an owner to purchase property needed to create a contiguous package for redevelopment.
Sometimes properties acquired by the land bank will not be suitable for residential redevelopment but can be used for community benefit, Willauer says. As an example, she points to a community garden recently created by Habitat for Humanity on a narrow lot on the corner of Ninth and Spruce streets in Wilmington.
As the land bank begins the cycle of acquiring, packaging and selling properties, multiple benefits can be expected, Willauer says.
Vacant properties are magnets for crime, and strain city services through disproportionate numbers of calls for police, fire and code inspectors, she says. Putting new owners into these homes not only reduces the need for city services but it strengthens the city’s tax base and builds neighborhood pride.
In addition to neighborhood revitalization, the potential economic development impact could be significant. “There are going to be a lot of opportunities for contractors to grow their businesses, so everyone will be able to participate,” Willauer says.
If the 140 properties the land bank expects to hold by the end of the year are sold to owners who spend an average of $100,000 on renovations, that’s up to $14 million going to local contractors and retailers. And that means more jobs for city residents.
For example, Integrity Construction, a subsidiary of Interfaith Community Housing of Delaware, has contracted with the land back to board up and maintain vacant properties. Omar Faust, Integrity’s manager, is using that contract for a project called Home Work, which trains city residents in construction skills and prepares them to secure better jobs. “They make money while they’re with us, and they’re ready to get higher skilled jobs when they finish training,” he says.
Nationwide, Willauer says, many neighborhoods that were in decline have been turned around following the creation of land banks. Among the cities where land banks have been created are Philadelphia, Chicago, New York City, Indianapolis and Greensboro, North Carolina.
Stewart points to Syracuse, New York, as a good example. With a population of just over 140,000, Syracuse is about twice the size of Wilmington. In the nearly five years that the Greater Syracuse Land Bank has been operating it has acquired 1,425 properties, sold 495 and demolished 185 others while generating an additional $884,000 a year in property tax revenues.
Barclaycard sees the potential for Wilmington’s land bank to have the same sort of impact, Stewart says.
“There are a lot of us here who really believe in Wilmington, who love this city and will rally behind it,” she says.
