POTTSTOWN >> Land banking, a method of getting control of blighted properties and putting them into the hands of those who can revive them and put them back onto the tax rolls, is being looked at once again by borough council.
The issue was raised in the fall by Borough Manager Mark Flanders, who asked council’s permission to contact the school district and Montgomery County and see if they would be interested in exploring whether land banking could benefit Pottstown.
Having secured the interest of the school board finance committee, Flanders invited attorney Winifred Branton to Wednesday night’s council meeting to explain what a land bank is and how it works.
Perhaps the most important message about land banks is what they are not.
They are not, said Branton, a way for government to take private property through eminent domain.
A land bank can dismiss tax liens that may keep a property from being sold to a new owner, particularly if the liens are more than the value of the property.
Land banks also have the legal capability to negotiate the purchase of a property before it goes to judicial tax sale, Branton said.
Another unique aspect of land banks is that they are governed by a board of directors who can set the parameters for the property the land bank takes possession of and its final disposition.
That was something Borough Council Vice President Sheryl Miller was very interested in knowing.
She would like those to whom the land bank deeds property to be under restrictions not to turn it into another rental property in Pottstown.
“That’s one of the reasons I like working with Habitat for Humanity, because they hold onto the lease for 30 years,” Miller said.
Branton said there are ways to do things like that.
Blight comes with cost
Battling blight is about more than just keeping up appearances, Branton said.
It’s about money: Your tax money.
A 2013 study of 41 municipalities in Allegheny County found that blight was directly responsible for $10.7 million a year in direct costs to municipalities – costs that are ultimately paid by taxpayers.
They include things like police and code enforcement services.
And that does not account for unpaid taxes, fines, fees and other negative impacts abandoned properties have on a municipality’s bottom line.
Similarly, a 2010 study found that it costs Philadelphia $21 million a year to manage vacant lands.
Closer to home, Branton said roughly 10 percent of housing units in Pottstown are vacant. That’s about 1,000 units, she said.
As of November, the Blighted Property Review Committee had certified 60 properties in Pottstown as being blighted.
Other more recent studies have concluded that Pottstown has experienced more mortgage foreclosures as a result of the housing and financial crisis than any other municipality in Montgomery County.
Land banks may be one way to turn some of those figures around.
In fact while blight costs a municipality money, eliminating it generates revenue.
Eliminating blight reduces crime, particularly gun-related violence, improves health and drives higher tax revenue by increasing property value by as much as 30 percent, Branton told the Montgomery County Blight Summit, held in 2015 in Pottstown.
Later in 2015, Branton made a similar presentation to borough council, this time working with the Housing Alliance.
During that presentation, Branton said a land bank’s primary weakness is that although the state legislature authorized the creation of land banks, it provided no source of funding, as has been the case in other states.
As a result, in places where land banks have been implemented in Pennsylvania, they often are dovetailed into existing government agencies so as not to incur overhead and staff costs, and they often rely on grants and donations to pay the costs of acquiring property.
“It’s not unusual for a land bank to be overseen by a board but whose staff is the planning staff for a city or county, or part of a redevelopment authority,” Branton said in 2015.
This arrangement also helps to coordinate the purchase of “key” properties.
Despite this handicap, to date, 14 land banks have been established in Pennsylvania since the enabling legislation was enacted in 2012, many of them county-wide or city-wide, or combining multiple municipalities, said Branton.
“Land banks will not solve all your blighted property problems,” said Branton. “But they are one tool that can be used under the right circumstances.”
Councilman Ryan Procsal, who lives across the street from a blighted property on Walnut Street, said he believes land banking could help rehabilitate many properties in the First Ward he represents.
