Now in Legal Rebels:
Posted Oct 13, 2011 12:06 pm CDT
In Cleveland some banks are losing so much money holding onto run-down foreclosures that they are bulldozing the properties and giving them away.
The properties are turned over to the Cuyahoga County Land Reutilization Corp. under a 2009 Ohio law creating land banks, the Washington Post reports. The Cuyahoga land bank puts the properties to good use with funding from interest on penalties paid for delinquent real estate taxes.
Currently the Cuyahoga land bank acquires about 100 properties a month. Some parcels have been sold for just a few cents to churches or hospitals that want to expand. Others are being redeveloped for rentals, rehabbed for sales, or turned into community gardens, the story says.
Other states are passing or considering similar laws, including New York, which approved its measure this summer.
The Post interviewed Emory University professor Frank Alexander, who said land banks have existed for decades. Until recently, they were small organizations that acquired land through tax sales and dealt with only a few properties at a time. Cuhagoa’s land bank is one of the most productive in the country, he said.