Report: A land bank could increase affordable housing in Spokane, but there are some major hurdles

There’s a new proposal for one day helping to revitalize abandoned properties in the city of Spokane into affordable housing, but making it a reality would be complex.

The city has existing programs to deal with dilapidated properties, but a new report suggests that a land bank could eventually help ensure they become affordable housing, according to a presentation heard by the City Council on Thursday.

There are more than 250 active land banks in the United States, and their portfolios typically include vacant properties that were delinquent on property taxes, loaded with liens and unwanted by private buyers. A land bank is a quasi-public entity with the ultimate purpose of either rebuilding or cleaning up abandoned and rundown properties.

The report on the feasibility of a land bank in Spokane was commissioned in January by Spokane Neighborhood Action Partners, or SNAP, and conducted by the Center for Community Progress. Based in Michigan, the nonprofit’s primary objective is to help communities revitalize vacant and dilapidated properties.

The report was drafted as local leaders grasp for ways to build more affordable housing in a sizzling market with low apartment vacancy rates.

But the majority of land banks were formed after the Great Recession in 2008, in places facing starkly different challenges than Spokane, such as Detroit.

And there’s more than just one catch with establishing such a system in Spokane: Land banks like the one contemplated in Spokane aren’t authorized by Washington law, so if the city wanted to create one it would have to advocate for changes at the state level.

A land bank has special powers to acquire properties, erase their tax liens and clear their titles. When they sell a property, a land bank can choose the buyer based on their potential community impact, not just whoever is offering the most money.

“They’re able to sell, transfer properties based on the highest outcome and not necessarily the highest bid,” explained Kim Graziani, one of the authors of the report.

The buyer could be a community land trust, a private nonprofit separate from the land bank that typically secures the land, but sells the structure to homebuyers below a certain income level. The system would ensure the house remains affordable for several generations.

Before dreaming of a land bank, the report suggests the city focus on its existing enforcement mechanisms on abandoned properties.

The report stressed that a land bank is just one potential tool for a community seeking to address abandoned and rundown properties. It also advocated for measures to prevent properties from deteriorating in the first place, including enforcement of the city’s chronic nuisance and building ordinances.