Plagued by the worst plunging property values in the metro region, DeKalb County is launching an ambitious program using federal cash to take over foreclosed and vacant properties in struggling areas.
DeKalb County is moving to create a land bank of foreclosed property and prime it for redevelopment. The bank could help put vacant homes and unused commercial properties into the hands of neighborhood associations or developers, clearing the way for new uses.
DeKalb had the third-highest number of foreclosures in the state over the past two years. The effect has been a 13 percent drop in property values countywide, and neighborhoods pockmarked by empty homes
“The empty houses, it’s endemic,” said Maria Rossoto, a public health writer who is part of a Belvedere Park initiative to encourage more healthy lifestyles in central DeKalb. “If you’re walking down the street and half the lots are vacant or foreclosed or overgrown, you can’t exactly focus on trying to exercise.”
The hope is the land bank authority will spark redevelopment in the county. The land bank system is used by just 11 other communities in Georgia, all attempting to combat the economic woes brought on by foreclosures.
Generally, a land bank functions similar to a typical bank, except it holds property instead of money. It gets those deposits by paying properties’ outstanding tax bills, receiving donations from government and owners, and even buying property at fair market price.
DeKalb plans to pay for properties using money from the Neighborhood Stabilization Program, an ongoing federal Housing and Urban Development project to help struggling areas. DeKalb plans to seek several hundred thousand dollars from HUD and will not use local money to fund the bank.
The County Commission voted this week to create a quasi-governmental agency to oversee the land bank. Decatur is expected to sign on to the project in the next few months. A board of directors and guiding policy will be established for the bank later.
“A land bank is not going to solve all our problems,” said DeKalb community development director Chris Morris, who headed the project to establish the bank. “But it is one tool to really get our neighborhoods back after suffering through this down economy and number of foreclosures.”
Not everyone is enamored with the idea of the government jumping into the real estate market. No matter how good the intention, the land bank is a risky proposition, said Kelly McCutchen, president of the Georgia Public Policy Foundation.
That investors are snapping up many of the vacant homes proves the market is working. DeKalb would be better served to use code enforcement and fines to make sure those properties don’t fall into disrepair and let those investors take the risks, he said.
“To me, it sounds like speculating,” McCutchen said. “Even if it’s a good investment, this is exactly the kind of thing that the private sector has the expertise to handle. It’s not appropriate to take this kind of risk with taxpayer dollars.”
The Fulton-Atlanta land bank was founded in 1994, but there were several years when the land bank was essentially dormant.
Since the late 1990s, though, the agency has cleared the title of about 510 properties from sheriff’s sales, selling them to nonprofits such as Habitat for Humanity, private developers and individual owners, Executive Director Christopher Norman said.
That value can be hard to assess in places like East Lake Terrace, a south DeKalb community whose neighborhood association inventory showed 98 vacant homes this summer.
The problem, according to association President Brenda Pace, is many of the homes are not in foreclosure. Instead, they have been sold for the price of their unpaid property taxes to investors who are now holding them empty, waiting for the homesales market to improve so they can resell them for a profit.
But the dark, unkempt homes invite criminals. DeKalb’s land bank would only work if it is set up to allow groups like the neighborhood association to take over those properties, she said.
“If you give the home to the community itself to rehab, then that’s one less problem home in our neighborhood,” Pace said.
For Rossoto, that could mean an extended community garden in Belvedere Park. Residents planted one last year on the back lot of Peace Lutheran Church on Columbia Drive.
The effort has grown to 40 plots and more people want to join. Razing a vacant house for a second garden or even a community park would add real value, Rossoto said.
“That would make the neighborhood feel safer and continue the positive renovation this neighborhood was undergoing before the housing market collapsed,” she said.
Some county leaders want the land bank to help boost economic development in DeKalb. The idea is to help clear a run-down building or site to help a developer plan something new, said Larry Johnson, the County Commission’s presiding officer.
Joscelyn O’Neil, a school library media clerk, said the land bank must help with both housing and businesses in her Greater Towers neighborhood, which sits just inside I-285 near Covington Highway.
Run-down businesses at the edge of the neighborhood scare away better investment, she said, the same way dilapidated houses run off good neighbors.
“I would hope a land bank would help position people who want to buy property at a reasonable rate and can stabilize our neighborhoods,” she added. “Otherwise, what’s the point?”
Foreclosures by county through July
Cobb: 7,705 (2011); 8,080 (2010)
DeKalb: 10,079 (2011); 10,557 (2010)
Fulton: 11,926 (2011); 13,688 (2010)
Gwinnett: 13,602 (2011); 14,317 (2010).
Source: Equity Depot
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