Dayton Land Bank: what’s the exit strategy?

Back in the early nineties, the City was in possession of thousands of real estate parcels. A client of mine asked for a list, and was given a stack of pin-feed greenbar paper about 3″ thick.

All that real estate wasn’t generating property taxes, and it’s about to get worse with the city’s new plan to “landbank” property according to today’s paper

Dayton plans to acquire 1,000 properties this year

By Joanne Huist Smith Staff Writer Sunday, May 11, 2008

DAYTON — The city of Dayton plans to aggressively snatch up properties for land banking, with a goal of acquiring up to 1,000 properties this year.

The eventual goal: reduce the supply of excess housing in the city, identify potential areas for new development while creating parks, neighborhood squares even nature preserves.

For Dayton City Commissioner Nan Whaley, its a tool to improve quality of life here.

“I look at land banking as the city controlling its destiny,” she said. “We need to talk about where we are going. We have wonderful opportunities.”

Targeted properties have been abandoned by owners, who do not pay their property taxes. In many cases, the city has had to board up the structures and mow.

“Were already maintaining these properties,” Whaley said. “We might as well control them.”

The city currently has more than 10,000 vacant housing units in more than 3,800 structures. It would cost an estimated $6 million for the city to demolish its current 800 nuisance structures and an additional $25 million to bring down the entire inventory of vacant structures.

“We cant sit around and do nothing,” Whaley said. “I think, for all neighborhoods, this is a win.”

Typically, Dayton has only used land banking to acquire properties for specific developments or as part of the citys Adopt-a-Lot program, which enables homeowners to buy land next to theirs.

That practice has now changed.

“Were really talking about being aggressive in acquiring vacant properties,” Deputy City Manager Stan Early said, in a presentation to the City Commission on Wednesday, May 7.

On April 17, the city bought 125 state, forfeited properties for land banking at a total cost of $4,000. Most of the properties were bought for $25 each, said Whaley, adding that the lots are scattered around the city.

A quasi-government authority, composed of city staff and volunteers, would hold the properties, but input from the citizens of Dayton would determine future reuse. There is no time frame set to establish this authority, but Whaley said she expects it to happen quickly.

The city plans to put the properties in the Real Estate Acquisition Program, enabling Dayton to hold on to them up to 15 years, tax free. To qualify for REAP under Ohio Revised Code, property taxes must be certified by the county as being at least two years delinquent, said Aaron Sorrell, Daytons manager of housing and neighborhood development.

Thirty properties went through REAP in 2007 and an additional 150 to date this year. Those numbers represent just the tip of the citys overall plan.

For now, the city is merely acquiring the properties. The second step, according to Whaley, is creating a vision for what the city will look like in the future.

“The city in front of us is probably going to look different from the city behind us,” John Gower, the citys director of planning and community development said. “We can take the best in the community and move those forward with us.”

While “vacant” homes may be an eyesore or a contributing factor to devaluating neighborhoods- the problem is that without a plan, just buying them up, and then tearing them down, doesn’t solve the big problem: why don’t people want to live here anymore?

Loss of fundamental services, perceived safety, quality of schools, confidence that the home will retain it’s value- those are the reasons properties aren’t valued anymore- and what needs to be addressed.

There are very few “Bad Buildings”- there are bad locations. If we could uproot the homes from Dayton View and put them in Oakwood- they’d be worth millions. That’s the problem- not the homes themselves, and tearing them down isn’t the answer.

Finding ways to consolidate our shrinking population into healthy neighborhoods might be a better plan- finding alternative uses for large areas of declining value real estate. Could we be raising corn and cattle on the West Side? Sure, but, it would require a real plan to transition people from “war zone” areas to stable ones. That’s a real plan, not just picking up the pieces willy-nilly like the city is proposing to do now.

What are your ideas? How do we find ways to either repopulate or consolidate so that we maximize the value of our urban real estate?

If you enjoyed this post, make sure you subscribe to my RSS feed! If you wish to support this blog, please head over and use our services at The Next Wave Printing for all your printing needs. We have 4 Color Business cards starting at just $13.50.

7 Responses

  1. Joel May 12, 2008 / 1:03 pm
    David,

    The Youngstown model might be of concern to Dayton:

    http://www.nytimes.com/2006/12/10/magazine/10section1B.t-3.html?_r=1&adxnnl=1&oref=login&adxnnlx=1165810738-ux2nDnMOqULRIPNb7qMFcQ

    Sounds interesting, but as you indicate, it does nothing to attack the root problem.

    Transformation of a place takes time — an industrial “stuff” based economy will take time to transform into a technology-based “ideas” economy. The city needs the entrepreneurs and the investments to make it happen. Just as I’m sure GM received subsidies for building in Dayton-area towns, it will take the same kind of infrastructural investments to realize the new “ideas” based economy. Or, the “stuff” based economy needs to find new ways to spread its customer base: selling to a large variety of companies to support those who eventually go belly up as opposed to being single-source suppliers to large corporations, which I suspect is a large part of the downturn in smaller industrial and manufacturing companies in Ohio. Look at Miami Valley Steel as a positive example of this kind of manufacturing business- they sell to a large variety of customers and don’t rely too heavily upon a small number of companies for its own survival.

    Look at this excerpt from a trade magazine:
    “Diverse customer base
    Its 1,000 active accounts reflect a highly diversified customer base in which the biggest customer represents less than 4 percent of total sales. Further, bucking the 80-20 rule, Miami Valley’s top 10 accounts represent less than 25 percent of total sales.

    The top 10 are active in markets including store shelving, HVAC, construction, consumer goods, agricultural products and appliances.

    The breadth of its customer base insulates Miami Valley from unexpected swings in any single market or account. “If the automotive market goes to heck, a lot of service centers just die with it. If we have one market that’s down, another is usually doing pretty well,” Williamson observes.

    Geographically, Miami Valley serves 27 states, from New York to California, though most of its shipments are concentrated in the Midwest and Southeast. Piqua is 20 miles north of Dayton near the intersection of Interstates 70 and 75, which gives it ready access to steel markets. It operates its own seven-truck fleet, but uses common carriers when it’s more economical.

    “Trucking is not a revenue issue for us. We’re in it for service reasons,” he explains. “We have some established milk routes, for example, where a truck will go to Northern Indiana three days a week. Customers who buy in less-than-truckload quantities know we’re coming there every Monday, Wednesday and Friday, so we have an effective way to get orders to them. We try to make it real easy for them.”

    Williamson is proud of his company’s history of customer service, noting that of the 20 customers it won in its first year of operation, 18 are still in business and still buying from Miami Valley. “You just have to service the heck out of your customers. Everybody says it, but few walk the walk.”

    He attributes much of this success to his employees. Employee turnover is not problematic at Miami Valley, where the relationship between management and the workforce is based on mutual respect.

    “I expect an awful lot out of my employees. I expect them to actually give a damn about what they are doing, and to work as a team. If you demand that of your employees, they have a right to expect a lot out of the company. It’s got to be a two-way street. I can’t expect them to really care about Miami Valley Steel if Miami Valley Steel doesn’t care about them as people,” he says.

    This caring is reflected in some unusual perks, such as the 1,200 acres in southern Ohio the company leases so employees can go hunting, or the annual trip for female employees to such locales as New York, New Orleans or Florida. The company also offers tuition reimbursement, GED classes for employees and family members, and contributes toward health club and municipal golf club memberships.”

    Google cache version: http://209.85.215.104/search?q=cache:hQxm6HCBCYcJ:www.metalcenternews.com/2003/December/mcn0312caseStudy.htm+Miami+Valley+Steel&hl=en&ct=clnk&cd=14&gl=us&client=firefox-a

    The problem is picking the right investments, and the political capital to make some mistakes.

    Brilliant or Bozo? Thumb up 0 Thumb down 0

  2. John Ise May 12, 2008 / 3:50 pm
    Twisted irony that sprawl produced housing developments on what once were farmlands creating suburbs. People leave the city to go were farms once were (now suburbs) and now emptying out city neighborhoods are looking at creating farms lots in urban areas were dense housing once stood.

    Something’s wrong with this picture.

    Brilliant or Bozo? Thumb up 0 Thumb down 0

  3. Jeff May 12, 2008 / 8:09 pm
    “Finding ways to consolidate our shrinking population into healthy neighborhoods might be a better plan- finding alternative uses for large areas of declining value real estate. Could we be raising corn and cattle on the West Side? Sure, but, it would require a real plan to transition people from “war zone” areas to stable ones. That’s a real plan, not just picking up the pieces willy-nilly like the city is proposing to do now.”

    The problem with wholesale consolidations is the hold-out issue. There are always holdouts in areas of derelict housing, who are keeping up their proprety, and dont want to sell out. Also, things are dire here but they are not quite as bad as Detroit…yet…whith entire blocks mostly gone. Right now its onesys-twosys when it comes to vacancys, though there are larger blocks. I’d say for onesys twosys, on blocks with mostly occupied units, neighborhing owners (if they are homowners) should be given first dibs on the proeprty via asort of dollar-house program..instead it would be a dollar-lot.

    The real big tracts of vacancy are old industrial sites…more visible on the west side.

    Also, note they are looking for volunteers. Teresa Gasper made this comment and provide e-mails for Whaley and a county official over at Most Metro if anyone wants to get involved. Maybe an opportunity to actually participate in a solution (I might contact them about this).

    Brilliant or Bozo? Thumb up 0 Thumb down 0

  4. David Esrati May 12, 2008 / 10:04 pm

    Jeffrey- can you provide a link to the Most Metro stuff-
    I can’t find anything on that site.
    The hold-outs can get handed the whole block- and the tax bill to go with it.

    Brilliant or Bozo? Thumb up 0 Thumb down 0

  5. Greg Hunter May 15, 2008 / 7:58 am
    Thanks for the link and that is finally a good idea that has a sound financial future. If I remember correctly Jeffery had a post about the locally produced food utilizing a local cycle of fertilizer. I have been trying to get my financial advisor to allow me to buy realestate through my self directed IRA and the prospect of constructing an urban farm would appeal to my sensibilities and match the my vision of the future.

    Urban Farmers should also be able to ship produce on the RTA to enhance ridership and provide transportation of the products to more populated locations. With Oil rising, Dayton will have to go back to the future.

    Do you think we can keep the Fairgrounds to house transportation animals?

    Brilliant or Bozo? Thumb up 0 Thumb down 0

Leave a Reply

Your email address will not be published. Required fields are marked *