The New York Land Bank Act amends the Not-for-Profit Corporation Law to allow the formation of up to ten land banks throughout the State to combat property blight caused by the mortgage foreclosure crisis. The creation of a land bank in New York is conditioned on the approval of the Urban Development Corporation (d/b/a Empire State Development), which, on May 17, 2012, approved five (out of seven) applications to establish the first land banks in the State in the following areas: Buffalo, Syracuse, Schenectady, Chautauqua County and Newburgh. New York became the twelfth state in the nation to pass land bank legislation on July 29, 2011.
The Land Bank Act (codified as N-PCL Article 16) provides for the conversion of vacant, abandoned or tax-delinquent properties into productive use. An interested foreclosing governmental unit, or tax district (“FGU”) must pass a local law, ordinance or resolution enabling a land bank to take properties by foreclosure proceedings and containing specified information such as the name of the land bank, the number, names and terms of the directors, and articles of incorporation. Two or more FGUs and any municipality may enter into an intergovernmental cooperation agreement to create a single land bank to act on their behalf. A land bank must be formed as a type C not-for-profit corporation, which is one formed for any lawful business purpose to achieve a lawful public or quasi-public objective.
Once established, the land bank has the authority to own, manage and finance the development of the foreclosed properties. Unlike an urban renewal agency, a land bank does not have the power of eminent domain. Rather, flexibility in the Land Bank Act allows a land bank to acquire property through foreclosure proceedings, by purchasing tax liens, by acquiring property directly from FGUs, or by various other means such as donations and acquisition from developers. Under the Act, a land bank has the following operational powers: to acquire real property from a municipality or privately within the geographical limitations of the FGU; to hold property exempt from taxes; to dispose of property with conditions; to acquire property from a municipality for little or no consideration; to acquire and service tax liens on real property; to issue bonds; and to accept grants or loans from FGUs. The New York Land Bank Act suggests the following possible uses for acquired land: parks, playgrounds, community areas, affordable housing, retail, commercial and industrial activities and wildlife conservation areas. The winning land bank applications cited high vacancy rates, declining populations, loss of industrial bases and an inadequate tax foreclosure system as primary concerns to be addressed by land banking. From the Chautauqua County Application: “As of the 2010 Census, 12,676 (18.9%) of the County’s 66,920 housing units were vacant, which is a 2.9% increases since the year 2000…this is a large vacancy rate (almost double the state average) for a rural region considering the New York State vacancy rate of 9.7%, according to the 2010 Census.” Buffalo and Syracuse’s applications emphasized the role the land bank will play in acquiring historic properties. One goal shared by all applicants is to adjust the housing stock to meet housing demand, whether that means reducing the number of units, replacing older housing with newer stock, or moving toward denser development.
Empire State Development’s Land Bank Approval Guidelines are available here:http://www.esd.ny.gov/BusinessPrograms/Data/LandBankProgram/112111LandBankProgramGuidelines.pdf
The New York State Association of Counties’ guide is available here:http://www.nysac.org/legislative-action/documents/NYSACLandBankBriefReport.pdf