3×3 mapped the tax foreclosure systems and assessed municipal land bank functions throughout four cities to create a public private partnership and affordable housing development scheme for returning vacant properties to productive use in shrinking Rustbelt cities.
In the wake of the 2009 foreclosure crisis, communities throughout the Midwest and beyond are left with vast swaths of vacant structures. At a peak high in Louisville, Kentucky, 5,667 properties were foreclosed upon in 2011 alone. Such mass vacancy fuels the cycle of neighborhood blight: lower property values, increased crime, increased poverty and more vacant homes. Our client sought to catalyze redevelopment of distressed housing stock in various counties throughout the Midwestern Rustbelt region, breaking the property vacancy and neighborhood blight cycle in the process.
Working with a tax-lien servicing company, 3×3 mapped tax foreclosure systems in four counties to propose an alternative approach for reducing foreclosure rates, shorten vacancy periods, and increase property resale. Our team reexamined existing tax lien foreclosure legislation and investigated Land Bank powers to utilize eminent domain for expedited implementation of development efforts.
The goals identified were as follows:
• Effectively utilize existing municipal resources and legal structures to curtail potential foreclosures and expand Louisville Metro Land Bank’s development efforts.
• Reduce periods of property vacancy and facilitate redevelopment of distressed properties.
• Collect municipal revenue of distressed properties, retain control over unscrupulous tax collection, and augment capacity to service liens.
Our team uncovered that municipalities can retain control over unscrupulous tax collection, augment their capacity to service delinquent taxes, and return vacant structures back to productive use while increasing the provision of affordable housing. The following solutions were identified:
• Incentivize private market participation through public-private partnerships to minimize taxpayers’ financial burden and create a self-generating revenue stream;
• Reconfigure land bank policy to enable the negotiation of land swaps and land use variances with affordable housing developers;
• Catalyze redevelopment through a revenue generating framework that utilizes income from the sale of high value tax liens to finance a newly formed Local Housing Development Authority and Statutory Trust that can also leverage available public grants or financing options to redevelop properties for affordable housing.