Obama's Land Banks

Redevelopment lobbyists will be happy to know that their efforts have paid off. 

The White House Press Office says that the American Jobs Act will create “A New ‘Project Rebuild’, which will put people to work rehabilitating homes, businesses and communities, leveraging private capital and scaling land banks and other public-private collaborations.”

Before reading that, had you ever heard of “land banks”?  I admit this was the first time for me so I did what you probably will do and looked up the term. 

The first Google listing was from the University of Michigan.  There are many other sources of information on land banks but all of them describe the same thing.

The information from UM describe land banks as public authorities created to “efficiently hold, manage and develop tax-foreclosed property.” 

Michigan passed a law to help create a state land bank as well as enable local land banks.  The law permits these authorities to expedite quiet title on properties, which it possesses, and make them available at nominal prices for productive reuse in the community.

The real question, why should a public agency act as the middleman on real estate?  If the properties have ANY value, they can be sold at auction to the highest bidder. 

Several states have acknowledged the failings of land banks and that they create more financial trouble than they solve. 

In short, Obama’s land banks idea is nothing more than Federal Redevelopment in which the government, not the market, picks economic winners and losers.