The Land Bank is considering lease purchases as well as incentives or discounts to get some of the properties sold, occupied and back on the tax rolls. The Land Bank purchases foreclosures and tax sales, with the goal of eliminating substandard housing by fixing up or tearing down those homes and ultimately stabilizing neighborhoods and getting the properties back on the tax rolls.
So far, the Land Bank has only sold two of 22 properties purchased and fixed up utilizing federal Neighborhood Stabilization Program funds. The sales have also both been at less than what was spent to purchase and rehabilitate the properties.
Part of the problem is the strings attached to some of the funds. According to John Joiner, executive director of the Land Bank Authority, “NSP regulations cap the sale prices at our investment or the appraised value, whichever is lower.”
And because of the declining home values in the county, due to the foreclosures, the appraised values are less than the cost to fix up the properties.
“Most we can’t sell for what we have in them,” Joiner said.
NSP-purchased properties also can only be sold to people who will be living in the homes and cannot be sold to be rental property.
And like properties purchased at tax sales, there is a 12-month redemption period for the previous owner to claim the property and pay the back taxes owed to get it back. Only after that time can the Land Bank begin work on the properties and resell them.
The Land Bank, as a governmental entity, can also only buy the properties as purchaser of last resort, meaning it can only pay the asking price or amount due in back taxes, and only if there is no other bidder.
The Land Bank is also now seeing requests to donate property from owners who can’t afford to fix up or tear down their properties because of asbestos abatement required in many of the demolitions. The Land Bank has not accepted any of these so far, due to those costs involved.
One of the incentives the Land Bank is considering is offering a second mortgage on the homes, which as long as the purchaser stays in the home for the required time will eventually fall off and not have to be paid back.
It is similar to the incentive program the city of Griffin is offering through a grant program which offers a down payment loan, which falls away after so many years as long as the purchaser stays in the home.