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Op-Ed: City Blight Can Be Fought with Land Bank Legislation

With just days left in the 2016 Kentucky General Assembly, movement is just starting on the Commonwealth’s budget. And as is frustratingly typical, many other issues of great importance have yet to be dealt with.

One issue that hasn’t been getting as much media attention, but I hear about almost weekly here in Covington and I’m sure is a concern in almost every Kentucky city is that of abandoned and blighted properties. Abandoned and blighted properties aren’t just an eyesore for our community, they are a major public safety hazard, a drain on surrounding property values and a strain on local law and code enforcement resources.  

Because of the lingering impacts from the Great Recession along with a generation or more of suburban sprawl, urban disinvestment and a host of other issues, there are abandoned and blighted properties in nearly every city in the Commonwealth and indeed around the country. These properties have come to their current state caused by foreclosure, personal tragedy, abandonment, and sometimes simple neglect on the part of the property owner. Whatever the unfortunate series of events that lead to a property being permanently abandoned and/or unfit for human habitation, they are a major challenge to Covington and many other communities.  

There have been a number of fires in Covington neighborhoods caused in abandoned buildings that have burnt down the homes of owner-occupied properties next door. This kind of neglect must stop. Furthermore, we must have the tools we need to reinvigorate these buildings before they are no longer savable.

In the instance of Covington, which has been tracking this issue and strategically working to address it for a number of years, we know that of the 16,067 parcels in the city, 836 privately-owned properties are vacant, and 505 privately-owned parcels are maintained by the city for public safety reasons. Last year, maintenance costs in Covington for these blighted privately owned properties were $194,465. Unpaid taxes for vacant properties were valued at $871,574.  Total unpaid taxes in the city were $1,857,518.  While our past due collections have been improving year over year, there are still a number of these vacant properties with unpaid taxes. And taxpayers are being forced to pay for others’ properties – both in taxes paid and in their own declining property values.

The City of Covington has pursued best practices like increased code enforcement and staff have created a pilot program Covington Community Developer Initiative, that lowers the public cost of pursuing repayment of public code enforcement liens on the worst offenders via foreclosure, in order to get the properties in the hands of local developers who want to improve, and often to live, in them. These programs have helped, but it’s a large and complex problem for which many tools are needed.

Which leads me back to our state Legislature and the twelve days left in this year’s budget session; one tool that has been highly effective in other regions of the country has been the land bank.  Land banks have been in Kentucky since the late 1980's. In fact, Kentucky was one of the first states to pass land bank legislation. However, we have not been diligent in updating this legislation as best practices emerge across the country.

Other states like Ohio to our north have continued to improve their land bank legislation over time to retain their effectiveness to fight blight. Essentially, a land bank is a partnership authority of the existing entities that collect property taxes. Creating a land bank isn’t making a new entity, and it doesn’t cost more in taxes.  Instead, it allows the local governments – county, city, school district, etc. to work together to be focused on blighted properties, deal with their legal and financial issues, and then have private entities develop them for quality residential, commercial or other tax revenue-producing use. This work is time consuming and expensive, so working together makes sense to increase efficiency.  

Right now, in Kentucky’s land bank law, efficiency isn’t encouraged. There is a bill currently in the Senate that would bring Kentucky’s land bank law into step with what groups in Ohio, Georgia and Pennsylvania are doing. These are places where we compete for jobs and for talent. Our communities have to be competitive, not stricken with the seemingly incurable disease of blighted properties.This bill would add one more tool to our toolbox that would help us address not only Covington’s issues with blighted properties, but communities throughout the Commonwealth.

Join me in encouraging our elected leaders in the Kentucky Senate and Kentucky House to support SB 229 which will allow us to move more properties from blight to bright, bringing back into positive use for our communities.

Jordan Huizenga is a Covington City Commissioner.