{"id":2372,"date":"2022-07-27T11:00:00","date_gmt":"2022-07-27T15:00:00","guid":{"rendered":"https:\/\/www.deeds.com\/articles\/?p=2372"},"modified":"2024-04-25T23:18:42","modified_gmt":"2024-04-26T03:18:42","slug":"banking-on-land-banks-for-affordable-housing","status":"publish","type":"post","link":"https:\/\/www.deeds.com\/articles\/banking-on-land-banks-for-affordable-housing\/","title":{"rendered":"Banking on Land Banks for Affordable Housing"},"content":{"rendered":"\n
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In the Adirondacks and Beyond\u2026<\/p>\n\n\n\n

Jobs around Lake Placid and Saranac Lake are plentiful these days. There\u2019s just one hitch. Prospective takers can\u2019t find accessibly priced housing. Around these scenic Adirondack towns in northern New York, affordable units are few and far between. In Lake Placid, the Mohawk Valley Land Bank is working to remedy the situation by offering reliable workforce housing.<\/p>\n\n\n\n

And other land banks are on the rise just about everywhere. Let\u2019s take a look.<\/p>\n\n\n\n\n\n\n\n

The Housing Need Is Urgent<\/h2>\n\n\n\n

Much of the real estate here turns into vacation homes. And many of the homes that could be lived in have seen better days and need renovations. There aren\u2019t enough new units coming into the market to keep a local workforce housed.<\/p>\n\n\n\n

At the same time, all of Upstate New York has seen an influx of people moving here from the cities. Visitors love the area and its outdoor beauty, too. Vacationers want to enjoy the recreational offerings that the Adirondacks are known for. And that makes it all the more important to meet the housing needs of locals.<\/p>\n\n\n\n

Businesses sense the opportunities. They are investing in real estate that appeals to the short-term rental market. And this just drives the price of housing up.<\/p>\n\n\n\n

It\u2019s Time for Action<\/h2>\n\n\n\n

Desperate times call for creative measures. Here are some leading options for Northern New York:<\/p>\n\n\n\n

Land Bank Model<\/h3>\n\n\n\n

A group called ADKAction is currently planning a new land bank for the Adirondack region. What\u2019s a land bank? It\u2019s a charitable corporation that receives federal and local government support to purchase foreclosed or vacant lots and buildings. Once it renovates and starts selling the real estate, it can really take off as a self-sustaining source of revenue and a viable source of area housing.   <\/p>\n\n\n\n

Historically, land banks have worked their makeover magic in distressed areas. The state gives them special abilities to wipe out tax liens. Ever since the advent of the pandemic, policy makers are seriously looking at land banks as viable players in restoring local economies.  <\/p>\n\n\n\n

What are the biggest challenges in creating a land bank? Mainly, it\u2019s about educating investors and a community on how it works. A lot rests on understanding the legal points of forming the entity, and clearing the tax liens<\/a> from the target properties\u2019 titles.<\/p>\n\n\n\n

Co-Ops and Deed Restricted Resort-Area Homes<\/h3>\n\n\n\n
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Co-op housing is another model. Some groups receive donations of land. And some of that land could become nonprofit co-op property. It would be owned and managed by residents who rent their units from the collective.<\/p>\n\n\n\n

\u261b<\/em> Do co-op residents hold the titles to their units? <\/em><\/strong>Here\u2019s how a housing co-op works<\/em><\/strong><\/a>.<\/em><\/strong><\/p>\n\n\n\n

And then there\u2019s the potential for deed-restricted homes \u2014 to keep a scenic area\u2019s real estate from being snapped up for short-term rentals. The group LivingADK is replicating the Vail InDEED deed-restriction model<\/a> to keep homes as primary residences of present and future buyers. Deed-restricted units sell for less than what investors are bidding \u2014 but buyers are compensated for the choices they agree to give up.<\/p>\n\n\n\n

LivingADK is now seeking potential sellers: people hoping to downsize, or people who need the cash incentive.<\/p>\n\n\n\n

Land Trust Model<\/h3>\n\n\n\n

Land trusts are an additional tool. U.S. land trusts emerged when Georgia\u2019s Black farmers created trusts for people who would share the equity. Today, there\u2019s the Community Land Trust (CLT), working in major markets including Atlanta, Nashville, Austin<\/a>, Indianapolis, and Denver<\/a>.<\/p>\n\n\n\n

Could it work in the resort towns of the Adirondacks? Sure! Just look at Vermont, with its Champlain Housing Trust<\/a> \u2014 a sprawling collective of rentals, houses, condos, and co-ops. <\/p>\n\n\n\n

CLTs are nonprofits, usually run by a board, staff, and the residents, supported by membership dues, developer fees, and federal funds. To buy in, a person gets a home loan for a restricted ownership interest in the property. Should the owner wish to sell, the unit has to remain as affordable housing. The deed for a land trust home is a general warranty deed, but selling is done through a Deed for Sale of Improvement Only. It transfers title only to the structure, not the land.<\/p>\n\n\n\n

Land trusts are stable settings for local people to improve their financial situations.<\/p>\n\n\n\n

Land Banks + Land Trusts: A Growing Synergy<\/h2>\n\n\n\n

What about a combined model?<\/p>\n\n\n\n

Land banks and community land trusts are different animals. Land banks work with municipalities to buy distressed properties, hold them, tax-free, to renovate them, and then return them to taxable use. In contrast, community land trusts (CLTs) aren\u2019t looking to buy property so much as promote lasting ownership for people. Especially for people In minority groups, who traditionally could only apply for a regular mortgage or keep paying rent.<\/p>\n\n\n\n

But a blended approach is becoming a thing in several major markets:<\/p>\n\n\n\n