Who holds the strings to the public purse that pays for crucial services and ultimately determines a city’s financial survival? From grassroots land grabs and infrastructure collapse, to Community Development Block Grant programs, we pinpointed the state and federal policies and land-use loopholes that have major implications for municipal money. With an eye toward the post-industrial electoral convention host cities—Cleveland and Philadelphia—and sites of fiscal failures such as Flint, Michigan and San Juan, Puerto Rico, we filled in the blank between ballots and budgeting, and asked: Which cities are the winners and losers in the election process?

Participants: Michael Cohen, professor of international affairs, Milano School of International Affairs, Management and Urban Policy, The New School; Anthony Flint, fellow & director of public affairs, Lincoln Institute of Land Policy (moderator); Isabel Luciano, program associate, Participatory Budgeting Project; Andrew Salkin, Senior Vice President, City Solutions, 100 Resilient Cities, Rockefeller Foundation; and Paul T. Williams Jr., counsel, Arent Fox LLP, former CEO of DASNY…(read more)

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In the Land Bank: Borrowing, Bankruptcy, and Bailouts

The term ‘Land bank’ refers to a specialized financial institution that deals with land. Such institutions primarily focus on managing assets that are not only related to land but also real estate. Land banks also play a critical role in controlling foreclosure-related issues and getting properties in dilapidated conditions back in shape. In addition, they are a significant player in community development by encouraging investors to invest in valuable public projects.

Borrowing is one of the significant activities that a landbank facilitates. Land banks primarily lend money to individual borrowers, communities, or businesses that require financing for their land and other real estate investments. Underwriting standards for loans provided by such institutions are selective to reduce the likelihood of loan defaults. This means that borrowers must provide detailed financial information, as well as explain their intended use for the borrowed money.

Bankruptcy is another aspect that affects land banks. When the property owner defaults on their loan, the bank initiates the foreclosure process. In the case of bankruptcy, the court orders a stay of foreclosure, which effectively pauses the bank’s actions. Depending on how the bankruptcy process plays out, the bank may lose its right to collect the debt entirely.

Bailouts are another tool that a land bank could potentially access in the event of financial crisis. In times of economic distress, the government may provide financial aid in the form of grants to encourage land banking and community development. Such grants can help boost the economy by creating jobs and revitalizing distressed neighborhoods. The land bank may issue government bonds to finance these projects, with the projects themselves serving as collateral.

Land banking has become an increasingly important component of the real estate industry. By providing financing opportunities, managing foreclosures, and supporting community development, land banks have proven themselves both resilient and valuable players in a complex economic landscape. As borrowing, bankruptcy, and bailouts become common events for these organizations, their continued evolution and success are not only beneficial but, in many cases, essential for our economic and social well-being.

In conclusion, the role of land banks is significant in managing land-related foreclosures, community development, and providing financing opportunities. They are also affected by bankruptcy and sometimes require bailouts from the government to fund community development projects. As their role evolves, they remain important contributors to the economy and social development.