Study: Millions spent by Butler County land bank not paying off

Credit: DaytonDailyNews

Butler County Land Bank Makes Blight Disappear

Credit: DaytonDailyNews

An updated Miami University study says it would take 26 years to recoup what the Butler County land bank has spent combating blight, but officials say there are many intangible benefits the study didn’t consider.

“In general we find moderate reductions in negative externalities caused by land bank demolitions in Butler County,” the Miami study reads.

“The Butler County Land Bank spent $7.3 million … over the five years in the sample. The increase in sales prices was only $812,000 over the same period, leading to an estimated $283,000 in taxes collected per year. It would take about 26 years for the county to recover the expenditures from the additional taxes collected on an annual basis if the additional tax revenue stayed consistent.”

RELATED: With grants gone, Butler County land bank to change focus in battling blight

With $2.7 million it received in Moving Ohio Forward grants from the state, Butler County formed a land bank in 2012 to deal with blighted buildings. About 600 bad buildings were torn down under that program.

Then the county was awarded $4.3 million in federal Hardest Hit Funds for the Neighborhood Initiative Program (NIP) beginning in 2014. To date, 241 eyesores have been razed under the program.

Students and their professors at Miami first studied the benefits of the land bank in 2016 and found property values of homes within a 500-foot radius of a downed eyesore increased 29.65 percent in Hamilton. The updated study says “we estimate that, on average, each land bank demolition within 500 feet of a property increased sales prices by 2.49 percent.”

“You can’t really put a price tag on quality of life if you are in that neighborhood,” said Butler County Treasurer Nancy Nix, who chairs the land bank board. “If you’ve got squatters, if you’ve got drugs, if you’ve got needles or you’ve got the wrong kind of people in your neighborhood because of that property that’s across the street or next door, it’s very hard to quantify millions spent to take down blight.”

Middletown City Manager Doug Adkins said the land bank has been instrumental in his city’s effort to overhaul its housing stock. For two years officials have been working on plans to redevelop housing stock to make it more competitive so they can also attract businesses.

“It’s not only the removal of blight and/or the increase in property values in nearby surrounding homes,” Adkins said. “But it is also the creation of opportunities for private investment in neighborhoods that previously were not deemed viable for new housing.”

Land Bank President Kathy Dudley said the new study is a little skewed because it included the entire county, when all the land bank demolition has been in Hamilton and Middletown.

“The largest impact is always in the immediate vicinity because it goes to both quality of life as well as your housing values go down the closer you are to a boarded up, vacant, blighted house,” she said. “That stabilizes the neighborhoods where we have taken down those demos. The sample they are using is countywide and obviously the demolitions have not been countywide.”

Foreclosures are another indicator that land banks are effective. After the Great Recession there was a flood of foreclosures because people would file bankruptcy, abandon their homes and the banks and legal system couldn’t handle the onslaught and blight blossomed.

One of the main reasons the state and federal governments started attacking blight with demolition money was the flood of foreclosures. County statistics show in 2010 there were 3,166 foreclosures and last year only 775. Dudley said the land bank has “stopped the hemorrhaging” in terms of stabilizing neighborhoods by removing bad and dangerous buildings.

Dudley said she will use the study to evaluate what the land bank has done and where it needs to go in the future.

The grant money the land bank received will disappear by the end of this year so the only income — Dudley is seeking other grants — is from delinquent tax and assessment collection (DTAC) funds. House Bill 252 that is under consideration by the state legislature would provide $50 million per year for the next two, for land banks.

MORE: Butler County land bank ‘racing to beat the clock’ to demolish grant-eligible blight

The previous grants the county received were restricted to residential, the new money could be used for commercial properties. Tom Vanderhorst, Hamilton’s executive director for external services, gave support testimony for HB 252 because his city needs help razing many commercial buildings.

He said there is a building on Laurel Street now that needs to come down, the cost estimate is $750,000 and usually with grants there is a required match.

“If we had to come up with $375,000 to do that, that’s three or four public safety personnel,” he said. “That’s a hard decision, we need both of them.”

Commissioner Don Dixon said he’ll “look at anything” including increasing the percentage of DTAC the land bank receives to raze the old abandoned commercial buildings that pepper the county.

“I want to see them gone, I want to see them eradicated,” he said. “I don’t want to drive by acres after acres of buildings that are condemned or falling down.”

Butler County Land Bank Facts:

• Established in 2012 in the wake of the flood of foreclosures following the Great Recession.

• Land bank receives $2.7 million in Moving Ohio Forward funds, Hamilton and Middletown match the grant with a $1 million each, and about 600 homes were removed.

• 2014 the county commissioners approve siphoning off 1 percent of delinquent tax and assessment collection funds to open up land bank funding countywide.

• Land bank awarded $4.3 million in federal Hardest Hit Funds for the Neighborhood Initiative Program (NIP) beginning in 2014. To-date 241 eyesores have been razed under the program.

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