Prefiled bill would extend abilities of Alabama land banks

A bill filed for the Alabama Legislature’s 2024 session would give land banks more flexibility in acquiring properties and allow cities and counties to create joint land bank authorities for economic development.

SB 3, sponsored by Sen. Linda Coleman-Madison, D-Birmingham, said in an interview Wednesday that the bill would allow land bank authorities to acquire tax-delinquent properties, “which they have not had the opportunity to do.”

“We have a lot of properties, in Birmingham in particular because it is a more urbanized area, that are vacant and abandoned,” she said. “These properties are deteriorating and bringing the property values of communities down.”

Land banks are essentially an economic development tool that allow governments to acquire vacant or abandoned properties and turn them over to other entities with a goal of improving the land.

“You think about any community, you are riding down the street in an area of a neighborhood, you have got overgrown grass, you have got busted out windows, you have got any of the signs of decay,” said Brian Larkin, director of the National Land Bank Network with the Center for Community Progress, an organization that advises governments on this issue.

Larkin said that many times, governments are not interested in assuming control of these properties and managing them, preferring instead to turn them over to other groups who can use them for some purpose. A land bank is a tool to do so.

“They are quasi-public institutions that have the ability to go and get these properties that have been through the tax foreclosure process, that have been abandoned, to go get them and focus on connecting them with new uses,” Larkin said.

Some of the different uses, according to Larkin, include affordable housing if the lot sizes are big enough. Smaller properties can be made into community gardens or a side lot for an adjacent neighbor.

According to Community Progress, a national nonprofit that tries to address vacancy and property deterioration, land banks can serve as an economic development tool. By turning land over to buyers who can find a useful purpose for the property, they generate tax revenue for a local government. They also stabilize property values through development instead of allowing them to fall into disrepair.

Alabama has a state land bank, established in 2009 under the  Alabama Land Bank Authority Act.

Under Coleman-Madison’s bill, a land bank would be authorized to purchase land at a minimum price at auction so long as the property is within its geographic boundary, or outside of it but not within the area where another land bank has jurisdiction.

The land bank can then sell the property or manage it through lease agreements with another group or community partner.

SB 3 also allows the governor to create a land bank authority through executive order when a state of emergency is declared.

“The advantages, like I said, are for redevelopment and community development, and to get these properties back on the tax rolls,” Coleman-Madison said. “If it sells, it could just be like a vacant house that could be rehabbed. Now that house is rehabbed and has an owner in it that is paying property taxes. Everybody wins, and the community wins as well because you have provided a home, oftentimes for a first-time homeowner.”

The Alabama Legislature will gather for the 2024 regular session in February.