Kent County Taxpayers Question Land Bank
No one likes to see a building sit vacant. Vacant buildings deteriorate, can invite vandalism and discourage those considering moving to a neighborhood.
If a building is tax delinquent for a number of years, it can be taken by county government, which then takes up the expensive task of maintaining the property until someone purchases it.
So it is surprising to see that before its upcoming tax auction Kent County acted directly to keep vacant properties from being sold to private individuals.
On July 12, the Kent County Board of Commissioners voted to hand more than 40 properties over to the Kent County Land Bank to prohibit private individuals from bidding on those properties first. Moreover, that came at the expense of taxpayers: The Kent County Taxpayers Alliance reports that the land bank spent nearly $500,000 to buy those properties.
Though the ostensible purpose of land banking, which has exploded in Michigan in recent years, is to revitalize neighborhoods beset by vacancy, Michigan land banks have broad powers that can be misused and abused. Land banks have the ability to borrow money, hold vacant property indefinitely, funnel tax dollars toward chosen projects, and, as highlighted in Kent County, the ability to circumvent the tax auction process.
The only reason a land bank would need to circumvent the tax auction process is if someone wanted to purchase the properties in question. This makes the county and land bank's action doubly insulting: Taxpayer dollars are being used to thwart the sale of vacant property to people who hoped to do something productive.
While government land banking is relatively new in Michigan, the state of Missouri has a much longer history with the practice. A review of the St. Louis land bank's practices found that the 40-year-old land bank had a history of rejecting legitimate offers and allowing elected officials oversized influence over who could buy property. These practices have not led to success. The St. Louis land bank has amassed more than 10,000 properties since its inception.
Sadly, Kent County seems to be mimicking some of the same operational problems observed in the St. Louis land bank.
In May, MLive published the list of properties the land bank hoped to acquire and the land bank staff's comments justifying the acquisition. The staff comments below are excellent examples of land use control by ownership and prioritizing increased land bank revenue over private entrepreneurship.
Land use control by ownership: 1007 E. FULTON: “Beat Goes On” record shop. Staff comments: Good example of what the Land Bank can do to keep undesirable business out of neighborhoods. Party store wanted to move in.
Prioritizing land bank revenue over private entrepreneurship: 2796 64TH STREET SW: Staff comments: Near bike trail, hot area. Revenue from this project will go a long way to help fund the Land Bank.
The Kent County Taxpayers Alliance has rightly called out the land bank's actions as "crony government gone wild." The alliance has put together a radio ad decrying the move, and an informational issues page. Regardless of the land bank's motivations in this case, the powers it flexed in July have the potential to be greatly abused.
The Michigan Legislature acted foolishly when it gave such broad powers to land banks.
Hopefully, work by groups like Kent County Taxpayers Alliance will at least bring some transparency to actions that have little to do with protecting taxpayers and end up hindering private development.
Michigan Capitol Confidential is the news source produced by the Mackinac Center for Public Policy. Michigan Capitol Confidential reports with a free-market news perspective.