A duplex at this lot at 114-116 Lawton Road was demolished after an October fire, and the property could be turned over to a new Oak Ridge land bank.
A new Oak Ridge land bank could be started with $100,000, one donated lot, and eleven parcels where homes have been demolished or are being demolished.
Oak Ridge officials said the land bank program is a tool that can help the city return vacant, abandoned, and tax-delinquent properties to productive use, one of several initiatives to improve local housing.
The Oak Ridge City Council agreed in a 6-1 vote on Monday to set up the Oak Ridge Land Bank Corp., appropriate the funds and staff support required to create and start running the program, and transfer the available city-acquired properties. Council still has to approve the program on second and final reading in September.
The land bank program was part of a “Not in Our City†plan adopted several years ago, and Tennessee officials have already approved a pilot program in Oak Ridge.
Oak Ridge City Manager Mark Watson said the program would not be used for eminent domain.
City Council member Trina Baughn voted against the establishment of the program. Among other things, she said she wanted more information on the scope and cost of the land bank, and she didn’t want to add another layer of government.
“I fail to see what a land bank can accomplish that we don’t already have,†Baughn said.
The properties that could be transferred to the Oak Ridge Land Bank Corp. are at 214 Waltham Place, 121 Goucher Circle, 112-114 Wade Lane, 608 W. Outer Drive, 175 Outer Drive, 110-112 Walnut Lane, 114-116 Lawton Road, 212-214 N. Illinois Ave., 134 Houston Ave., 133 Johnson Road, 101 Decatur Road, and 116 Jarrett Lane.
Under the ordinance approved on first reading Monday, the Oak Ridge Land Bank Corp. would have a seven-member volunteer board of directors appointed by City Council. One of the seven board members would be a Council member. Board meetings would be open to the public.
Most of the initial $100,000 would come from money left in the city’s Housing Fund, Oak Ridge Community Development Director Kathryn Baldwin said.
City officials said it would be the first land bank in Tennessee.
“This designation was bestowed upon the City of Oak Ridge because of a myriad of social and economic factors that included the large number of legacy World War II-era housing structures originally constructed as temporary residential dwellings in support of the war that are now in deteriorated and unsafe or otherwise unfit condition,†Baldwin said.
The program has been in the works for several years in Oak Ridge and has been publicly promoted by resident Charlie Jernigan.
Robert Humphries says
Government should not “own land”. The founding fathers allowed the central government a little land called DC so it could put up the necessary facilities to operate….not build sub-divisions, dams, parks, Federal buildings in every state, etc. etc. Give them an inch, and government will take a mile. Council member Baughn has it right: “We have the tools now to accomplish the same goals.” We don’t need another level of government, or pseudo-government agency, or anything like all the little greedy “advisory groups” that hang out in Oak Ridge. We need to limit government and live within our means. Oh, I forgot. Principles don’t count in Oak Ridge.
Sam Hopwood says
We’re are from the government and we’re here to help… 🙂
Charlie Jernigan says
What a bleak place this country would be without National Parks, Monuments, and Forests, State Parks and Recreational Areas, and local City Parks and Green-spaces. What a poor country this would be without Federal Interstates and highways, State roads, and local city streets to connect us all and to facilitate commerce. There are many, many more such examples.
The Land Bank here in Oak Ridge is a State of Tennessee pilot program to test its effectiveness in combating local blighted and abandoned properties and returning them to private ownership using local preferences. These shape of these preferences are defined by the City Council and will probably include goals like protecting neighborhoods; openly and fairly facilitating repair, development and redevelopment; and returning property to the tax rolls.
The current process in Tennessee involves waiting for properties to become tax delinquent, entering a multi-year process before putting them on auction in which many of them will have no (zero) bids. All the while the nearby neighbors, the rest of the neighborhood, and the city pay the price of these properties and the negative effects they have on other properties’ value and desirability.
Finally, there is a worldview that sees government as the exercise of the combined aspiration of its citizens and not as an evil to be stamped out. Land Banks exist in the first and not in the last, at least until conditions become really unbearable. It would be sad to wait until then.
Andrew Howe says
Charlie, since the inner workings of the plan aren’t formalized (or public), can you tell us how the Land Bank might step in to reclaim blighted properties w/o having to wait for them to go on the auction block? I’m assuming it’s because the bank’ll have funds and the ability to make offers on land earlier in the process, but please correct if that’s wrong.
I think the US govt is still pretty much trying to be the ‘combined aspiration’ type. However, we’re obviously starting to see some corruptions on the fed level, have definitely found corruptions on the local level in the past, etc. Human nature will dictate that when resources become more scarce (as they will globally from here on out), more and more corruption will occur as people scramble to maintain their ‘way of life’ (which for most people equates to financial prosperity).
I was in Venezuela in 1998 just before Chavez achieved his coup. What happened there is a lesson for all: economy dropped, graft greed and corruption started occurring everywhere, which only forced others to be corrupt as well to survive, until finally the entire system was so clogged with graft that a coup was possible.
There are great similarities between that story and the past ten years of the political/economic state in the US. What’s kept us from falling into the abyss so far has likely been 1) the paradigm of the US is to be ‘good’ 2) the law breakers are still being punished. You take away the paradigm, which has been wittled-away at for nearly 40 years at least, or the ability to enforce laws (which is also suffering from the economic downturn) and you have a country ripe for corruption at all levels.
Notice how the police in the US focus so much on revenue generating tickets. They have much worse crimes (and worse safety issues on the road) than speeders, yet for decades the police paradigm has been to go after easy money. No because the officers want this, but because the financial needs of the departments dictate they follow this paradigm or they go broke.
Financial issues absolutely change the way we act, and can completely undermine the principles we would rather follow.
So it’s not the current regime we have to consider, we also must consider the future regimes, and the future right now, from both a pragmatic and emotional viewpoint, looks bleak on many fronts.
Time to play it safe.
Whether or not we need to do that with a land bank is the question at hand. We NEED a solid detailed plan presented to the tax payers for us to understand the possible risks.
Charlie Jernigan says
Besides operating in the marketplace for lower cost property, one other aspect that receives less attention but may be important here in Oak Ridge is that of donation. With the Land Bank operating with a reasonable reputation opposing blight, it may attract some who cannot imagine their home becoming blighted and hurting their neighborhood that they called home for decades. The mechanism would most likely be through their wills or perhaps their heirs would prefer to donate for federal tax advantage rather than deal with managing a remote sale.
The reason I believe this may be significant is that many older people here have lived and worked their whole lives here. Their children grew up and attended school here before moving away as adults. There is a fondness for Oak Ridge that offsets some sadness at our recent trends. This is a way that they can contribute to our future successes.
But before any of this can happen, we need a vote on second reading to enable the land bank. After that there is a lot of work including: the board is constituted, by-laws drawn up, negotiate with the city on transitional issues, establish relationships with local financial institutions, integrate the policies defined by the city council into operational policies and measures of success, establish a web presence to accurately describe our holdings to potential buyers, and open the land bank for business.
All of these steps (most of which are required by state law) toward the business plan will be open under the Tennessee sunshine laws and a good relationship with the public is essential to a successful land bank. Longer term, there may be more initiatives that could be considered, but it is way too premature now.
We have 3 years of the pilot program to flesh out some useful programs and I expect that most will evolve over that period to be better than we could imagine at the onset. As the land bank encounters new situations and ideas for solutions, the internal processes should adapt to these new realities to improve its effectiveness.
Andrew Howe says
There’s no way presently for gifted land and properties to become a ‘federal tax advantage’ without a Land Bank?
I can imagine that only donations to certain types of organizations might get such an advantage, but suspect there are many such orgs to donate to.
However, I can see your point if you’re finding many cases like this. Donating to the city would make more sense for most people in this case, than donating to the Siera Club or other ‘land gathering’ type orgs.
Charlie Jernigan says
No, any old tax exempt would do to get the tax deduction, but that would not necessarily give the donor the satisfaction of helping if they are aligned with the goals and execution of the Land Bank.
This points out that the Land Bank must develop the public reputation that would attract donors if it is to gain significant gifts. I believe that this is the intent and it remains to be seen if it can achieve this. Note that 1 of the 12 proposed seed properties was a gift. That is 8% without much effort. Perhaps a goal of 20% would not be out of reach.
David A. Vudragovich says
As I work with many seniors that live from monthly Social Security check to monthly Social Security check, I would like to mention if there is a way you can allow them to set up a Life Estate (I am not an attorney but where they get to keep living in the property but when they no longer live there, it passes to the city) it would be of benefit on reducing their tax burden. I know talking about reducing property tax is a sore subject but to some people and extra $100 can go a long way to helping with prescriptions, keeping food on the table or helping keep the utilities on in the winter! It may also help with the 5 year look back/spend down if they need assistance paying for an assisted living facility or nursing home.
Charlie Jernigan says
Great idea, David. Keeping seniors in their homes is a worthy goal that I hope will fit into the allowable functions of the land bank. However, it may not fit into the early programs offered due to the cash flow out that needs to be paid for before the property is available for land bank operations.
I have described that kind of program in my presentations around the community. It will be evaluated.
Ellen Smith says
I think David might be suggesting creative arrangements for property taxes — for example, letting seniors on limited income defer part or all of their property taxes in exchange for a part interest in the property, to be transferred after their death. Unfortunately, the Tennessee Constitution has some provisions about property tax that are generally interpreted as prohibiting those kinds of good ideas. As Charlie suggests, maybe the land bank can find a legal arrangement to allow this in the future.
A few years ago the legislature did authorize a property tax freeze for low-income seniors. Both the Anderson County Commission and Oak Ridge City Council signed on to the program. Seniors who meet the income criteria who sign up for this program won’t get out of paying property taxes, but at least they can be assured that their taxes won’t go up in the future.
David A. Vudragovich says
Ellen, my experience with that legal structuring was back in the 80’s when the person my grandmother worked for passed and he eventually wanted his church to get the property but did not want to make her move out. Grandma was allowed to live their rent free. when she moved out the property would go to the church to do with as they would. As for taxes and home owner’s ins, that can be structured on a per agreement basis. But I think in her situation, the church had to pay the property taxes and grandma the home owner’s. And if the land bank has money, maybe have the property assigned, then if there are back taxes, just agree to not go to tax sale and when the person passes or moves out, the land bank pays the back taxes. To me it is all about finding something that works and being creative!
The issue I have seen with the property tax is many people do not know about it. I know about it because the County Property Assessor spoke at an Elder Watch of Anderson County meeting last year. So I try to bring it up when I am with clients.
TJ Garland says
Baloney Charlie- I, and many others, will pay $10K for any decent vacant lot in OR.
At the Federal level packages of foreclosed homes across the US were sold privately to a company headed by Pelosi’s husband. Will these properties be bid off fairly. The only advantage I see to this is it allows us to bypass CROET.
lisa parker says
Is there monies set aside to repair and update the foundations of any of these war houses in Oak Ridge? Erosion is a common problem with these homes, and the homeowners are in a bind when trying to come up with funds to do these repairs.
johnhuotari says
Lisa,
I’m not aware of a program like that. ADFAC has an affordable housing program based on certain residency and income requirements, but I don’t know if it includes foundation repairs. Here’s a link to information on the ADFAC program: http://www.adfac.org/affordablehousing.html.
lisa parker says
Thank you. I will look into it.
David A. Vudragovich says
ONE scope I understand the land bank was intended to offer is if a person dies and the heirs do not want the property or it is too deteriorated to sell, the estate can gift/give/donate the property to the land bank and get a write off. That way we do not have vacant properties sitting vacant waiting for a person/business to come, buy it, fix it up and then sell it. Also reducing the chance of squatters and other criminal elements.
Melanie Mayes says
The trouble with this is that we don’t need to build more houses…we have too many already. The town is in decline. Further, many of the houses are very close together.
I’m worried that this initiative will simply bring low cost, low quality housing into Oak Ridge, which will continue the downward slide of property values. We need to be doing things to make properties more valuable.
If instead we made these properties available to neighbors
for cheap$, perhaps they could add them to their existing properties,
and thereby improve the value of their properties and make them more
attractive places to live.
Charlie Jernigan says
Two points.
First, the Oak Ridge city population has recently started to grow after being steady for a long time.
Second, Land Banks around the country have side lot programs where a neighbor bids for a vacant lot which is then attached to their property (and cannot be sub-divided) and they maintain it per the agreement with the Land Bank. When the property is sold (or before if the owner wants to) a new home on this larger lot can be built. In our WWII era properties, this is important since the lots often do not have room for off-street parking, for example.
The Land Bank’s ultimate goal will be to improve property values relative to what they would be without it. In the case of a side lot program, the changes would be evolutionary which would not disrupt the neighborhood, but would put it on a new trajectory.