Starting this week, a newly established land bank in Newark, New Jersey will be accepting offers and redevelopment proposals for approximately 100 vacant lots and buildings. And so far, according to Annette Muhammad, senior vice president of land banking operations at Invest Newark, the group that manages the land bank, there seems to be a lot of interest. By last week, according to Muhammad, more than 1,000 potential applicants had already registered on the website.
“We suspect our initial inventory will go quickly,” she says.
Newark Land Bank becomes New Jersey’s first bank after Governor Phil Murphy signed an empowerment bill in 2019. Land banks are designed to help cities sell long-vacant properties for a variety of purposes, from residential buildings to commercial redevelopments to green spaces. When Newark City Council voted to create a land bank last spring, Mayor Ras Baraka said it would give the city “the ability to be very creative, resourceful and swift in dealing with properties that have been neglected for decades” . In a press release earlier this year, Baraka said the website launch “marks an important milestone in our strategy to create wealth for Newark residents by increasing home ownership and ownership.”
The Landbank hopes to avoid the pitfalls of the city’s last major real estate sale. On Valentine’s Day 2015, NJ.com reported, the city sold 100 vacant lots to Newark couples for $ 1,000 each. But it hasn’t verified their ability to actually finance or rebuild those lots. And after a year, the owners of more than half of those lots had been unable to move forward. After five years, only three houses had been built and half of the land had been returned to the city, according to a report in NPR. To hedge against a similar outcome, the Landbank requires applicants to provide “basic personal or business information, a feasible development plan for the property of interest requiring redevelopment, and proof of funding for the purchase or planned development “.
The city did not respond to requests for an interview.
The first hundred properties the land bank will offer have been transferred from the city’s possession, says Muhammad. Invest Newark has worked with community organizations for the past year to develop goals for reusing the city’s excess property.
“The overall goals are, of course, to reduce our illness and get some of this vacant and abandoned property back on the tax list,” says Muhammad. More specifically, the group hopes the Landbank will expand downtown Newark revitalization to its neighborhoods, promote corporate ownership, create opportunities for minority and women-owned businesses and contractors, create new parks and green spaces, and expand affordable housing, and help first-time buyers acquire homes.
“We tried to create a trail for everyone,” says Muhammad.
As the New York Times recently reported, Newark is experiencing a “spate of redevelopment” even though more than a quarter of its residents live in poverty. Newark has very low home ownership rates, especially among black and Hispanic residents, according to a report by the Urban Institute. It also has a higher than average unemployment rate, and most workers commute out of town for work, according to the report. But vacancies there are falling.
Cities across the country, primarily in the eastern United States, have turned to land banks to address a variety of disease and vacancy-related issues. And land banks have different functions depending on local conditions, says Brian Larkin, director of the National Land Bank Network at the Center for Community Progress.
“In some of your most stressed markets, your land bank is really helping to inspire hope, generate ideas, and rethink neglected spaces,” says Larkin. “As you look at more of your emerging markets and revitalize markets, it’s about how you can protect those spaces from those who don’t have access.”
When cities open land banks, they should identify the highest priority needs in their communities, says Jovan Hackley, communications director for the Center for Community Progress.
“Do you need accommodation? Do you need access to food? Do you need a community center or resources? “Hackley says. “In some cases in some places it is easy to clear the land so that it is not a thorn in the side or a danger to the people. But these are conversations that should be encouraged when the Landbank was founded. ”
The Center for Community Progress plans to conduct a nationwide survey of land banks this month to learn more about which strategies are most effective for disposing of vacant lots and redeveloping them for productive use. Land banks were used to varying degrees in different cities. In Philadelphia, for example, the land bank is accelerating its vacant property sales process nearly a decade after it was founded, WHYY recently reported.
For Newark, the land bank is an opportunity to advance a number of goals, says Muhammad. In housing construction, the Landbank will offer people with certain vouchers in accordance with Section 8 the opportunity to take over vacant houses with the help of programs to support down payments, to work with contractors owned by minorities or women in order to rehabilitate them and own them for the long term. The Landbank also plans to work with community organizations on redevelopment projects and prioritize opportunities for local jobs.
Above all, according to Muhammad, the land bank should be transparent – and more efficient than the city’s existing land sale process, which requires legal approval for every purchase. The Landbank Board will first determine that applicants are not “bad actors,” says Muhammad, with no tax liens or code violations for other properties. It then examines the proposals and the applicants’ ability to implement them. Muhammad says that lottery sales are not conducted as a simple auction in which the highest bidder automatically wins.
“The auction game is intended more for speculators and investors,” says Muhammad. “It’s not about the highest offer. It’s about the best offer. “
Landbank has released a series of video tutorials to help potential buyers learn more about buying property for various purposes. There is also a community advisory board, and Invest Newark plans to hold more community meetings when the land bank starts selling its properties to ensure it is serving the right purposes.
“What you propose for our church – is that what our church needs?” Says Muhammad.
Jared Brey is the Philadelphia-based housing correspondent for Next City. He is a former contributor to Philadelphia Magazine and PlanPhilly. His work has been featured in Columbia Journalism Review, Landscape Architecture Magazine, US News & World Report, Philadelphia Weekly, and other publications.