A land bank that would acquire, manage and repurpose vacant and abandoned properties in Cook County is one step closer to reality.
Two months after its formation, an advisory committee appointed by Cook County Board President Toni Preckwinkle is recommending the county board create a countywide land bank, make it a quasi-governmental group and provide it with startup funding of $1 million so it can move aggressively.
"If created, this would be the biggest land bank in the country, both because of the population and the inventory," said MarySue Barrett, the committee's chairwoman and president of the Metropolitan Planning Council. "We're driven by the urgency of returning parcels to public use."
Talk of a potential land bank began more than a year ago and while there are some signs of recovery in the local real estate market, more than 85,000 foreclosure cases are pending in Cook County Circuit Court, according to the group's report.
A land bank would take possession of unproductive properties through direct purchases, no-cash bids at scavenger tax sales and noncash transfers from government entities and lenders. Then, the properties would be held tax-free in a trust and transferred
to a new owner with agreed-upon redevelopment plans.
According to the committee's research, more than 80 local governments in 23 states have land banks or organizations with a similar purpose. Rather than model itself on any one of those operations, the local bank would meld some of the practices from other groups that might best work in the Chicago area.
The committee estimates the land bank could deal with 850 properties in its first full year of operation, assuming 70 percent of them would be donated by banks and the rest would be acquired. Based on data from other land banks, the committee also estimated 18 percent of those properties would require demolition.
Some properties could be transferred to adjacent neighbors. Others will be grouped and transferred to developers for commercial purposes.
"We've all seen developers come and have ideas for projects and then they go out and do the math" and decide against them, said Cook County Commissioner Bridget Gainer, D-Chicago, an early champion of land banks. "My goal is make projects that are on the borderline get done. Development breeds development."
What the land bank would not become, committee members say, is a dumping ground for banks to rid themselves of undesirable, unwanted properties from their portfolios.
"At the outset, banks will see this and dump all their low-value assets into it," said Rich Monocchio, a member of the advisory committee and executive director of the Housing Authority of Cook County. "It can't just be all the bad properties."
"It's going to be selective," said Barrett, and banks could be assessed donation fees to help offset demolition costs.
The committee's recommendations will move on to the Cook County Board, which will consider them in early 2013. Even under the best scenario, however, a land bank would not be up and running for more than a year after an organization is formed.
That doesn't faze its backers, though, because they see a land bank as a long-term solution. "Foreclosures and vacant buildings are a planning problem," Gainer said. "How we address vacancy is going to be the planning challenge of the next decade."
Deceptive ads targeted. The Federal Trade Commission and the Consumer Financial Protection Bureau have sent letters to more than 30 companies in the housing industry, ranging from real estate agents to homebuilders and mortgage brokers, warning them that their advertising might violate federal advertising laws. The agencies did not identify recipients of the letters but said they reviewed 800 mortgage ads that appeared online, in mailings and in newspapers and said they found "troubling claims" that could be misleading.
The worrisome ads promoted low "fixed"-rate loans without discussing loan terms, guaranteed approval and/or low month payments without discussing significant conditions or conveyed the perception that the company was affiliated with a government agency.
The FTC consumer publication, Deceptive Mortgage Ads: What They Say; What They Leave Out, is available at http://tinyurl.com/os3aqn.