How Do Public Officials Make Land Bank Decisions? Artificial Intelligence May Help Show

This project was funded by a grant from the Pulitzer Center and provided by Eye on Ohio, the nonprofit, nonpartisan Ohio Center for Journalism. Please join the free mailing lists for Eye on Ohio as this helps provide more public service reporting.

Al Jenkins has what neighbors called “the nicest house on the block.” The renovated historic structure has fresh gray paint and manicured landscaping. A side lawn looks like it also is his. Jenkins fenced it and cuts the grass. But the City of Cleveland Land Bank won’t sell him the property. He said they told him they are saving it for future development.

Down the street from Jenkins, across from the Cleveland Clinic, bulldozers buzz around new construction on land the city gave to a developer from land bank and purchased property. The new Addis View Apartments will cost about $2,000 for a 2-bedroom in a zip code with a median income of $29,225 according to Census data.

Jenkins is happy about the new development. He’s not just a neighbor but a small-business owner heavily invested in the neighborhood.

“Anything coming to this neighborhood is going to be a plus for us,” Jenkins said.

His block resembles Swiss cheese: historic homes interspersed with vacant land bank lots. Jenkins came from a suburb in 1982. He was tired of spending all his factory income on housing. He eventually bought and fixed up many more rental houses.

So why give properties in the same area to one company and not to Jenkins?

The City of Cleveland did not respond to multiple requests for comment. (Note the city land bank should not be confused with the county land bank, which said it has no such policy.)

Using machine learning methods, Eye on Ohio looked at property remediation in several counties to look deeper at a process that has transformed the rust belt over several years.

Certain factors such as proximity to valuable properties or school districts made a property more likely to be picked for remediation in some counties. And in certain areas, officials responsible for economic recovery are the same people in charge of that remediation.

In all six counties analyzed, the amount of taxes owed either didn’t play a practical role, or the model became more accurate by picking parcels with less tax owed, even taking outliers into account. (Though houses in disrepair could have a lower value, and therefore owe less tax.)

In Cuyahoga County, out of all properties behind on taxes in 2018, 2019, and/or 2020, a total of 2,793 went through government foreclosure or ended up in the land bank through gift or foreclosure (counting combined parcels together) through September 2021.

Those land bank properties owed a median 79.0% of lot value, coming in way above the median for all tax delinquent properties, at 3.3%. They owed an average of $22,327, far higher than the $9,774 average for all delinquent properties.

Yet officials didn’t just pick the most decrepit to remediate. Of the top 2,793 properties by amount and percentage of taxes owed, few ended up in the land bank.

Whole categories were excluded, including trailers, even though trailers were one of the top residences behind on property taxes.

In absolute numbers, parcels going to the land bank in African-American neighborhoods far outnumbered those in school districts where most students are white: just 72 properties in majority-white school districts, compared to 2,721 in districts of color.

By keeping the amount owed and the location to high value properties constant, the model predicted a tax-delinquent property in a majority-white district would be chosen over a minority one. Homes in majority-white districts and in the land bank owed less money as a percentage of their lot value (139%) than homes in minority districts (351%.) (Though the median was lower.)

Keeping the amount owed and the school district constant, parcels were more likely to end up in the land bank if they had a greater number of parcels worth $10 million or more within 500 meters (1,640 feet ) of their location.

Al Jenkins’ properties are within 500 meters of the Cleveland Clinic. Patricia White is even closer.

This sickens me,” said Patricia White, whose house abuts a new development. She said her father lived in the apartment complex formerly on the site, which fell into disrepair in the 1990s. “There isn’t a whole lot of affordable housing.”

Looking Back

According to the National Land Bank Network at the Center for Community Progress, there are over 200 land banks nationwide. Eighty-two of those are Ohio county land banks, and several Ohio cities have land banks as well.

Land banks started in Colorado in the 1970s. They were later adopted, particularly in rust belt communities, which kept expanding their reach. In 2009, Ohio passed S.B. 353, allowing a “new breed of county land bank.” In the words of creator Gus Frangos, they became land banks “on steroids.”

“This new class of CIC— a county land bank— not only embraces economic and industrial development, but also community development, which is often necessary to jump start or ‘set the table’ for economic development,” Frangos wrote in a 2018 continuing legal education course on land banks.

Land banks now are vital public agencies. They turn decrepit, often-abandoned properties into viable homes – before they attract pests and crime.

Various studies show they may stabilize housing prices. And very little funding comes from taxpayers. The bulk of their revenue flows from tax-delinquent properties.

“The key problem in a place like Toledo is the changes that happen in industrialization. We just have too many buildings for our community. So in 1970, the city of Toledo had 384,000 as a population. By 2019, that number had dropped to 273,000. So we saw an over 25 percent diminution in the population in 50 years. Now, it’s econ 101 to recognize that if you have housing for nearly 400,000 people but only humans close to 300,000, you have an oversupply in housing and insufficient demand. So the thing that the land banks did, by altering the number of properties within the city, they drove property values back up,” said Shelley Cavalieri, a property law professor at the University of Toledo.

“Distressed properties lower the sale of nearby homes by something like 5 percent. When the land bank takes possession and does some basic mowing and boarding, it reduces that by about a percent. Once a demolition goes through and a vacant lot is owned by a land bank, it reduces that by another 2 percent.”

But land banks have also created tension between officials with more…