The City of Columbus Land Bank’s purpose is to bring vacant land and structures back into productive use. It often collaborates with the Franklin County Land Bank. Most Land Banks acquire properties that are abandoned or seized for unpaid taxes. Occasionally, property is donated. Newly acquired structures are inspected to determine if they should be demolished or rehabilitated. 

Technically, taxpayers own land bank property. However, The Land Bank in Columbus determines to whom they sell property and are tasked with ensuring the planned use complies with their own rules, city environmental code and ultimately to benefit the community. In blighted, poverty-stricken neighborhoods, the Land Bank can promote positive improvements. Yet, it seems to fail repeatedly.

The Land Bank’s process to buy their properties is complicated and exhausting – many individuals give up along the way. However, properties are being sold to investors whose job it is to master the process, then sit on property for years if not decades and resell at a profit. Some applicants pose as a single family home builder or seller then build rental units instead.

Buyers complete a lengthy and in-depth application, show documentation and photos of all properties currently owned, with building plan(s) details and proof of funds to complete the proposed project in the prescribed timelines. Terms specify that ground must be broken within six months, and an occupancy permit must be obtained within one year of the purchase. The contracts state that if a buyer fails to comply, the city of Columbus will seize the property, called a “clawback.”

In theory, the Land Bank rules are designed to protect communities from unscrupulous slum owners and investors, but fails to enforce its own rules. Consequently, the Land Bank sponsors bad actors and more blight in neighborhoods. Investors buy properties but do not finish the project or may erect a different build than was proposed. Another trick is to put investor properties “ In reserve” indefinitely. The Land Bank neglects its own properties, forcing neighbors into acting as unpaid property managers through 311 and other city services for the Land Bank. No follow up by the Land Bank. No consequences.

No follow through and no consequences for negligent Land Bank owners

For example, a Hilltop property was vacant for ten years when the city of Columbus took possession of it. In January 2019 it was sold to an individual we’ll call John. In 2024, five years after the Land Bank sale, the property remains vacant. For five years John claimed the homestead and owner-occupied tax credit – as can be  verified on the Franklin County Auditor website.

John’s property was cited 13 times in one year by code enforcement.

Add to the 15 years of this nuisance property the cost of 311 complaints, and a code enforcement technician’s time involved, returning multiple before closing the complaint - not to mention hours of neighbors’ volunteer time. The Land Bank neglect does not curb blight, rather it contributes to it.

That was one example of several individuals who do not comply with the Land Bank rules with no consequences and no Columbus city sanctions for fraud or a bill from the Franklin County Auditor. Why isn’t the Land Bank vetting applicants, monitoring, and clawing back violators rather than making more blighted eyesores for neighbors to suffer over and manage? 

A Daisy Chain

The Land Bank website states, “As part of the review, of this application, City Staff will review records from other City Offices, (such as Code Enforcement), Courts, and other available records. Failure to honestly answer these questions may result in the rejection of the application.” 

Or not.

An individual buyer (we will call Jacob) misrepresented himself throughout the process to purchase property. He denied that he had property foreclosed, received a code violation, judgments or had liens against him. An online public records search proved otherwise. Jacob lied.

Jacob became a not-for profit as coached by the Land Bank so that he could qualify for a taxpayer funded loan. The Land Bank gives preference to nonprofit 501(c)3 organizations to create affordable housing. The Affordable Housing trust loaned over $400,000 to Jacob’s brand-new nonprofit.

Wait! There’s more! Jacob’s pseudo nonprofit purchased a Land Bank owned home to rehabilitate in December 2022. Jacob then resold the property to his own for-profit business for $0.00 in August 2023. The property was resold for a third time in less than a month to another member of Jacob’s nonprofit at a deeply discounted price. The Land Bank was “unaware” of Jacob’s suspicious transfers.

Was any restrictive covenant placed on the property to keep it affordable? The goal of selling property to a nonprofit so the property will remain affordable is moot with no restrictions on the sale. It is not ethical to purchase a publicly owned property as a nonprofit at a discounted price and then resell it to yourself for $0.00. Then make a profit re-reselling it back to your own nonprofit organization.

But the Land Bank wasn't paying attention – or were they?

Reserved Land Bank properties for local political investors outside of the Land Bank rules. Looking through the list of Land Bank owned properties, at least two are “reserved” on the Hilltop. A nonprofit organization called Nextgen (Columbus Next Generation) is the same nonprofit owned and operated by former Mayor Michael Coleman. Currently, tax dollars are being used to maintain these lots. The mowing, the continuous trash removal, the abandoned cars removed are all on the taxpayers. Is this purchase going to be exercised this week, this year, this decade? How long do we pay to maintain reserved lots for Coleman? Is he waiting for the market to change in his favor?

The Land Bank also offers a program called Improve to Own. A next-door owner used to be able to  purchase a vacant lot at a discounted price. According to Land Bank officials, this program is no longer active, though it is still on its website. Their current unwritten policy is that all lots must be sold for new home builds. It is unclear when this decision was made. In 2020 an investor purchased a lot next to its rental property. Since then, the lot remains overgrown. Improvements required by the Improve to Own program have yet to be seen. The Land Bank approved the buyer with no monitoring.

Outside Investors destabilize neighborhoods

Home ownership creates neighborhood stability. It doesn’t seem logical that the Land Bank should be selling discounted properties to investors for rental properties. A recent study by Parcl Labs, a real estate data provider, found Columbus at the top of the market for institutional investors. In a three-month period, over 600 single family homes were purchased by institutional investors to rent out.
Institutional investors outbid the average home buyer. Bidding up prices on investment properties drive ridiculously high rental rates.

Columbus is very lucrative for investors. Where is the city of Columbus investment in homeownership? Meanwhile, hundreds if not thousands of homes sit vacant on the westside for rent and sale.  

What should be done?

  • Keep the Land Bank in compliance with City Code Enforcement rules. Land Bank vacant lots are routinely out of compliance with the city code and evidently exempt from it. They are trashed with litter, illegal dumping or used as parking lots for the neighbors’ cars. The Land Bank claims to monitor their properties but only respond after multiple 311 complaints are made and they claim to mow twice a month. Not so on Columbus’ Westside.
  • Enforce current regulations to purchase Land Bank properties. The Land Bank is responsible for vetting applicants, and after properties are sold, monitoring the progress of projects, and hold owners accountable. Placing the burden of involuntary property management on the neighbors only inflicts more trauma in already distressed communities. 
  • No sales to out-of-state investors. Local identifiable buyers only and limit the number of units that can be purchased.  Require a local management company with contact information as well. Fine companies that do not keep it updated. The Land Bank needs to work with the State of Ohio to require current owner registration (not an attorney, management company, or corporation) with current contact information other than by US Mail for every property with heavy fines for not registering rental units, $150 per yr. for that violation is chump change.
  • Restrict the number of Land Bank properties to one at a time per developer or individual until that project is completed and occupied.
  • Place a time limit on vacancy. The Land Bank and the city have vacant structure lists now. Fine them if they sit. Better to force a sale and keep a property in use than to be vacant and a potential criminal site. Some out of state investment properties stood empty on the westside for 15 years hosting trap houses, drug houses and were set ablaze 2-3 times from squatters. All neighbors suffered, many fled. Thousands of Columbus homes stand vacant while the city drives manic development.
  • Create programs to promote homeownership. Investment rental property opportunities are plentiful in the city so there is no reason to incentivize them, especially in neighborhoods where non-owner occupant properties are already at 70%. Home ownership will drive the biggest improvement in struggling neighborhoods by building neighborhood stability and creating generational wealth.