Abandoned and vacant properties in Fort Worth could potentially get a second life as affordable housing, if the city moves forward with a recommendation to create a land bank to tackle the housing crisis.
The concept of a land bank is simple: a government entity buys underused, abandoned or foreclosed property, maintains it, and then sells it at a lower cost to approved developers.
“Just think of a bank. You store money there,” Victor Turner, director of neighborhood services, said. “But instead of money, it’s land.”
Fort Worth has been engaged in informal land banking for several decades, Turner said, through its Housing Finance Corporation and property management department. Both entities acquired properties, either through tax foreclosures or purchases, and then sold them off at discounted prices.
“However, we haven’t been actively acquiring additional properties to replenish the ones that we sold,” Turner said.
That’s where a formal land bank comes in. Neighborhood services staff is preparing a strategic plan to improve affordable housing in Fort Worth, and one of the recommendations is creating a city land bank. Other Texas cities, including Houston and Dallas, already have land banks in place.
If a land bank is created, Fort Worth would move beyond just selling off its existing properties — instead, it would actively seek out and purchase new properties as old ones are sold.
The types of properties the land bank would target haven’t been determined yet, but it’s likely they’ll have plenty to choose from. Fort Worth has 74,835 acres of undeveloped land, according to a March report by Commercial Cafe, the second-largest amount of any U.S. city. In contrast, multi-family housing is scarce, according to land use data from the North Central Texas Council of Governments.
Other cities with large amounts of undeveloped land have opted to transform it into housing projects. In Phoenix, where the city owns much of the undeveloped land, plans are underway to sell 150 acres of undeveloped land for affordable or mixed-income housing projects.
An investment in overlooked areas of Fort Worth
Creating a land bank could help Fort Worth redevelop its vacant or underutilized land in a similar fashion.
Ideally, Turner said, the city would purchase properties and maintain them for a short period of time before finding community buyers who are committed to redeveloping them as affordable housing.
That cycle — buying, selling, and buying again — could help developers enter the market at a lower price, Turner said, encouraging further growth and investment in overlooked areas of town.
“You don’t want them in the bank too long,” he said.
Most land banks in cities across the country also have a commission with subject matter experts on it. Commission members who have real estate expertise can help determine appropriate prices and development requirements, Turner said, and act as a buffer between city staff and potential buyers.
Neighborhood services staff are still exploring different funding options for a land bank, deciding how large the bank’s inventory should be, and what areas of town to target.
Jacob Wegmann, professor of community and regional planning at the University of Texas at Austin, said targeted policies are crucial in proactively addressing residents being pushed out of their neighborhoods due to gentrification, during a May 9 presentation to Fort Worth’s neighborhood quality and revitalization committee.
“I know that’s hard. You have district-based council representation just like Austin does. Every council member, not surprisingly, is looking out for their own district,” he said. “But if you want to fight displacement as much as possible, sometimes you have to focus your efforts on particular areas rather than spreading (it) across the whole city.”
Great Recession ended previous land banking program in Fort Worth
This is not the first time Fort Worth has looked at land banking as a response to the need for more affordable housing. In 1986, the city’s Housing Task Force presented a report to council that included land banking as an option to address housing affordability, according to past city council informal reports.
In 1999, the city’s Housing Finance Corporation approved a $500,000 budget to create a land banking program that targeted tax-foreclosed properties within the central city. By 2008, the city had acquired 321 vacant lots, primarily in Como, Terrell Heights and Stop Six.
However, the program came to an end during the Great Recession, said assistant city manager Fernando Costa in an email to the Fort Worth Report. Fort Worth wasn’t effectively marketing that land for appropriate infill development, Costa said, and incurred significant maintenance costs as a result. The properties were sold off to generate revenue and reduce city expenses.
“Today, of course, the demand for infill lots and the need for affordable housing in the central city are much greater than they were 15 years ago,” Costa wrote in the email.
A presentation to the City Council on the recommendations, including the land bank, is expected within the next 60 days, Turner said.
Emily Wolf is a government accountability reporter for the Fort Worth Report. Contact her at emily.wolf@fortworthreport.org or via Twitter. Sandra Sadek is a Report for America corps member, covering growth for the Fort Worth Report. You can contact her at sandra.sadek@fortworthreport.org or on Twitter at @ssadek19.
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