Questions from LIBA
The Lincoln Independent Business Association (LIBA) had some great questions for us concerning their opposition to LB 424, a bill introduced to allow cities throughout Nebraska the option to create their own land banks. We thought you might be interested in the answers too!
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Questions from LIBA with Land Bank responses
It appears a number of the individuals that the Land Bank sold properties to are real estate agents. Why is the Land Bank selling property to real estate agents? How are these real estate agents chosen? Is there a contract in place to hold them to a redevelopment standard?
- A real estate agent looking to purchase a property from the Land Bank would follow the same application process as any other applicant and would not receive any special consideration in Land Bank processes.
- We sell our single properties through an application process that requires a detailed redevelopment plan and a proof of funds available for the purchase and redevelopment of the property. We provide a redevelopment estimate for each improved property that outlines the minimum standard of redevelopment and aligns with code requirements. All properties sold have a redevelopment requirement and a specified redevelopment timeline; if purchasers do not meet the redevelopment requirement within the timeline, the property can revert back to Land Bank ownership.
- You can find more information on our sales process on the ‘Programs’ page of our website under the ‘Buy’ heading.
When a private individual purchases a home what do they typically do with it? Do they renovate it, rent it out, or does it become owner occupied? Are there any binding restrictions that keep the price of these homes affordable?
- In 2017, we sold eight homes; three were sold to owner-occupants, three sold to investors for resale and two sold to investors planning to rent the properties. You can find this information in our 2017 Annual Report. Final numbers from 2018 will be included in our 2018 Annual Report when it becomes available.
- At this time, the Land Bank has no restrictions in place to keep the price of homes affordable after renovation by the purchasers. However, we have been lucky enough to work with multiple purchasers who are committed to housing affordability and we celebrate their commitment to our community!
- See Tim and Carol’s story: A Property Transformed: 3155 Meredith Avenue
How does the Omaha Municipal Land Bank determine the sale price for Land Bank properties?
- We have experimented with different pricing models in the past two years. Currently, vacant lots are priced at approximately $1/square foot and homes are priced at approximately $5,000 more than our cost to purchase and prepare the property for sale.
Does the Omaha Municipal Land Bank reach out to prospective buyers about specific properties or do you only receive inquiries through the information provided on your website?
- We market our properties to prospective buyers in a number of ways, including our website, social media, a monthly newsletter, neighborhood association notification emails, property signage, paid media, community events, email, phone calls and in-person meetings. For properties that are under 5,000 square feet, we also directly reach out to adjacent property owners.
When it says “property class” does “residential vacant” mean there is no structure on the property? Does this mean that the land bank tore a structure on the property down? How much does it typically cost to tear down a structure?
- On the property sales spreadsheets previously requested by LIBA, a property class of residential vacant means that the property is a vacant lot in a residential-zoned area. In some instances we may have demolished a structure; in the majority of cases we have acquired the lot with no existing structure.
- In our experience, the general cost to demolish a single-family home ranges from $10,000 to $20,000.
How are properties maintained after they are acquired by the Land Bank? How is this maintenance funded?
- We hire local contractors to maintain the properties, including mowing, snow removal and any debris or litter removal needed. Omaha Permaculture has also partnered with us to maintain several lots, in accordance with their mission.
- The Land Bank is funded through philanthropy, grants and property sales.
Why is the Omaha Municipal Land Bank giving away properties as part of a vacant land giveaway? How does the Land Bank decide which properties to make eligible for this giveaway?
- We know that community members have great ideas for ways to transform their neighborhoods, but not everyone can afford to purchase and develop a lot; we decided to remove that barrier.
- The vacant lot giveaway also:
- helps us dispose of otherwise unused lots, saving us time and money on maintenance
- shows the potential of vacant lots, catalyzing community development
- allows local residents to decide what they want in their neighborhoods
- spreads the word about our work and mission through authentic, organic engagement
- Eligible lots were chosen by a number of factors, including: smaller properties under 5,000 square feet that are not readily buildable, properties that would be difficult to develop, properties that were highly visible, properties that would make a positive impact on the neighborhood if redeveloped and properties that had been in our inventory for a year or longer. Find more information on the vacant lot giveaway in our blog post.
Why is the Omaha Municipal Land Bank including $5,000 as part of the vacant land giveaway? Where is this money coming from? How common is it for the Land Bank to give property away and/or pay prospective buyers to acquire property?
- The $5,000 can only be used for costs related to the redevelopment of the property and is included to help individuals and organizations with limited financial means.
- The Land Bank is funded through philanthropy, grants and property sales. The development incentive comes from the Communications budget; the Land Bank Communications team believes the publicity and positive community support from the giveaway program is more valuable than spending money on paid media campaigns and also directly serves the Land Bank mission of transforming distressed properties into community assets.
- This giveaway is the first time we have given property away and the first time we have given out redevelopment funds.
- Find more information on the vacant lot giveaway in our blog post.
In some instances, the Omaha Municipal Land Bank is advertising that properties are ideal for purposes other than housing, such as gardens, basketball courts, and playgrounds. Do you consult with the community about the impact of these facilities? If yes, how? If not, why is there not a process in place for neighbors to weigh in on these projects? Who would be responsible for maintaining these facilities? For example, what happens if playground equipment or basketball hoops deteriorate and become unusable?
- We would advertise properties in that way if they are under 5,000 square feet, which is the general minimum square footage guideline for a buildable property (a property where a home could be built).
- We do reach out to neighborhood associations when a property is listed for sale within their association boundaries, but do not generally reach out to the community for consultation when a property is sold. We would definitely welcome feedback from neighbors about the use of properties in their area and they can provide that by phone, email, in-person meetings or by attending our Board Meetings.
- We have a separate community engagement process in place for land assemblies that includes community meetings, outreach surveys and other opportunities for engagement. You can find out more about that process here.
- After we sell a property, it enters into a compliance monitoring period. During this period we ensure that the property is developed according to the redevelopment plan and timeline from the application. After the property is redeveloped, the Land Bank has no further control over the property and, like any property, the property owner would be responsible for ongoing maintenance and upkeep.
According to your records, the Land Bank sold a property to the Omaha City Planning Department for $40,000 on 3/10/2017. What was the purpose of this sale? How did the Planning Department utilize the land after it acquired it?
- The City Planning Department purchased the home at 3428 Kansas Avenue and completely remodeled it for sale through their Omaha’s Homebuy Program, which helps lower-income households with homeownership. The property is currently listed for sale for $115,000. View the property listing. For details, contact Michele McKizia at firstname.lastname@example.org or 402-444-5150 x 2034.