Kent County Land Bank Authoritys boundaries are well considered
Even while the regional business community is beginning to feel the first wave of relief from the brutality of the banking and financial crisis, the real estate sector continues to feel the reverberations of the aftershocks. It is significant to heed the anticipated “second wave” of foreclosures widely foreseen even as early as 2010. In this day of that “new reality,” public sector programs and emergency actions are as long a list as the number of cities declaring bankruptcy.
It is against this background and circumstance that Grand Rapids Business Journal offers support — albeit lukewarm — for the Kent County Board of Commissioners’ creation of the Land Bank Authority and its recent purchase of 43 properties of 340 on the county’s tax foreclosure list ready for August auction.
On any day, the public sector should be dissuaded from using taxpayer money for any services and programs well provided by and competing with the private sector and an open market. (However, many now rue the day former President Ronald Reagan deregulated the banking industry.)
On this day, however, the Business Journal considers the iceberg beneath the surface and the well-considered boundaries of the program.
Kent County oversaw 35 properties in tax foreclosure in 2007. The number grew to 229 in 2011 and to 340 in 2012. With facts from the county treasurer’s office, the Board of Commissioners expect 1,080 tax foreclosures in 2015. Those figures do not reflect mortgage foreclosures.
The Land Bank Authority is made up of representatives from each of the private business sectors serving the real estate market: the county treasurer, banking representatives, law firms, commercial real estate, Grand Rapids Association of Realtors and the home builders association. It is given oversight by those with learned expertise and has drawn support from concerned neighborhood associations. The properties in tax foreclosure have been available to the private sector for purchase well more than two years before tax auctions.
Greg Conway, executive vice president at Founders Bank & Trust and a member of the land bank’s advisory council, last week noted to the county board that buyers at public auction are a specialized niche within the real estate market and told them, “The present tax-sale format is not a free market.”
The Land Bank Authority will use a loan from the Grand Rapids Community Foundation to buy the properties approved last week for the taxes and fees owed. It will borrow from local banks to finance upgrades, list all the properties it keeps on the Multiple Listing Service, and pay real estate agents a 6 percent sales commission. (See the story on page 1 for additional details.)
The Business Journal notes County Board Commission Chairwoman Sandi Frost Parrish’s advisement: “I think we need to look at this on a macro level and not on a block-by-block nature.”
That is good advice, too, for those charged with oversight and a sunset for the Land Bank Authority.