The Joys of Growing Pains
I’ll happily take any opportunity to tout the success of The Muskegon County Land Bank Authority. After all, we’ve sold 54 properties altogether, including a healthy mix of “old” properties that had been held for some time, “new” dwellings that required only clean-up or minor rehab, and, in the county’s outlying townships, several vacant side lots conveyed to neighbors.
The total taxable value of the properties conveyed is over $800,000 and the total portfolio is in excess of $500,000 total sales values.
We’re doing a great job at returning properties to the tax rolls.
Of course, I guess, while I’m bragging, I should mention that this hasn’t always been the case.
We were part of the second wave of land banks in Michigan, following in the footsteps of Genesee and Ingham Counties. Not knowing exactly what we were doing but unwilling to let that stop us, we partnered with a local non-profit, borrowed $300,000 from the County forfeiture fund, and fixed up five houses.
Did I mention we did this just as the housing market started to “adjust”?
With no funding and no staff, the Muskegon LB sat dormant for a few years. A few deals were made here and there and two of the original homes were sold on land contract. The houses sat in place, neighbors were committing acts of “vigilante landscaping” and the Land Bank was perceived as just another program that held property with no apparent plan.
Last year, the LB finally started to make headway. A staff was hired on a consultant basis, yards were cleaned up, houses were re-listed (why weren’t they selling again?), and a fresh batch of new property was obtained through bundling property before the second auction. The bundling process was not without its critics. The LB claimed a mulligan to assist in building capacity. We know the long term gain will dwarf the short term loss.
Houses, both old and new, were placed for sale on a cash, mortgage, or land contract basis. The land contract decision was not easy and is not without its risk. But we decided that the greater risk was doing nothing at all. With both feet, the LB jumped into the pool.
The record has proven our decisions to be a resounding success: tax recapture, at only around $5,000 last year, is slated to double or triple (even after tax review).
After selling only sixteen properties in our first three years of existence, we’ve sold 54 properties in the last nine months.
We have been able to take a great step forward, propelled by our wit and guile. We are not about to get too full of ourselves or too far ahead of ourselves. The LB will only succeed through smart, measured growth. The 2011 tax auction cycle is at hand. Muskegon County will tax foreclose on about 500 properties (small potatos compared to some counties, but still almost double the number foreclosed last year, our previous record). Property is in the process of evaluation. We have some ideas of where we want to go (categorized as “definitely”, “would be worth considering”, and “silly-ass, wild ideas”).
Time will tell which way we go, but one thing is certain: it will be done our way.
Tim Burgess is the Executive Director of the Muskegon County Land Bank Authority