What a land bank is and what it does
A land bank is a government or nonprofit organization that buys, holds, and manages vacant or abandoned property in a city or county. The land bank takes title to the property — meaning it owns it legally — and then either sells it to someone who will use it, gives it away to a nonprofit or community group, or tears down a building that cannot be saved.
Land banks exist because cities end up with thousands of empty lots and boarded-up buildings that nobody wants to buy. These properties sit unused for years, sometimes decades. They attract crime, lower property values in the neighborhood, and cost the city money in code enforcement and demolition. A land bank's job is to move that property back into use faster than the normal real estate market would.
The land bank does not charge you to live on the property or use it. It charges the person or organization that buys or receives the land. The goal is to get the property into the hands of someone who will actually develop it, farm it, build housing on it, or turn it into a community garden.
Key Takeaways
- Land banks are run by cities, counties, or nonprofits and own vacant property that the normal real estate market has abandoned.
- A land bank can sell property at a steep discount, give it away, or demolish buildings that are too damaged to repair.
- Land banks use a process called side lot sales to sell small vacant lots to neighbors who want to expand their yards or gardens.
- You can find out whether your city or county has a land bank by calling your city planning department or searching online for "[your city] land bank".
- Land banks move slowly because they have to research property history, clear title problems, and follow local rules before they can sell or transfer ownership.
How land banks get property and what they do with it
Land banks receive property in several ways. A city may transfer tax-foreclosed lots to the land bank — these are properties where the owner stopped paying property taxes and the city took them back. A property owner may donate land to the land bank. Or the land bank may buy property at auction or from a private owner who wants to get rid of it.
Once the land bank owns the property, it has choices. For a small vacant lot, the land bank may sell it to a neighbor at a low price through a side lot program. For a larger parcel, it may sell to a developer who will build housing, a business, or a community facility. For a building that is too damaged to repair, the land bank may demolish it and sell the cleared lot. For property in a neighborhood where the land bank wants to support community use, it may give the land to a nonprofit that will run a community garden, youth center, or other program.
The land bank also holds property temporarily while it works through legal problems. Many abandoned properties have unclear ownership, unpaid liens, or other title issues that prevent anyone from buying them. The land bank researches the history, pays off liens if necessary, and clears the title so that the property can be sold or transferred without legal risk.
Side lot sales and how they work
A side lot sale is the most common way a land bank moves small vacant lots. A side lot is an empty parcel next to someone's house or business. The neighbor can buy it from the land bank at a price well below market value — sometimes a few hundred dollars instead of thousands — with the understanding that they will maintain it and not leave it vacant again.
To buy a side lot, you typically need to own the property next to it, have no unpaid property taxes or code violations on your own property, and sign an agreement saying you will not resell the lot for a set period (often five to ten years). The land bank wants to prevent speculators from buying cheap lots and flipping them for profit. It wants the land to stay in use in the neighborhood.
Side lot sales are popular because they are fast compared to other land bank transactions. A side lot sale can close in a few months instead of a year or more. The price is transparent — the land bank publishes it — and the process is straightforward. You contact the land bank, confirm you meet the requirements, sign the paperwork, and take ownership.
How long land bank transactions take
Land bank work moves slowly. A side lot sale may take three to six months from the time you express interest to the time you receive the deed. A larger property sale or transfer can take one to two years or longer.
The delay happens because the land bank has to do title research, contact previous owners or lienholders, resolve legal disputes, and sometimes wait for a building to be demolished before it can sell the land. The land bank also follows local rules about community input, environmental review, or neighborhood approval before it can transfer property. These steps protect the neighborhood and prevent the land bank from making hasty decisions, but they add time.
If you are interested in a specific property, ask the land bank directly how long it expects the process to take. Some land banks publish timelines on their websites. Others will tell you over the phone or by email.
Finding out if your city or county has a land bank
Not every city or county has a land bank. As of now, land banks exist in roughly 30 states, with the highest concentration in the Midwest and Northeast. Some states have laws that make it easy for cities to create land banks. Others do not.
To find out whether your city or county has one, start by calling your city planning department or visiting the city website and searching for "land bank". If your city does not have a land bank, ask whether the county does — some county land banks serve multiple cities within the county.
If your area does not have a land bank, you can still find information about vacant property through the city assessor's office or the county tax assessor. These offices maintain records of all property in the area, including which lots are vacant and who owns them. Some cities also have online maps showing vacant property.
What land banks cannot do and what they cost
Land banks cannot force a property owner to sell. They can only buy property that is offered to them, donated, or transferred by the city after tax foreclosure. If a property owner wants to keep their vacant lot or abandoned building, the land bank has no power to take it.
Land banks also cannot solve every vacant property problem in a city. They have limited budgets and staff. A city with thousands of vacant lots may have a land bank that can only handle a few hundred properties per year. The land bank prioritizes based on neighborhood need, funding, and the condition of the property.
Land banks are funded through a mix of city budget money, state grants, federal grants, and sometimes private donations. The cost to you is zero if you receive property from a land bank. If you buy property from a land bank, you pay the price the land bank sets, which is usually far below market value. You also pay normal closing costs and property taxes like any other real estate purchase.
Why cities create land banks and what they hope to achieve
Cities create land banks to stop the cycle of abandonment and decay. When a property sits vacant for years, the neighborhood suffers. Property values drop. Crime increases. The city spends money on code enforcement and demolition. Residents move away. Businesses close.
A land bank breaks that cycle by moving property back into productive use. A vacant lot becomes a community garden. An abandoned building is demolished and the land is sold to a developer who builds housing. A side lot is sold to a neighbor who expands their yard. Over time, the neighborhood stabilizes and property values recover.
Land banks also help cities manage the cost of vacant property. Instead of paying to demolish a building and then owning the empty lot forever, the land bank can sell the cleared land and recover some of the cost. The land bank can also prevent future abandonment by selling property with restrictions that prevent it from becoming vacant again.
Frequently Asked Questions
Can I buy a vacant lot from a land bank if I don't own the property next to it?
It depends on the land bank and the property. Side lot sales are reserved for neighbors. But some land banks sell larger parcels or properties in certain neighborhoods to anyone who meets their requirements and has a plan for the land. Contact your local land bank to ask about properties that might be available to you.
What happens if I buy a side lot and then don't maintain it?
The land bank agreement usually says you cannot let the property become vacant or neglected. If you violate the agreement, the land bank may have the right to take the property back or sue you. Read the agreement carefully before you sign it and make sure you can keep the property in the condition the land bank requires.
Does a land bank have to sell property to the lowest bidder?
No. Land banks are not required to run auctions or sell to the highest bidder. They can choose who to sell to based on the buyer's plan for the property and whether it matches the land bank's goals for the neighborhood. A land bank might sell to a nonprofit at a discount instead of a developer who offered more money.
How do I know if a property is owned by a land bank?
Check your county assessor's website or call the assessor's office and ask who owns the property. The assessor's records will show the land bank as the owner. You can also contact the land bank directly and ask whether it owns a specific address.
Can a land bank take my property if I stop paying taxes?
No. A land bank does not take property directly. When you stop paying property taxes, the city or county takes the property through tax foreclosure. The city may then transfer that property to the land bank, but the land bank itself does not initiate the foreclosure.