Columbus-owned land-bank properties becoming eyesores


Next to a new Columbus, Ohio, apartment complex on East Whittier Street — a shining testament to the South Side’s revival — sits a block of boarded-up and crumbling brick townhomes.

The townhomes, five blocks east of Parsons Avenue, aren’t owned by an absentee landlord. They’re owned by the city of Columbus.

In recent years, as investors and homeowners scrambled to renovate area properties, the townhomes continued to deteriorate into one of the neighborhood’s biggest eyesores.

The city says it is holding onto the townhomes and hundreds of other properties for nonprofits to rehab or for demolition, both of which take longer than some people would like.

Yet some investors and real estate experts say the properties illustrate a glaring problem with the city’s land-bank program, a 23-year-old outlet for acquiring vacant or abandoned buildings to sell or demolish.

Instead of being part of the solution to urban blight, they say, the land bank has become part of the problem.

“It’s hurting the growth of the neighborhood,” said Jeff Kowalczuk, a real-estate agent and investor.

“I’ve been trying to figure out their strategy for years. They keep these houses three, four, five years, and then they finally list them — but, by then, they’re ruined.”

Abandoned townhomes

Adobe Stock

Kowalczuk and others say they understand why the city acquired abandoned homes during the housing crash. But they don’t understand why it continues to accumulate property when private demand is huge, especially in once-neglected-but-now-recovering neighborhoods such as Olde Towne East and, near Nationwide Children’s Hospital, Southern Orchards and Old Oaks.

The land bank, part of the Columbus Department of Development, now consists of 1,834 properties (including those owned by the Franklin County land-bank program that are in the city). That’s up from 1,600 a year ago. This year, in perhaps the hottest real-estate market the city has seen, the land bank acquired 477 more properties.

“I could see from 2008 to around 2012, this was understandable,” Kowalczuk said. “But now this area is recovering, and there’s a big demand for the homes. Why wouldn’t they release them?”

John Turner, the city’s land-bank administrator, said many of the properties the city acquires (typically through foreclosure for delinquent taxes) wouldn’t be available to private investors without the city’s intervention.

“A lot of the properties we pursue can’t be resolved any other way,” he said. “They are owned by a dead person or are upside down in the mortgage. There’s absolutely nothing you can do with this property if you don’t bring it through tax foreclosure. They would just sit abandoned.”

Code enforcement

Turner noted that the program targets for acquisition the worst properties, those referred to the city by code-enforcement officers. The land bank considers all but 165 of its properties to be blighted.

Land-bank properties don’t get dinged for code violations, to the annoyance of private investors, who are cited for problems that go untouched on land-bank homes.

Dana Rose, the city’s code-enforcement administrator, said his office does contact the land bank to repair specific properties when the city fields complaints.

Turner said 371 of the land-bank parcels have structures on them; the rest are vacant lots. The city demolished 306 properties last year and has leveled 245 this year.

“When you do 300 demos a year,” Turner said, “there are bottlenecks in the system.”

Also, he said, the land bank holds on to homes in the Southern Orchards area, a neighborhood east of Parsons Avenue and south of Livingston Avenue, for the Healthy Homes program. The program, run by Nationwide Children’s and the nonprofit Community Development for All People, has helped renovate almost 300 vacant and abandoned properties since 2009.

East Whittier Street

The East Whittier Street block of townhomes reinforces the challenges the land bank faces with blighted properties.

The city program acquired the first of the seven parcels of townhomes in 2009 and bought three others as each became available. The city took the owners of the final three parcels to court over code violations. This month, just before the court date, the county’s land bank arranged to buy the three parcels for $87,000.

The city’s and county’s land banks will combine the parcels into one with the intent of demolishing the entire block early next year — more than eight years after the city started pursuing the property.

Turner expects the land bank’s number of properties to start decreasing soon, even though it has declared a moratorium on sales of vacant lots until February. It is re-evaluating and repricing its holdings, Turner said.

“I think that we’re at the point where we’re at peak inventory, and the reason for that is that there aren’t as many vacant and tax-delinquent properties as a few years ago,” Turner said. “I think our inventory will start to go down.”

Land-bank sales

The land bank does sell a lot of properties, he said, but sales take time, too, depending on the properties.

EyE Homes, an investment and construction company run by Esteban and Erika Saldarriaga, has bought four land-bank homes, including one the company is renovating on Wilson Avenue.

“I really like the program,” Esteban Saldarriaga said. “At the beginning, the process is long, but once you do it, it’s not so hard.”

He did acknowledge, though, that he would like to see the land bank release more properties. “I see some houses and some multifamily properties that I would love the opportunity to rehab.”

Others who have tried to buy land-bank properties say the process is so cumbersome that it pushes away potential buyers.

Christopher White, a Berkshire Hathaway HomeServices agent who has worked with investors in urban neighborhoods, said he hears regularly from people interested in buying vacant homes.

“I get calls on them, buyers asking: ‘What about these homes? Can you get me inside?'” White said. “I look and see they’re owned by the city and say, ‘Don’t even waste your time.'”

South Ohio Avenue

The city occasionally hosts open houses for land-bank homes, but no one from the city showed up at the open house recently scheduled for a home on South Ohio Avenue, preventing potential buyers from touring it.

The home is boarded up; its steps are crumbling. Three doors down, another land-bank home is boarded up.

Across the street, another house serves as evidence of what could happen to land-bank properties: In the spring, an investor bought the house from the land bank for $13,386, gutted it and is listing it for sale for $235,000.

Eloise Williams has lived in the neighborhood for more than 40 years, in a large, well-kept brick house sandwiched between the two boarded-up land-bank properties on South Ohio.

“I’d like to see them fixed up,” she said.

Justin Hazley, an investor who is renovating a house next door to one of the boarded-up land-bank properties, also thinks the land bank should sell the properties.

“Anytime homes go unrepaired, it hurts the community, so it would make sense for them to release all the properties to investors and buyers who have the cash and demonstrated aptitude to handle properties of this sort,” he said.

“As long as the city has some way to take the houses back if they’re not fixed up in a certain period of time, then the areas would in theory recover way faster. There’s plenty of people who want to make money in real estate right now.”

Kowalczuk, the investor and real-estate agent, said the city has let some homes deteriorate beyond salvation. He cited a house at 922 S. 22nd St. that the city demolished early this year after letting it deteriorate for five years. After the demolition, the city gave the property away.

“It was a large, beautiful brick home. I know 10 investors who would have easily given the city $60,000, even in the shape it was in. But then they tore it down. Why? It doesn’t make sense.”


Adding HECMs to your product mix

Partner Insights
Sponsor Content From:

Reverse Mortgage Funding

Tribune Content Agency

Leave a Reply