Banks already play a key role in the housing market. But a UC Riverside study suggests a different kind of bank might bring more affordable housing to the Inland Empire.
A new report from UCR’s Center for Community Solutions looks at whether land banks — public agencies that acquire tax-delinquent, vacant and abandoned properties — are a potential solution to the region’s dearth of affordably priced homes.
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That said, more research about land banks is needed, said Kristen Kopko, the center’s research manager.
“The study does not say ‘This is a great idea and we should do this,’” she said. “But it is possible.”
Like much of California, Inland residents often struggle to find housing that fits their budgets. A 2022 UCR study found just a third of Inland households could afford to buy a median-priced home, and as of this month, the average Riverside rent is 15% higher than the national average, according to Apartments.com.
The most recent UCR report, released last month, focused on tax-delinquent properties in Riverside and San Bernardino counties that could be acquired by a land bank and turned into affordable housing.
Besides clearing legal hurdles and merging fragmented parcels to build homes, land banks also could improve neighborhoods, the report found.
“By reducing blight, managing vacant land, and supporting incremental redevelopment, land banking can thus act as a tool to support broader neighborhood revitalization while advancing affordable housing goals,” the report states.
The report revealed clusters of tax foreclosed land in Lake Elsinore, Beaumont, Lake Arrowhead and Crestline. The largest clusters were in Lake Elsinore and Lake Arrowhead, which accounted for 18% and 15% of all tax-delinquent parcels, respectively, in their counties.
It’s not enough for a land bank to acquire land, researchers wrote. For starters, “a significant amount of parcels that are listed for tax foreclosure” in Riverside County are redeemed, meaning the owner pays off the tax debt, the report states.
Many tax foreclosed properties are in high-risk fire zones, or the land might be unsuitable for housing because of zoning or a lack of access to transit or jobs, according to the report.
“Land banking, while a valuable tool, must be considered as part of a broader strategy for affordable housing development.”
Land banks exist throughout the country, including in Houston.
The nonprofit Houston Land Bank was founded by the city of Houston in 1999 to acquire tax-delinquent parcels and sell them to affordable housing builders.
Since then, the land bank has branched out to do other projects — commercial development and green space, for example — to support neighborhoods.
Today, land bank President and CEO Christa Stoneham said her organization functions “as a real estate advisory firm” focused on the public good and does much of the pre-development legwork, including environmental reviews.
Land banks are effective at speeding up affordable housing by cutting governmental red tape, Stoneham said.
Besides acquiring property, land banks need to consider who they’re serving, she added.
“Affordable housing is affordable for who?” Stoneham said. “You need to know who your target audience is (and) who you’re even trying to provide housing for because affordability looks different from everybody.”
Land banks are “a great tool in order to activate the solution for affordable housing,” she said. “But keep in mind you’re going to need more than one tool in order to produce that outcome.”
