If you’ve seen any of these signs around town, you may have had this question pop into your mind. What is the Muncie Land Bank? How does the land bank work? While we won’t be able to cover every single question out there, this post will answer a few main questions we’ve heard from folks around town. Please comment on this post with any additional questions you may have and we’ll add them into our Land Bank informational series.
The main questions covered in today’s post are:
- How is the MLB funded?
- How does the MLB acquire land?
- What does the MLB do once they acquire land?
The MLB is a nonprofit organization that is funded by organizations such as the Community Foundation, the Ball Brothers Foundation and the Muncie Redevelopment Commission. If you’d like to support the work of the MLB, consider donating to help us continue tackling the challenge of blight in the Muncie community.
A few things about property. Every parcel of land in the state of Indiana is subject to property taxes. Land that has structures on it, such as a house or a shed, is subject to a certain level of taxation, while empty lots are subject to another level of taxes. A property is eligible to be sold at a tax sale when the prior year’s spring installment of property taxes remains unpaid. The Delaware County government usually conducts a tax sale in the fall and a deed sale in the summer. Anyone can participate in these sales that does not owe delinquent taxes. The minimum bid at the fall tax sale is usually the amount of unpaid taxes. The highest bidder receives the property and must initiate a legal process that normally takes a year to receive the deed. This gives the original owner the opportunity to pay their delinquent taxes and get the property back.
Most years, the Delaware County Government also hosts a deed sale. This is different from the tax sale because the deed can be sold and property ownership can be transferred almost immediately. It is during the months between the tax sale and the deed sale that the MLB can insert itself into the legal process and acquire tax delinquent property.
In the last two years, the MLB has worked with a number of local community development organizations, neighborhood associations and, local developers to filter through the list of properties that went unsold at the tax sale and prioritize a handful to be included in an “ask” to the Delaware County Commissioners.
So how does MLB acquire land? We are a non-profit organization, but we also work with the county and the city to “bank” the land. One way that the MLB acquires land is by requesting unsold tax or deed sale properties from the county. This allows the MLB to acquire land that is already blighted or abandoned, and that would likely have significant neighborhood impact if properly revitalized. For example, last year we requested fifteen unsold deed sale properties from the county, and we received eight of those fifteen.
We also take property donations from owners who view their property as a liability. Oftentimes these owners do not live in Muncie but may have inherited a parcel from a relative, and due to low land values, it might be easier for them to donate the property to us than to sell it on the market. In rare instances, when the land bank believes that it can facilitate significant block-level change, the MLB might directly purchase a parcel. However, purchasing is not our primary method of acquisition, and we only do so in special circumstances.
Before acquiring land, we ask for input from other non-profits, community leaders, neighborhood residents, local developers, and our leadership board. We also prioritize acquiring properties that are owned by out of state LLC’s so that we can bring ownership back to Muncie.
What’s the purpose of the land bank if people can just buy abandoned properties at a tax or deed sale? A lot of the time these properties have large amounts of outstanding taxes and liens, abandoned buildings, or other factors that make them financially unviable for development. Look around your neighborhood, you may see a few! When the land bank acquires these undesirable properties, we work to both legally and physically clean the parcels. We ensure that the properties have clean titles and that any structures are properly boarded and situated so that they will not further decay. Sometimes, when needed, we even demolish structures that can no longer be rehabbed.
As the Lank Bank, we take responsibility for these lots and we hold them until the communities they reside can best use them. In action, this may look like someone purchasing a lot near their house to have a garden or to expand their business operations. This also creates opportunity within the community. Instead of these properties being bought by people from outside of Muncie, local residents are the target purchasers of MLB properties. Properties go up for bid on our website at the beginning of each month and all proposals are reviewed by the MLB team. Proposals are chosen based on the MLB guidelines, which prioritize local ownership and responsible long-term occupation.
We would like to note that Indiana is not the only place with land banks. In Ohio, there is legislation in place that puts abandoned parcels directly into the care of land banks. Each county in Ohio has a land bank that works with local communities to revitalize abandoned properties and reduce blight. This important piece of legislation keeps more land in the ownership of local people who can use it for good.