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State and Local Government / Municipal Policy

St. Louis County Needs a Land Bank Like I Need a Hole in My Head

By David Stokes on Oct 18, 2022
Houses
alisafarov / Shutterstock

In truly unwelcome news for people who care about good government, a coalition has been put together to create a land bank for St. Louis County as well as any other county in the state. It’s often said that, in government, nothing succeeds like failure, and that is exactly true about land banks. Why anyone would try to expand a model that has failed in St. Louis and Kansas City and expand it statewide is beyond me.

Every county in Missouri has a land trust that takes ownership of property that comes into ownership by local government; this almost always happens because of property tax delinquency. A municipal land bank is different from a county land trust. Land banks have much more authority to proactively acquire, market, and package for sale city-owned land and buildings. In theory, land banks seem like a positive thing. But the fact is they do not work.

Three cities in Missouri have land banks: St. Louis, Kansas City, and St. Joseph. In St. Louis and Kansas City, the land banks have proved much better at acquiring property (where it is off the tax rolls) than at selling it and returning it to the private sector. Research by the Show-Me Institute and investigations by the Kansas City Star and the Kansas City Beacon have documented numerous problems with the land banks in Missouri, including political corruption, cronyism, failures to accept legitimate offers, preferences for large developments (which often never materialize) over small buyers, and much more. In St. Joseph, the land bank is very small and new, so conclusions are hard to draw, but the early indications are not promising.

As the story in the Star explains it:

“This is not an agency that is interested in selling properties, it’s more interested in regulating who gets them and under what circumstances,” development lawyer and former city councilman Mark Bryant told The Star after an offer from him and his partners at Onyx Development Corp. was rejected at a recent Land Bank meeting.

The state legislature has previously proposed bills to dramatically expand the authority to institute land banks to many more municipalities (the state legislature must approve all new land banks in Missouri). Now, there is this organized effort to expand land banks to St. Louis County. The exact wording of the newest proposal for St. Louis and other counties is unknown. It is possible it could be better organized than the other banks, but I doubt that.

The state legislature should reject future land bank legislation. If such legislation is enacted, counties and municipalities should reject the establishment of land banks. Land banks may sound good in theory, but in political and practical reality they have been a major failure.

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About the author

David Stokes

Director of Municipal Policy

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