When It Comes to The Land Bank, St. Joseph Should Get Out While It Still Can
A version of this commentary appeared in the St. Joseph News-Press.
You are probably familiar with various versions of the phrase, “Time to get out while the getting is good.” While that suggestion does not often apply to government, it most certainly does to the St. Joseph Land Bank.
In 1971, the state created the nation’s first “land bank” in St. Louis to help get control of vacant properties and return them to private use. Since that time, the St. Louis land bank has proven better at acquiring properties than at returning them to the private sector. In a struggling city like St. Louis, that alone should not be a surprise. More troubling is that the hesitancy in getting rid of the properties it had has been no accident. Research by Show-Me Institute staff and others documented the alarming frequency with which legitimate offers for property in the land bank have been rejected. Most commonly, the land bank has been rejecting offers in order to hold the land for future — often more politically connected — development. That development has seldom come to fruition, so thousands of land bank parcels have just sat there for decades.
In 2012, Kansas City followed St. Louis with its own land bank. At the time, the Show-Me Institute published research documenting the failures of the St. Louis land bank as a warning to Kansas City about what was ahead. But, proving once again in government that nothing succeeds like failure, the state approved a Kansas City land bank, which was started up later that year.
Fast forward to December 2021, and the Kansas City Star has just published a series of stories on development failures in parts of Kansas City, including a major article on problems at the Kansas City land bank. Needless to say, the Kansas City land bank has not lived up to its promises. Its executive director was removed in 2018 after accusations of political favoritism and other problems. The family of the Jackson County executive received a special deal on certain properties, which raised plenty of eyebrows. As in St. Louis, the Kansas City land bank has been plagued by conflicts of interest and poor management.
Land banks have fundamental problems. Ideally, they would work quickly and efficiently to place properties they own back into private hands. But that very speed is what will inevitably make them subject to abuse by those with political connections. In order to guard against such problems, they can become a typical bureaucracy—slow and ponderous to deal with. But if they do that, few in the private sector will want to work with them. So, the choices are to operate quickly and accept some level of malfeasance or to operate bureaucratically and drive away some of the people who approach you. Finally, land bank employees have little incentive to do their jobs so well that they find themselves out of one. Idealists may wonder why St. Joseph’s land bank can’t have the best of all worlds and be nimble, honest, and focused—but if the experiences in St. Louis and Kansas City are any guide that is not going to happen.
The St. Joseph land bank has, according to reports, chosen to err on the side of ponderous bureaucracy since it began operating in 2019, and that was before it even held any properties. Now it has five properties to try to return to the private sector as taxable, productive land and buildings. I remember in 2012 when Kansas City opened its land bank and promised it would be operated more effectively than St. Louis’s. That didn’t happen. I am sure the same promises would be made now at the St. Joseph land bank in reference to Kansas City. I don’t dispute the sincerity of the promises—just the likelihood of their fulfilment.
Traditional county land trusts have worked fine as a way to deal with abandoned properties. The City of St. Joseph should take heed of the recent stories in Kansas City and transfer those five land bank properties to Buchanan County for inclusion in the annual county tax sale process. Get out while the getting is good, or else I will expect in about five years to read a News-Press exposé on the failures of the St. Joseph land bank.
