Federal Downsizing Is Bad News for Land Banks. These Banks Could Be a Model for Others To Survive.

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Over the last 15 years, the Cuyahoga Land Bank in Cuyahoga County, Ohio has generated more than $3.6 billion in economic impact by repurposing 14,000 blighted properties for community use, per its latest impact report. The latest is the Circle East District, a development of more than 200 homes spread across 30 acres that aims to attract new jobs and private-sector investments to East Cleveland, a community reeling from an abundance of blighted properties.

Land banks have become a key tool for many cities and counties to turn dilapidated buildings and vacant land into affordable housing as inflation and supply chain issues push the cost of new construction upward. However, reductions in grant funding from federal agencies and declining state tax coffers threaten to make these institutions largely obsolete.

Since the first land banks were organized in the 1970s, the number of active land banks across the U.S. has grown to 340, according to data from the Center for Community Progress. That total includes municipal and private nonprofit entities. Though they may have differing structures and aims, all are designed to make underutilized land productive again. Many specialize in increasing the stock of affordable housing at the local level.

Meeting that goal of increasing the number of affordable housing units could become more difficult because of federal funding cuts from President Donald Trump’s administration.

Even though the future of land banks seems grim, there is still some hope, says Brian Larkin, the director of the National Land Bank Network for CCP. Multiple land banks have created innovative approaches to navigating this time of uncertainty, and they could provide a model for others to survive as well.

“The way land banks can best position themselves is to start getting the decision makers together to understand their capacities and their resources beyond inventory and form meaningful partnerships,” Larkin says.

Threats to land banks

Federal funding for land banks comes from agencies like the Environmental Protection Agency, the Small Business Administration, the U.S. Department of Agriculture, and the Department of Housing and Urban Development. Each agency is actively working to reduce its staff and grant allocations because of a memorandum Trump signed in February, directing agency leaders to “review all funding that agencies provide to” non-governmental organizations.

Declining state tax collections also pose a risk to land banks. For instance, municipal land banks receive tax allocations from local governments to fund their operations. However, property and sales tax revenue declined in 40 states during Fiscal Year 2024, according to an analysis by the Pew Charitable Trust. That means there is less money available for governments to invest in initiatives like affordable housing development.

This is happening at a time when America’s gap of affordable homes for its lowest-income-earning households has been stuck at roughly 7 million units for the last several years, according to data from the National Low Income Housing Coalition. This suggests that traditional development models for affordable housing are not meeting the needs of many cities across the country, an issue that land banks are specifically designed to address.

About 37% of the revenue land banks receive comes from government grants, Larkin says. The largest pool of funding comes from the EPA’s Brownfields Program Grants, which provide funding for land assessment, cleanup and revitalization projects. Those grants can either be directly awarded to land banks or passed through state environmental or housing agencies.

However, the EPA’s brownfield funding has come under increased scrutiny because it is considered an environmental justice program. The EPA has axed roughly $2 billion of environmental justice grants that support clean air and pollution monitoring efforts since Secretary Lee Zeldin’s confirmation. So far this year, the EPA has not approved any grants for brownfield cleanup operations and has instead focused on grants for brownfield job training programs.

The brownfield grant program also seems to be on the chopping block. A bipartisan coalition of congressional lawmakers suggested that the brownfield program should be reauthorized during a hearing for the House Energy and Commerce Subcommittee on the Environment on March 11. At the hearing, Houston Land Bank CEO Christa Stoneham said a $600,000 grant from the program was instrumental in identifying local land that could be redeveloped. That planning process helped the land bank secure $13 million in funding to remediate brownfield sites for future housing development.

“Unlike private developers, we are designed to take on complex, distressed properties and secure funding to strategically reinvest in communities that would otherwise be overlooked,” Stoneham said in her testimony. “To do this work, we rely on federal, state and local partnerships — without them, the Houston Land Bank, like other land banks across the country, cannot fulfill our mission.”

The EPA’s rollback of environmental justice funding may not impact grants that were previously awarded, but it will impact funding for new initiatives.

How land banks can protect themselves

To address potential funding gaps, Larkin says lawmakers should create new ways of funding land banks and review their legal ability to purchase and dispose of vacant land and dilapidated properties.

Philadelphia Mayor Cherelle Parker’s administration is lobbying for additional funding for the city’s land bank in her city housing plan. The $2 billion plan includes the sale of $800 million of municipal bonds to support building up to 30,000 affordable homes throughout the city. It also includes a legislative package that would make it easier for the city’s land bank to purchase land from city tax sales.

“We need to develop an expedited process where it doesn’t take a piece of legislation to move land out of the Land Bank,” Parker told Philly Voice.

Land banks themselves can also take steps to insulate themselves from future funding uncertainty by leveraging their core competencies to form local partnerships, Larkin says.

For example, the Cuyahoga Land Bank diversified its services away from simply buying and disposing of foreclosed properties. Now, the land bank offers a full suite of real estate services, from buying and selling homes to building new units and rehabilitating old ones. This makes the land bank an attractive partner for private developers, nonprofits and government agencies alike.

That transformation has helped the Cuyahoga Land Bank to focus on rehabilitating commercial properties like apartments and industrial buildings. Cuyahoga Land Bank CEO Ricardo León said this allows the land bank to address legacy blight in the community.

“That’s what we have a lot left of. … The stuff that’s been around for a very long time,” León told News5 Cleveland in August 2024. “That’s really costly to bring down. And often has the worst impacts on our community.”

The Metro Atlanta Land Bank took a similar route by partnering with the Atlanta Land Trust to create a program that allows nonprofit landowners to deposit their property into the land bank tax-free for up to five years while they find funding sources for either new construction or preservation of affordable housing. The land bank can also acquire land for a community land trust operated by the Atlanta Land Trust, which ensures a property will be kept permanently affordable for future homeowners.

To Larkin, partnerships are the key to navigating uncertain times for land banks. Like other nonprofits, land banks have a habit of trying to grow through capacity building. While that strategy can work when funding is guaranteed, it can also put land banks in a bind when funding is harder to secure.

“Today, all of the tools that land banks have are needed at a higher level where before it was a triage of problems,” Larkin says.