Starting with 100 properties priced from $2,000 to $5,000, the Wilmington Land Bank is hoping to transform blocks, even neighborhoods, that have seen better days
More than 40 years ago, Wilmington stepped forward as a national leader in creating initiatives to decrease the number of tax-delinquent properties in urban areas.
In 1973, Mayor Thomas C. Maloney and City Council established an urban homesteading program that awarded properties to qualified buyers who pledged to fix them up and make them their homes. The price: one dollar.
At the start, the program proved so popular that a lottery was held in 1974 to choose the winners of the first available houses. A DuPont Co. attorney, Daniel S. Frawley, was the first name selected. He chose and rehabbed a home at 801 W. 10th St., triggering a revival of the now popular Trinity Vicinity neighborhood. Frawley went on to become a member of the Wilmington Board of Education, a member of City Council and, finally, the city’s mayor from 1985 to 1993. (Frawley died of a heart attack during a basketball game in 1994 at the age of 50.)
Over time, the homesteading program fell by the wayside, and the problem of blighted and tax-delinquent properties endured. Currently there are about 1,400 vacant and blighted parcels in Wilmington.
So the city has turned to a new mechanism, the Wilmington Neighborhood Conservancy Land Bank, to take on the challenge of transforming blocks, and even neighborhoods, that have fallen on hard times.
As the new year began, the land bank had assembled an inventory of about 100 properties and was getting ready to offer them to interested buyers, most likely by the end of January.
The purchase price will be more than the single dollar that Dan Frawley and the other early homesteaders paid, “but it will be relatively low,” on the order of $2,000 to $5,000, says Christian Willauer, the land bank’s executive director.
But the expectation, Willauer says, is that the buyers will have to spend $100,000 or so to make the properties habitable. “They’re definitely fixer-uppers,” she says. “They’re not move-in ready. Many will need new electric, new heat, new plumbing.”
Land banks got their start in the United States in 1971, in St. Louis. As with Wilmington’s original homesteading program, they were seen as a way to combat the blight that developed as urban industries collapsed and city residents fled to the suburbs. Interest in land banks revived about a decade ago with the real estate market collapse and the foreclosure crisis that followed. There are now about 200 land banks nationwide.
Interest in a land bank for Wilmington began developing about five years ago. Then, in 2015, the General Assembly passed a law authorizing local governments to create land banks, and the Wilmington City Council did that later in the year. It took most of 2016 for the land bank to organize a board of directors, secure its nonprofit status, write bylaws and take care of related legal issues. Last February, it hired Willauer, who had been the head of Cornerstone West, the economic development arm of the West End Neighborhood House, as its executive director. The organization’s only employee, she spent most of last year pulling the organizational pieces together—raising money, securing insurance, developing a system for managing properties, and figuring out a process for finding good owners for rundown properties.
The land bank is getting started with about $3 million in seed money, which will be used primarily to buy and manage properties. The city put up $1.5 million and the state kicked in $645,000 from its Strong Neighborhoods Housing Fund. Then Barclaycard US stepped forward with a $1 million grant—“more than we’ve ever given before,” according to Joceyln Stewart, the bank’s community reinvestment officer and a member of the land bank’s board of governors.
The city and Barclaycard contributions have a shared purpose, but they were made for different reasons.
“The city has not supported this function very well,” Mayor Mike Purzycki says, referring to its oversight of blighted properties. He thinks the land bank can do it better. “You’re taking a responsibility away from agencies that have multiple tasks and giving it to an agency that has one focus: redevelopment and conveying properties to developers,” he says.
City Council President Hanifa Shabazz says she expects the land bank to “work in concert with the city to convert vacant, abandoned and blighted properties and lots to stimulate economic development and neighborhood revitalization.”
While Purzycki looks back and sees ineffectiveness, Stewart looks forward with a hopeful eye. “We believe this can make a difference—citywide,” she says. “There are a lot of us here who really believe in Wilmington, who love this city and will rally behind it.”
Three types of programs
The land bank’s current holdings, Willauer says, are a mix of structures and vacant land, most of them transferred from the city’s stock of abandoned properties. By the end of 2018, she expects the inventory to grow to about 300 parcels and anticipates it will stabilize near that level, with the land bank selling off about as many properties as it acquires on a year-to-year basis.
Willauer says the land bank, as it gets up and running, will have three types of programs: homesteading, urban gardening and side lots.
In the homesteading component, rundown structures will be sold to qualified buyers who commit to rehabilitating the properties within one year of acquisition.
As of mid-December, the details of the homesteading system were still being worked out. Basic rules will likely include requirements that buyers can’t owe the city any money for back taxes or delinquent utility bills and that they will have to meet rehab specifications within a year or risk having to turn the property back to the land bank. “There will be some clawback provisions to hold the buyer accountable,” Willauer says.
What is for certain is that prospective buyers would receive a set of specifications from the land bank, detailing improvements that would have to be made to the property. They could then share those specifications with contractors and financial institutions to determine how much the work would cost and how much financing they could secure.
Interested parties would then submit their plans to the land bank board, and those who submit the most complete proposals would be awarded the properties, Willauer says.
The homes, mostly traditional row homes, vary in size, but most have two to four bedrooms. They tend to be in neighborhoods that don’t get a lot of activity in the local residential real estate market. “They need a more targeted approach to get back into use,” Willauer says.
While she often uses $100,000 as a ballpark figure for rehabilitation costs, the actual price will depend on the buyer’s taste and needs, because the condition of the homes will give purchasers plenty of leeway on things like designing and equipping the kitchen, baths and laundry areas.
One of the goals of the homesteading effort is to provide housing opportunities to renters and to those who lost their homes during the foreclosure crisis, Willauer says. To help achieve that objective, the land bank plans to assist buyers by work with agencies like the Delaware State Housing Authority on financing packages and Habitat for Humanity for first-time homeowner counseling.
“We’re not looking for gentrification,” Stewart says. “We’re interested in growing wealth.”
A variation of the land bank’s homesteading initiative involves partnering with organizations like Habitat for Humanity of New Castle County. Habitat likes to secure packages of adjoining properties so it can transform entire blocks, and the land bank, by acquiring foreclosed properties through the city and purchasing nearby properties on its own, can make that happen.
Recently, Habitat transferred ownership of a property it owns on East 22nd Street to the land bank, which already owns an adjacent property. For now, the land bank is maintaining both parcels. When Habitat is ready to begin its construction project, the land bank will transfer ownership of both parcels to Habitat.
Similarly, in West Center City, an area that Purzycki and Shabazz have targeted for revitalization, Willauer expects the bank to become involved in assembling adjoining parcels into a contiguous package for redevelopment.
When Willauer speaks of “urban gardening,” she offers a range of possibilities for vacant lots or parcels that contain structures for which demolition is the best option. In some situations, residents of a block or a neighborhood association might want to acquire a lot that could be transformed into a community garden or a pocket park.
Rather than sell such properties, the land bank would consider lease arrangements with community groups, she says.
“Side lots,” smaller properties held by the land bank that are adjacent to owner-occupied homes, might not be suitable for redevelopment but they could make attractive additions to the footprint of the homeowner’s property, Willauer says. The land bank will work with homeowners on how to annex these side lots to their properties.
“Our overall goal is to get all these properties back into use,” she says.
The urban gardening and side lots programs were launched in early January. Regulations and forms to apply for acquiring properties are posted on the land bank’s website, wilmingtonlandbank.org.
“Our work should be consistent with neighborhood plans, and will require greater coordination,” she says. “If a community sees open space as a priority, or if it sees increased home ownership as an objective, we want to work with neighborhood organizations and civic associations to make sure we’re fulfilling the goals and the vision that residents have for their neighborhoods.”
By promoting home ownership and working closely with civic groups, the land bank should promote community development and help create safer neighborhoods, Willauer says.