Land Bank

What Is a Land Bank?

A land bank is a public entity set up to take in vacant, abandoned, and deteriorated properties and get them back into productive use. Many of these properties have years of unpaid taxes, tangled titles, or repair costs higher than their market value, so private buyers pass them by. A land bank acquires them, maintains them, and transfers them to new owners. Those owners might be homebuyers, nonprofit developers, neighbors, or community groups.

How a Land Bank Works

Land banks are usually created by a local ordinance, using authority granted by state law. Some are called land reutilization authorities or corporations. As of June 2026, 20 states and Puerto Rico had passed land bank enabling laws, according to the Center for Community Progress. Delaware did so in 2015. In states without an enabling law, a nonprofit or a government department may run a “land banking program” that typically lacks the full set of powers.

According to the Center for Community Progress, land banks ideally can:

• Acquire tax-foreclosed property at low cost
• Extinguish old liens and clear title
• Hold property without paying property tax
• Sell based on the best outcome for the community, not the highest price

Most acquisitions are vacant, tax-foreclosed homes and lots. Land banks can also take bank-owned properties, transfers from other agencies, and donations. Funding typically comes from local budgets, grants, and property sales. Michigan and New York let land banks recapture 50% of the property taxes on properties they return to the tax rolls, for five years.

Land Bank vs. Community Land Trust

In many places, the two work together. The land bank assembles and clears lots, and the land trust builds homes on them and keeps them affordable.

Why It Matters for Workforce Housing

In older cities with many vacant lots, a land bank can turn them into sites for modest infill homes. Low land cost can help bring a new starter home within reach of moderate-income buyers.

Land banks have limits. They work best where vacant, low-value property is plentiful. In high-cost markets, far less property sits vacant or goes through tax foreclosure, so a land bank has less to work with. Their community-driven sales decisions also depend on transparency and resident involvement to keep public trust.

The phrase “land banking” is sometimes used more loosely for any public or nonprofit purchase of land ahead of future development. That is a different practice from the state-authorized entities described here.