Land Bank Update

Published: Tuesday, August 26, 2008 12:19 PM PDT

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The New York Times' Vikas Bajaj takes a look today at an idea catching on in a few cities in the country to deal with foreclosure.

The idea is to use some combination of government and business funds to purchase foreclosed homes:

Using taxpayer and private money, Boston, Minneapolis, San Diego and a handful of other places are buying foreclosed properties to refurbish and resell them to developers and homeowners in an effort to prevent troubled neighborhoods from sliding into urban decay.

The efforts so far have been taken on a small scale. But local officials say they can become an important pillar of any housing recovery with the help of $4 billion in federal grants that were part of a housing bill Congress approved in July.

I've written a bit about the San Diego plan, called a land bank. The plan would raise private and government funds to purchase foreclosed homes in the region and keep them from becoming blighted.

The Times has an update on the local version of the plan, spearheaded by Jim Bliesner at the City-County Reinvestment Task Force:

San Diego, a city grappling with swaths of foreclosures, is better positioned to take a more sweeping approach. Officials there are raising private money to acquire, refurbish and resell hundreds of properties. Investors including the California State Teachers’ Retirement System and the Washington Mutual bank have committed $20 million so far, said Jim Bliesner, director of the San Diego Reinvestment Task Force, which plans buy its first homes by the end of the year.

"This has to be large enough to deal with the problem at scale," Mr. Bliesner said. "We have 14,000 properties in foreclosure. If we fix up four of them, it doesn’t make a difference."