Housing Market and the Activities of Land Banks in Socioeconomically Distressed Neighborhoods in Cleveland, Ohio, the United States

Abandoned and vacant properties are a serious urban issue as blight induces further blight. Real estate prices are nominal in some parcels in blighted neighborhoods. Also, subprime lending hit low-income neighborhoods the hardest. Moreover, foreclosure sales sometimes malfunction due to speculators.

Cleveland, Ohio has lost more than 50% of its population from the peak. In case of Cleveland, distressed neighborhoods are found in the east of Cuyahoga River, especially areas bisected by Cleveland’s primary corridor that connects Downtown and University Circle. Draft Cleveland Sustainable Development Pattern guides development and housing to high-priority zones. The map shows development horizon of short term, medium term and long term. Ordinary as well as distressed neighborhoods tend to be left “blank” or at best categorized as long term.

Land bank is an effective tool to repurpose blighted properties to productive use. Cleveland has a unique two-strata land bank system. The City of Cleveland Land Bank, a city government program, has existed since 1976 and now owns over 11,000 lots on conditions that such lots have no structure. Cuyahoga County Land Reutilization Corporation, an innovative land bank established in 2009, acquires properties including with structures from various sources: tax foreclosure, national mortgagers, REOs and deed-in-lieu. The two land banks work in partnership.

This paper quantitatively clarifies the situations of Cleveland’s highly distressed neighborhoods and discusses how to tackle the issue of distress. Analyzed are private real estate transaction, foreclosure flings, Sheriff’s sales and acquisition/sales by land banks as well as socioeconomic indicators including income, poverty and vacancy. The historical perspective, year 2000, 2006 (pre-housing crisis) and 2012, is put an emphasis. Stabilization of neighborhood and (re)creation of social capital are discussed through a case study of Reimagining Cleveland, a pilot program till 2015 to utilize City Land Bank-owned vacant lots by indigenousness of a community.