Newark Hopes a Land Bank Will Help Revitalize its Neighborhoods

Newark is getting into the land-bank game this month, with a plan to sell around 100 vacant lots for a range of redevelopment purposes, including Section 8 homeownership.

Downtown Newark, NJ (Photo by Axel Drainville / CC BY-NC 2.0)

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Starting this week, a newly formed land bank in Newark, New Jersey, will begin accepting bids and redevelopment proposals for around 100 vacant lots and buildings. And so far, says Annette Muhammad, the senior vice president of land bank operations for Invest Newark, the group that manages the land bank, there seems to be a lot of interest. As of last week, Muhammad says, more than 1,000 potential applicants had already registered on the website.

“We suspect that our initial inventory is going to go quickly,” she says.

The Newark Land Bank is the first to launch in New Jersey after Governor Phil Murphy signed enabling legislation in 2019. Land banks are designed to help cities dispose of long-vacant properties for a variety of purposes, from housing to commercial redevelopment and green space. When the Newark City Council voted to create a land bank last spring, Mayor Ras Baraka said it would give the city “the opportunity to be very creative, imaginative and expeditious about how we deal with properties that have been blighted for decades.” In a release earlier this year, Baraka said that launching the website is “an important landmark in our strategy of building wealth for Newark residents by increasing home ownership and property ownership.”

The land bank is hoping to avoid the pitfalls of the city’s last major property sale. On Valentine’s Day in 2015, as reported, the city sold off 100 vacant lots to Newark couples at $1,000 apiece. But it didn’t vet their ability to actually finance or build new construction on those lots. And after a year, owners of more than half of those lots had been unable to move forward. After five years, according to a report in NPR, only three homes had been built, and half the lots had been returned to the city. As a hedge against a similar outcome, the land bank is requiring that applicants provide “basic personal or business information, a feasible development plan for the property of interest where rehabilitation is required, and proof of financing for the purchase or proposed development.”

The city did not respond to requests for an interview.

The first hundred properties that the land bank will offer were transferred from city ownership, Muhammad says. Invest Newark has spent the last year working with community organizations to develop goals for the reuse of the city’s surplus property.

“The overarching goals are of course to reduce our blight, and to return some of these vacant and abandoned properties to the tax rolls,” Muhammad says. But more specifically, she says, the group hopes the land bank will extend the revitalization of Newark’s downtown out into its neighborhoods, promote business ownership, create opportunities for minority and women-owned businesses and contractors, establish new parks and green spaces, and expand affordable housing, and help first-time homebuyers acquire houses.

“We tried to create a lane for everyone,” Muhammad says.

As the New York Times recently reported, Newark is seeing a “flurry of redevelopment,” even as more than a quarter of its residents live in poverty. According to a report from the Urban Institute, Newark has very low rates of homeownership, particularly among Black and Hispanic residents. It also has a higher-than-average unemployment rate, and most workers commute outside of the city for their jobs, according to the report. But vacancy there is on the decline.

Cities around the country, mostly in the eastern U.S., have turned to land banks to address a variety of problems associated with blight and vacancy. And land banks serve different functions based on local conditions, says Brian Larkin, director of the National Land Bank Network at the Center for Community Progress.

“In some of your more distressed markets, your land bank is really helping spur hope, create ideas, and rethink spaces that have been neglected,” Larkin says. “When you’re looking at more of your emerging markets, reviving markets, it’s about, how can you protect these spaces for those who don’t have access?”

When cities are launching land banks, they should identify the most high-priority needs in their communities, says Jovan Hackley, the director of communications for the Center for Community Progress.

“Do they need housing? Do they need food access? Do they need a community center or resources?” Hackley says. “In some cases in some places it’s just, clear the land so it’s not an eyesore and not a danger to people. But those are conversations that should be encouraged at the founding of the land bank.”

The Center for Community Progress is planning to launch a survey of land banks nationwide this month to learn more about which strategies are most effective for disposing of vacant lots and redeveloping them for productive uses. Land banks have been used to varying degrees of impact in different cities. In Philadelphia, for example, the land bank is still ramping up its process for selling vacant properties nearly a decade after it was created, as WHYY recently reported.

For Newark, the land bank is a chance to advance a number of goals, says Muhammad. On the housing front, the land bank will include opportunities for people with certain Section 8 vouchers to use down-payment assistance programs to take over vacant homes, work with minority- or woman-owned contractors to rehab them, and own them long-term. The land bank also plans to collaborate with community organizations on redevelopment projects, and to prioritize opportunities for local jobs.

Most importantly, Muhammad says, the land bank should be transparent — and more efficient than the city’s existing land-sale process, which requires legislative approval for each purchase. The land bank board will first determine that applicants are not “bad actors,” Muhammad says, without tax liens or code violations on other properties. Then it will vet the proposals, and the applicants’ ability to follow through on them. Muhammad says the lot sales won’t be run as a simple auction, where the highest bidder automatically wins.

“The auction game tends to be for speculators and investors,” Muhammad says. “It’s not about the highest offer. It’s about the best offer.”

The land bank has posted a series of video tutorials to help potential buyers learn more about acquiring property for different purposes. It also has a community advisory board, and Invest Newark plans to hold more community meetings as the land bank begins selling its properties, to make sure it’s serving the right purposes.

“What you’re proposing for our community — is that what our community needs?” Muhammad says.

This article is part of Backyard, a newsletter exploring scalable solutions to make housing fairer, more affordable and more environmentally sustainable. Subscribe to our weekly Backyard newsletter.

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Jared Brey is Next City's housing correspondent, based in Philadelphia. He is a former staff writer at Philadelphia magazine and PlanPhilly, and his work has appeared in Columbia Journalism Review, Landscape Architecture Magazine, U.S. News & World Report, Philadelphia Weekly, and other publications.

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