Plot Twist

When law professor Frank Alexander wrote the book on land banking, he didn't expect it to help solve a foreclosure crisis

In 2005, two years before America's housing bubble burst, Frank Alexander, Sam Nunn Professor of Law and director of the Project on Affordable Housing and Community Development at Emory's School of Law, was finishing up a book he'd begun at the urging of colleagues.

To the average reader, Land Bank Authorities: A Guide for the Creation and Operation of Local Land Banks would surely appear arcane. The seminal text on a little-known practice, it was designed to assist public officials in America's older industrial cities in addressing the legal barriers—property-tax delinquencies, fractured titles to land, substandard housing, and building code violations—that had long prevented them from putting abandoned parcels into productive use.

Land banks, Alexander argued, offered these struggling cities a powerful tool for going forward—a program through which municipal authorities can acquire, hold, develop, and ultimately resell blighted buildings and dilapidated homes. The book, he believed, could serve as a road map for city leaders looking to rediscover the value of that urban land.

Yet no one, not even Alexander, could have predicted just how important that tool would be in years to come. In 2005, there were just a handful of successful land banks—all of them concentrated in the declining inner cities of the Rust Belt. Today, mainly in response to the devastating effects of the economic and housing crises, there are more than eighty nationwide, with more and more states considering comprehensive land bank legislation every month.

And suddenly Alexander finds himself at the center of a national conversation that is anything but arcane.

Since the beginning of 2007, more than four million Americans have experienced foreclosure. Housing prices have plummeted by 40 percent from their 2006 highs, leaving some 14.6 million more homeowners "underwater"—with mortgage debt greater than what their houses are worth. And economists predict that as many five million of those will move into foreclosure before the crisis ends.

As a result, the mass vacancy and abandonment once unique to the Great Lakes factory towns is now epidemic, inflicting further pain on already hard-hit housing markets in cities across the country. America's glut of vacant homes—approximately 1.2 million more than there would be in normal economic times—adds fuel to the fire of the economic crisis.

"Vacant and abandoned properties quickly become liabilities," Alexander told a congressional subcommittee in May 2008, just as the Bush administration was taking its first timid steps to alleviate the crisis and the Dow Jones industrial average was beginning its long descent from 13,000 points.

Standing before a panel tasked with implementing the federal financial assistance promised by the pending Neighborhood Stabilization Act, Alexander described the trend's attendant ills: declining property values and property tax revenues, increased costs of code enforcement activities, increased costs of police and public safety surveillance, increased incidence of arson, and fears of social engagement, to name a few.

Those can add up, Alexander said, to a significant sum. Writing in Land Banks and Land Banking—an updated and expanded version of the original 2005 text, published last year—Alexander cites several case studies as proof of the damage done. In Philadelphia, homeowners have seen the value of their homes drop by an average of $8,000 as a result of the increase in vacant and abandoned properties, while the city itself has been saddled with more than $20 million in annual maintenance costs.

In Ohio, some twenty-five thousand vacant and abandoned properties scattered across the state's so-called Big Eight cities have imposed a staggering $64 million toll on local governments in the form of "city services" and lost tax revenues. And in Flint, Michigan, home to the state's second-highest vacancy rates at 21 percent, it was found that property within five hundred feet of a vacant and abandoned structure lost an average of 2.26 percent of its value.

Sitting in his law school office, Alexander points to another, less publicized outcome of the crisis: the disruption of the school system. "No one saw that coming," he says. "But in hindsight, we can see that every single tract of vacant and abandoned property imposes costs on the adjoining properties, on the fabric of the neighborhood, on the vitality of the community."

And so the creation, in January 2010, of the Center for Community Progress. Founded by Alexander and former Genesee County Treasurer, now congressional candidate, Dan Kildee of Flint, Michigan, the nonprofit organization aims to meet the growing need for effective, sustainable solutions to America's problem properties. With offices in Flint, New Orleans, and Washington, D.C., it's poised to make an impact both on the ground and in legislative chambers around the country—to turn, as Alexander puts it, "vacant spaces into vibrant places."

Forty-two years ago, Frank Alexander watched the moon landing from a smoky bar in the south of France. A high school student on a summer program in Paris, he'd joined a group of classmates for a trip to the coast. And incredibly, a quarter-million miles away and yet right there in black and white, Neil Armstrong was taking one small step, one giant leap, from the lunar lander to the future.

"It fundamentally changed my view of the world, of life, and of the possibilities for advancement of our societies," he told an Emory audience in fall 2010.

The occasion was Alexander's investiture as the Sam Nunn Chair in Ethics and Professionalism, and the lecture—to students, faculty, and alumni assembled in Miller-Ward Alumni House—was a kind of statement of principles. As dazzled as he had been by the sight of Apollo 11 on that summer night in 1969, he was equally in thrall, he confessed, to the live video of remote operating vehicles (ROVs) as they worked to stanch the river of crude spewing into the Gulf of Mexico from the sunken Deepwater Horizon rig.

And while he marveled at the precision of those ROVs on the ocean floor, he also lamented the hubris that had led them there. "The fact that our human ingenuity says we can do something doesn't mean we should," he said.

The same hard lesson can be applied to the current housing crisis and its insidious second wave of vacancy and abandonment: "Yes," he said, "we can create an infinite variety of mortgage products, and if we package them in pools sufficiently complex, there are investors who will buy them." But that doesn't make it right.

More recently, in Alexander's office on a cool October afternoon, the phone is ringing for the fifteenth time that morning, and chances are it's another reporter—from CNN or NPR or the Wall Street Journal, or perhaps that producer at NBC's Rock Center with Brian Williams who'd emailed him just moments ago.

The media have a growing interest in what a land bank is, and they want to learn it from the nation's leading expert—the same one whose congressional testimony led to the first formal recognition of land banking in federal legislation with passage of the Housing and Economic Recovery Act of 2008.

Alexander always knew he wanted to have a positive impact. But he wasn't always sure how that would take shape.

In 1973, Alexander had just graduated from the University of North Carolina and taken his first job with the Southern Regional Council, a civil rights organization based in Atlanta. But he was wrestling with the question of whether to go to law or divinity school. Unable to make up his mind, he went to James Laney, then dean of Candler School of Theology, for advice.

"He said to me, 'Hey Frank, you're asking the wrong question. It's not either/or. It's why not do both?' "

When the two met again five years later, Alexander had a JD and a master's in theology from Harvard, and Laney was the seventeenth president of Emory. "Part of his vision for Emory was to knock down the isolation of the graduate schools and to build on their strengths in an interrelated fashion," Alexander says of Laney. "And part of that was to promote the work in law and religion."

In 1982, Alexander came on board to further that work, founding the Center for the Study of Law and Religion (CSLR) at a time when virtually no law school in the country was engaged in serious scholarship on the subject.

"In 1980, law schools were embarrassed to talk about the study of religion or theology or faith," Alexander says. Today, he adds, no serious school of law would shy away from questions concerning law and religion or deny them their place in legal education.

For Alexander, his dual training was indispensable. "I decided in my first year of divinity school that I wasn't called into the ordained ministry," he says. "But for me it was really just a question of whether I wear a clerical collar or I come to understand my ministry as much more broadly defined."

As an authority on the advantages and complexities of land banking, Alexander serves as a critical resource for Chris Norman 88C, executive director of the Atlanta Land Bank Authority (LBA) and president of the Georgia Association of Land Bank Authorities.

"Having an expert like Frank in your back yard has been a huge benefit to us," Norman says. "We're lucky to have him."

A math major and Martin Luther King Jr. Scholar at Emory, Norman grew up in southwest Atlanta, not far from the Pittsburgh neighborhood that has borne the brunt of the city's housing woes. At just under 50 percent, the neighborhood's vacancy rate is among the highest in the nation.

Norman came to land banking from investment banking. He earned his MBA at Northwestern's Kellogg School of Management in 1993 and spent the next sixteen years in finance. It wasn't until Norman joined the LBAs board in 2004 that he really understood what banking land was all about.

"It was a real education at first," he says. "Most people have never heard of this whole notion."

But that's beginning to change. Last year, New York became the latest state to pass legislation allowing cities and counties to form land banks, and Pennsylvania is expected to follow suit. And as the number of land banks grows, so does their role in recovery efforts. Last fall, for example, Ohio's Cuyahoga County Land Bank drew attention for overseeing the destruction of more than 645 homes in and around Cleveland, ground zero for the housing crisis.

That hasn't happened in Atlanta, says Norman, because, unlike Cleveland and other Rust Belt cities, "we're not losing population." Rather than demolish vacant homes, he says, the Atlanta LBA facilitates rehab and restoration. By using an innovative "depository agreement program," Norman and colleagues have managed to alleviate the effects of foreclosure on some of the city's hardest-hit areas. Designed in 2007 by Alexander, the pioneering program allowed nonprofit community development organizations to deposit properties in the Atlanta Land Bank, where they could be maintained and held tax-free. That turned out to be a serendipitous development.

"The program was not designed with the foreclosure crisis in mind," says Alexander. "It was designed to deal with the fact that our nonprofit housing entities had land, but weren't ready to build because they didn't anticipate buyers at the back end." But when the crisis hit, he says, "Atlanta was well positioned to use the federal funding to bank vacant properties."

Land banks across the country have since replicated the program, and Norman says the Atlanta LBA aims to scale up in the months ahead. In March, the Georgia legislature passed a revised Land Bank Act, a bill in which Alexander and Noman both played key roles. The latest legislation doesn't significantly alter the program, but clarifies and streamlines some of the deep legal complexities.

"The passage represents a significant milestone in the evolution of land banks in the Georgia," Norman says. "The new legislation will significantly improve the utility of land banks and allow for the creation of regional entities for increased efficiency. We are excited to do even more to assist with resolving the issues brought on by the foreclosure crisis. The guidance provided by Frank and the Center for Community Progress was invaluable."

I already knew I wanted to work on sustainability issues," says Mandy Mahoney 99OX 01C 06L, vice president of the Southeast Energy Efficiency Alliance, a nonprofit based in Atlanta. "But Frank taught me how to connect concepts of sustainability to land-use planning. He added a layer of insight that I wouldn't have gotten any other way."

Alexander's example inspired the Emory Student Bar Association and students like Mahoney to select him eight times as the Professor Who Best Exemplifies the Ideals of the Legal Profession, and earned him the 2006 Thomas Jefferson Award, Emory's highest honor for service.

"As an advocate and as someone deeply involved in social issues, he brings a level of humanity to the law that you don't normally see," says Mahoney. "He lives it and speaks it to his students, and that's really what gave me the courage to keep my convictions and go the nontraditional route."

That route led her from Emory to the Atlanta mayor's office, where Mahoney was part of the team that launched the city's innovative BeltLine redevelopment and transportation project in 2006. After a stint as a consultant to then-Mayor Shirley Franklin, the Macon native became the first director of Atlanta's new Division of Sustainability and drafted the city's first official sustainability plan.

Published in October 2010, "Power to Change" outlines an ambitious effort to make Atlanta one of the nation's top ten sustainable cities, with goals to reduce electricity consumption, improve water and air quality, and expand access to fresh foods.

"One thing we did was forge partnerships with other NGOs [nongovernmental organizations] like Georgia Organics, the Atlanta Local Food Initiative, and Emory to figure out how to change the laws to be more supportive of sustainable agriculture," Mahoney says.

According to Mahoney, one of the obstacles to urban agriculture in Atlanta was an outdated zoning code. By amending it to allow for farmers' markets to be legally distinct from other outdoor vendors, city officials opened the floodgates to a frenzy of green growth.

Now metro Atlanta is home to some two hundred urban farms of various types and sizes—everything from the educational Oakhurst Community Garden, with its classes on chicken-keeping and cheese-making, to the Our Community Farm Project in Decatur, where refugee women work the earth much as they did in their native Burundi.

Probably the most high-profile agricultural enterprise is Atlanta's Trinity Avenue Urban Farm. Set to open this spring on a vacant one-acre plot across from City Hall, the farm is intended to showcase how fresh food can be grown locally and sustainably, eliminating the need for transport, which drives up prices and pollutes the air. Located on the site of the old Atlanta Traffic Court building, it's also a prime example—like Norman's work with land banking—of how vacant and abandoned property can be put to productive use.

In fact, Norman and Mahoney may find themselves working together in the future.

"That's something we're examining right now," says Norman. "We've just engaged a group at the Urban Land Institute to look at how we can launch initiatives focused on urban agriculture, either with our current inventory or with soon-to-be acquired properties."

Today's land banks are feats of legal ingenuity that have helped foreclosure-ravaged communities stem the disaster and sow the seeds for future recovery. Once used only episodically and in the poorest pockets of the country, they're now part of a federally recognized tool kit being used to combat the housing crisis.

Yet land banking, says Alexander, is only part of the solution to a problem that goes to the very heart of who we are.

"Our culture, unfortunately, has come to regard land, real estate, homes, and buildings simply as items for consumption," he says. "We acquire it and we use it, and when it's no longer useful to us, we throw it away."

Public nuisance law has long prohibited using vacant land in a way that harms others, he adds. "But what we haven't done enough of is say to owners, You're harming us now. And if you're not going to fix it up, or pay to clean it up, then we expect you to give it up."

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