Study Committee To Take Close Look At Land Bank Legislation

The detour proved timely when federal prosecutors accused the head of the Indianapolis Land Bank and other officials of taking part in a kickback scheme.

House in residential area

Photo: James Thompson (Flickr)

The Indianapolis Land Bank acquires abandoned properties and transfers them to nonprofit groups for redevelopment.

Last month’s indictments over the operations of the Indianapolis Land Bank came weeks after legislators balked at expanding the program.

Counties already have the ability to create land banks, which transfer abandoned properties to nonprofit groups for redevelopment. But many counties have been concerned the program could cut into the money they are able to collect by auctioning properties at tax sales.

Co-sponsor Justin Moed (D-Indianapolis) says legislators should consider rules to prevent nonprofits from simply flipping properties.

“The nonprofit wasn’t at all designed to find a resident for the home, they were just selling it to a company. So you want to make sure there isn’t this system where you have a nonprofit strawman going in and buying a property just to get the low discounted rate,” Moed says.

Indianapolis is the only Indiana city with land-bank authority. A bill to let other cities do it was shipped to a study committee because cities and counties were at odds over who should shoulder the responsibility and cost.

The scandal probably helped the proposal in the short term. A similar bill was recommended for a study committee last year, but legislative leaders declined to put it on the summer agenda.

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