Analysis: Genesee County Land Bank Threatens Private Property Rights

By Russ Harding | Aug. 5, 2010 |

A fundamental debate is occurring throughout America regarding who is best able to make decisions regarding the use of property — individuals in a free market or government officials. Nowhere is this debate more prominent than through local zoning and planning controls often referred to as "smart growth."

Genesee County has taken government control of private property to a whole new level with the Land Bank; a centerpiece of the Genesee County Urban Land Redevelopment Initiative. Utilizing the legal authority of PA 123 of 1999, which makes it easier for local government to obtain tax reverted property, county officials have aggressively moved to acquire tax- foreclosed properties. According to an investigation by Cathy Shafran of WJRT in Flint, the Land Bank is now responsible for more than 7,000 properties, including 2,300 abandoned homes.

Private ownership of property has been a mainstay of the American political and economic system since the founding of the country. Private property rights are guaranteed in both the U.S. and Michigan Constitutions. Americans have been traditionally supportive of government ownership of property when it serves a public purpose such as a school, highway or park. The Genesee County Land Bank, however, seems to go well beyond the traditional purposes of government ownership of property. The county is in effect acting as a real estate agent and landlord. Some have accused the county of being a slum landlord due to the blighted condition of much of the property y in the Land Bank.

According to former Genesee Country Treasurer Dan Kildee, "With funding from the C.S. Mott Foundation, Genesee County engaged a local consulting team and a number of national partners in developing a more creative approach to use tax foreclosures as a community development tool. .....The (Land Bank) is funded with proceeds from the tax foreclosure process, and allows the county to acquire land through foreclosure and determine the best use of land with the community's needs in mind...." Kildee's statement appears to indicate the primary reason for the Land Bank is to remake the community to conform to the county's official land use vision.

The very existence of the Land Bank sends a chilling message to property owners as well as potential real estate investors. County officials have a free reign to implement their utopian vision of smart growth land use policy through the Land Bank. It is not hard to imagine the removal or relocation of entire neighborhoods "with the community's needs in mind."  

Flint is undergoing hard times. The city has lost more than 60,000 jobs and approximately half of its peak population in recent decades The Land Bank, however, will not help to reverse the decline of the city but instead will serve as a barrier to the private investment necessary to revitalization. The last thing potential investors want is uncertainty. Unfortunately the Land Bank provides much uncertainty as the private sector is susceptible to the land use planning whims of county officials. Although the Land Bank may be well intentioned as with many government programs it causes more problems than it solves and it should be dissolved.

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Russ Harding is director of the Property Rights Network at the Mackinac Center for Public Policy, a research and educational institute headquartered in Midland, Mich. Permission to reprint in whole or in part is hereby granted, provided that the author and the Center are properly cited.

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