West Virginia City Forms a “Land Bank” Program to Protect Tax Liens from Out-of-Town Investors

In an effort to protect its local tax-indebted properties, the city of Huntington, West Virginia recently formed a land bank program under its Huntington Urban Renewal Authority (HURA). The land bank program is intended to keep local properties with unpaid taxes out of the hands of out-of-state landlords by purchasing unpaid tax liens if the owner fails to redeem the lien within 18 months of the original tax sale. The land bank will pay all past-due taxes as well as fines, the current year’s taxes and interest accrued, using a credit line from a local bank. In 2010, the authority purchased $430,786.55 worth of tax liens.

While the purchase of city tax liens by the city when it is Huntington itself that is owed money may be questionable, a bigger ethical issue has now come to light. City council members appear to be benefitting from the requirement that tax lien buyers be local should they wish to ultimately take possession of the property, and many are bidding the minimum on properties at tax sales and may even be using the new land bank program to drive competition away.

At this time, the issue is nothing more than a concern. No charges have been filed, and while some purchases have “set off a blinking light among constituents” according to the Huntington News, most people just want to hear an explanation. The land bank’s official goal is to take the tax liens it takes control of and ultimately, if they are not redeemed, “sell them to responsible owners for rehabilitation.”

Do you think that this is a good practice for the city?

Thank you for reading! Your comments and questions are welcomed below.