Landbanks Address Abandoned Properties Problem

Abandoned properties are a major issue throughout the Mountain State, and some communities are utilizing landbank programs to address the problem.

Population decline and an over abundance of housing has left the Mountain State littered with abandoned homes, and communities are looking to solve the issue through landbank programs.

According to Huntington’s Fire Marshall, Mathew Winters, people who have moved away often inherit property from their parents. When the home becomes a financial burden the new owners are often unable to care for the home and they leave it to sit and rot.

Water damage is the biggest enemy of a home, and Winters noted that once the roof leaks, the water makes its way to the foundation. The added water damage changes how the building burns if it catches fire. He said abandoned properties are hazards where fires can spread to neighboring properties.

“Several years ago we had a fire in a vacant house that had only been vacant about six months,” Winters said. “The exposures on both sides caught fire. One of those exposures was a total loss and a very sweet lady lived there. She lived there 54 years and she lost everything because of that vacant property.”

Chrystal Perry is a demolition specialist for Huntington and a founding member of the West Virginia Abandoned Properties Coalition. She said abandoned properties are also a hazard to the first responders.

“If a property catches on fire, our first responders are going to go into that not knowing what a hazard lurks behind that door,” she said. “Do those first responders know that on that second floor there’s a gaping hole that they can fall in?”

Abandoned properties are also a danger to the people desperate enough to use them as a temporary shelter. Often, homeless people start fires in the building for warmth and in order to cook food.

“I got called to a fire. We were trying to figure out how in the world the fire started with no utilities,” Winters said. “Come to find out, they’d actually broken in through the crawlspace under the house, and cut a hole in the floor. Had they been in there when that fire started, their exit path was blocked.”

These hazards extend to West Virginia’s rural communities, where the majority of firefighters are volunteers.

Perry identified tax delinquency as a major contributor to Cabell County’s abandoned properties. Out-of-state investors often buy property through the county tax sale, and then neglect the property. These properties enter what Perry calls a “tax sale purgatory.”

“They would do a minimal amount of work, put a renter in it, and then when our code enforcement building inspectors got into the property, they would just flip that. They end up at a state tax sale, and by the time they get there, nobody wants them,” Perry said. “Then all that’s left is for the city to come in and spend thousands of dollars to remediate that problem.”

Perry and the West Virginia Abandoned Properties Coalition are part of a state wide push to rethink how communities approach abandoned properties.

One approach is landbanks. Landbanks are tools for communities to acquire tax delinquent properties, demolish the property when needed, and find new owners for the acquired property. Landbank legislation exists on the local and state levels across the country, but laws vary between states and local governments.

There are city wide landbanks such as Charleston Land Reuse Agency, county level landbanks like the one in Logan County, and the West Virginia Land Stewardship Corporation which acts on the state level.

“Now with the landbank, we have that tool if we can find that owner to donate that property to the city’s landbank and suddenly we can cut the grass, take care of the property, but most importantly we can find a new owner for that property,” Perry said, noting that the Huntington Landbank helps the city more effectively manage abandoned property.

Can Rehabilitating Historic Buildings Help W.Va.'s Economy?

West Virginia’s historic rehabilitation tax credit was put in place to encourage developers and property owners to take some of the state’s crumbling, historic structures and get them back into working order. The credit is also supposed to encourage the creation of local jobs while repurposing the underutilized buildings.

But the state’s tax credit is 10 percent, and a coalition of architects, economic developers, and others say that’s not enough to encourage the community development they’d like to see. That same group is now traveling the state looking for support as they prepare to ask state lawmakers to increase the tax credit.

Here at the old Shenandoah Hotel, which first opened in downtown Martinsburg in 1926, a group of community members – interested residents, city and county officials, and some state lawmakers from the area have gathered to hear about the potential benefits of increasing West Virginia’s historic rehabilitation tax credit.

The credit provides a 10 percent dollar-for-dollar reduction in income tax liability for renovation projects on buildings registered with the National Register of Historic Places. The owner is then responsible for the rest of the project costs.

That’s Lisa Dall’Olio. She’s an architect with Grove & Dall’Olio Architects based out of Gerrardstown in Berkeley County and she spoke at the Abandoned Properties Coalition sponsored forum.

Dall’Olio says an increase to the credit could mean an increase in the number of tourists who visit the state, looking for charm inherent in old buildings. But it could also mean an increase in state and local tax revenues.

“This is a perfect example of how tax credits, an increased tax credits could make somebody jump and do this project,” she said.

Dall’Olio and the Abandoned Properties Coalition would like to see state lawmakers bump the credit from 10 to 25 percent during the upcoming session to match neighboring states.

Nicole Marrocco is the Abandoned Properties Coalition coordinator for the West Virginia Community Development Hub.

“We’re in the Eastern Panhandle; we’re wedged between Maryland and Virginia, which are two states that have a higher tax credit, so we have the 20 percent tax credit in Maryland, the 25 percent tax credit in Virginia, and both states are seeing more development than we are here in the Eastern Panhandle,” Marrocco explained.

The National Trust for Historic Preservation tracked state tax dollars brought in by a similar federal tax credit between 2002 and 2015. Tax revenues in Virginia, where the state tax credit is 25 percent, were significantly higher during that time than in West Virginia—some $103 million compared to West Virginia’s $5 million. While those numbers are based on the study of a federal credit’s impact, Marrocco believes the state tax credit played a part in those revenues too. And West Virginia could see more money flowing into its coffers if lawmakers increased the rate.

Berkeley County Delegate Saira Blair attended the forum and says she sees it’s potential.

“It’s gonna be something that’s put on the table, I can guarantee that,” Blair said, “I don’t know if it’ll go through this year, because we’re looking at thousands of other things; our Finance committee is gonna be swamped, but one more thing to put out there is great for our state.”

Newly elected Senator Patricia Rucker, a Republican from Jefferson County, says she’s excited about the prospect of what increasing the historic tax credit could do for the state.

“We have historic areas all over the state, and actually, there are parts of our state which are so beautiful, people don’t even know,” she noted, “It’d be wonderful to increase our tourism dollars by letting this revitalization help all the areas of the state.”

Rucker says she would back legislation increasing the tax credit if it came before the legislature.

Abandoned Properties Coalition Meetings:

Wheeling
Wednesday, January 25, 8:30 – 10:30 a.m.
The Stone Center
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Fairmont
Thursday, January 26, 1 – 3 p.m.
The Gatherings
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Huntington
Wednesday, February 1, 4 – 6 p.m.
The Keith-Albee Theatre
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Charleston
Thursday, February 2, 5 – 7 p.m.
The Art Store
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