Land Bank



A public authority that provides financing for land development, farm mortgages and develops tax foreclosed property.


  • To purchase land and hold for future development.
  • To re-purpose an inventory of underused, abandoned and foreclosed property.
  • To provide loans for agricultural or other rural use. Most loans from land banks are for commercial agriculture, but they also finance personal and recreational projects.
  • To issue banknotes on land held as security.
  • To Finance transactions in real estate.

Land Banks work as a legal and financial institution to put the property back to productive use as its main function. It provides fiscal benefit in the short term and is used for community development in the long term.

Are Land Banks different from Regular banks?

  • The primary function of a regular bank is to deposit money and provide credit to the society, whereas a land bank focuses on taking over abandoned parcels of land for future development.
  • A regular money bank earns interest by giving out loans/credit. Whereas, a land bank makes money from interest on taxes and sale of the property.
  • A regular bank uses its money on small/long term investments/loans which can be subject to market fluctuations whereas, a Land Bank parks its cash into a tangible, fixed asset that cannot be broken, stolen or destroyed.
  • A regular bank can be both public and private working mainly with the function of providing credit to facilitate transactions in society. Whereas, Land Banks are quasi-government organisations designed to acquire and maintain problem properties and then transfer them back to responsible ownership and productive use in accordance with local land use goals and priorities, creating a more efficient and effective system to eliminate blight.


John Jacob Astor realized the power of Land Banking when he purchased large tracts of land which are now known as “Manhattan”. He acquired this land at a time when nobody else realized the opportunity. At the time of his death, Astor’s estimated net worth would have been equivalent to $110.1 billion in 2006 U.S. dollars, making him the fourth richest person in American history.

Since this concept is still finding its roots in India. There are various states like Orissa, Jharkhand where local municipal corporation along with public representation has form local bodies to help improve certain sections of the society. 

Let’s understand this with the help of an example: The 2010 census estimated that the United State has nearly 400,000 vacant properties, about 20,000 of which are in Pittsburgh and 40,000 in Philadelphia. Studies have shown people who live near abandoned properties already know: that vacant units bring down property values in neighbourhoods. Research also suggests that blighted property can increase crime rates in neighbourhoods. They cost local governments millions in uncollected property taxes and maintenance costs.

The problem is that it’s time-consuming and difficult to identify a property, figure out who owns it, and deal with back taxes. It’s even harder if the property owners can’t be tracked down. Multiply that by thousands of properties and you can see why the process moves so slowly when it moves at all. A land bank, theoretically, speeds up that process, in effect making neighbourhood improvements easier and faster.

In order to accomplish these tasks, land banks are granted special powers and legal authority pursuant to state-enabling statutes. These powers are as follows:


  • Obtain property at low or no cost through the tax foreclosure process
  • Hold land tax-free
  • Clear title and/or extinguish back taxes
  • Lease properties for temporary uses
  • Negotiate sales based not only on the highest bid but also on the outcome that most closely aligns with community needs, such as workforce housing, a grocery store, or expanded recreational space.


Landbank act as an economic and community development tool to revitalize abandoned neighbourhoods and business districts. Land banks can benefit urban schools, improve tax revenues, expand housing opportunities, remove public nuisances, assist in crime prevention and promote economic development.



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