Tax Sale Case Studies

New York City has a comprehensive website with information about the Lien Sale Process. In addition to a downloadable brochure, customer assistance, payment installation options, and evening and community outreach sessions, the site also has information on avoiding predatory lenders.

In Indianapolis, at the County Tax Sale, property is categorized into three lists: "A" - properties new to the record; "B" - properties unsold at the previous year's tax sale, and "C" - properties identified for the specific purpose of redevelopment. If a property is not sold after appearing on both the "A" and "B" lists, the County acquires liens on the property by default. Following one final sale attempt, properties may be transferred to a CDC for a small administrative fee. The City then submits a list of tax-delinquent properties to the County Auditor and requests that they be placed on the "C" list for expeditious transfer to the City.  More details can be found in this LISC case study.

Thousand Oaks, California provides financial assistant to first-time homebuyers in purchasing properties acquired through tax sale.

Oklahoma City transfers tax-foreclosed properties in the hands of non-profit developers, such as Habitat for Humanity and transfers vacant, tax-foreclosed lots to neighborhood civic associations for urban gardens.

Cleveland places all parcels that are not sold after two auctions into their city land bank. Through the involvement of a Neighborhood Advisory Committee, land bank properties are offered to individuals who bid fair market value and present a plan most attuned to neighborhood goals. Properties are not necessarily offered to the highest bidder, thereby discouraging land speculation. Final approval is granted by the City Council.

Property entering the land bank is title free and clear of all other private leans and interests, and subject only to covenants and easements created before the tax delinquency arose.  CDCs must submit a proposal for reuse to be evaluated by land bank staff, a neighborhood planner, and a neighborhood advisory council who must recommend council sign-off. Property remains in the land bank - tax exempt - until a development proposal is submitted and approved. The City maintains a public record of all parcels found in the land bank, typically 5,000-6,000 properties at a time. Each year, 200-300 properties are gifted to the land bank by property owners in lieu of foreclosure. Nearly 90% of all CDC properties are acquired from the land bank. On average, 500 land bank properties are sold to CDCs on an annual basis.

The Atlanta Land Bank Authority (LBA) is able to waive delinquent taxes on properties that CDCs purchase on the open market and on properties the LBA acquires from the government through a variety of means. The LBA also expedites the process of clearing title on acquired properties and serves as an intermediary between government and community-based redevelopment efforts.

The LBA is authorized by state legislation to use three primary mechanisms to acquire property. One is acquisition directly from tax delinquent property owners either by purchase or by accepting a donation of either property or a tax deed. Another is to acquire the deeds to tax delinquent properties held by city or county agencies. The LBA can also acquire parcels where a “failed sale” has occurred and can request that the Tax Commissioner convey tax deed parcels to it. The LBA also acts as an intermediary by providing technical assistance to developers. More details can be found in this LISC case study.