Urban Land Creation

By Cassandra McGarvey, Founder of McGarvey PLLC on July 29, 2021

Texas Senate Bill 1679 repeals the Urban Land Bank Program Act for a Municipality with a Population of 1.9 million or more, now authorizing municipalities with populations over 2 million to create a land bank. This allows municipalities meeting the population requirements to acquire, manage, and dispose of vacant properties not producing tax revenue, effectively enabling them to convert the properties to productive uses. Pertaining directly to Houston and the Houston Land Bank, which was not outlined in state law and did not have the authority to reintegrate abandoned or vacant lots that were tax-delinquent, the new bill establishes:

Authority to Act

Senate Bill 1679 gives land banks the ability to carry out their purposes including the authority to convey, sell, transfer, lease, or otherwise dispose of any interest in, on, or to its real property. Land banks do not have the power of eminent domain or the ability to acquire property that is outside the municipality.

Board of Directors

An appointed board of directors will establish rules for meeting attendance and participation, as well as for audit purposes. General board actions will require approval by most of the board in regard to adopting rules, hiring or firing employees, incurring debt, and adoption or amendment of the annual budget.

Financing

The bill provides for general financing of land bank operations through grants, loans, payments for services, rent, and investment, etc. and establishes that no more than 75% of property taxes collected by the municipality on property conveyed by the land bank may be remitted to the land bank.

Interim Committee

The lieutenant governor, House speaker, and governor will appoint members for the interim committee charged with studying land bank powers, funding, legislation, and impacts on housing, flood and storm water management, and the tax base. Members of the committee will submit study reports and recommend legislation governing land banks and the committee will be abolished on September 21, 2023.

Senate Bill 1679 goes into effect September 1, 2021. Cassie McGarvey is double Board Certified in commercial and residential real estate law in the state of Texas. Contact Cassie with your Texas real estate questions today at cmcgarvey@mcgarveypllc.com.

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