Pennsylvania Land Banks Are Funded on the Way Out, Not While They Hold

Pennsylvania and Ohio both run land banks, both aimed at the same problem, and they pay for them in opposite directions. Ohio takes a share of delinquent taxes as they are collected, which is money available while the inventory sits. Pennsylvania dedicates a share of future taxes on property the land bank has already sold. For anyone pricing maintenance work on land bank inventory, that difference decides which year the budget exists in.

Who Gets to Have One

68 Pa.C.S. § 2103 defines a "land bank jurisdiction" as a county, a city, a borough, a township or an incorporated town "with a population of more than 10,000" - or two or more municipalities with populations under 10,000 that enter into an intergovernmental cooperation agreement to establish and maintain a land bank. Smaller boroughs can have one, but only together.

Creation is by ordinance under § 2104(a), and the ordinance has to specify the land bank's name, the number of board members, the initial members and their terms, the qualifications and manner of selection, "the manner by which residents will be provided an opportunity to have input into the land bank decision-making process," and policies on former owner-occupants. The governing body files the ordinance with the department and with the Department of State, and the Secretary of the Commonwealth issues a certificate of incorporation.

Two structural rules keep land banks from overlapping. Section 2104(d): where a county establishes a land bank, it may acquire real property "only in those portions of the county located outside of the geographical boundaries of any other land bank established by another land bank jurisdiction located partially or entirely within the county." And § 2104(e) lets a school district participate by intergovernmental cooperation agreement specifying its board membership, if any, and which land bank actions are subject to its approval.

The Funding Arrives After the Sale

Section 2111 sets out three sources. Subsection (a): grants and loans from the Federal Government, the Commonwealth, a municipality, the creating land bank jurisdiction and private sources. Subsection (b): the land bank may receive and retain "payments for services rendered, for rents and leasehold payments received, for consideration for disposition of real and personal property, for proceeds of insurance coverage for losses incurred, for income from investments" and from any other lawful asset or activity.

Subsection (c) is the distinctive one. A taxing jurisdiction "may authorize the remittance or dedication of a portion of real property taxes collected pursuant to the laws of this Commonwealth to a land bank on real property conveyed by a land bank." The allocation "shall commence with the first taxable year following the date of conveyance and continue for a period of up to five years and may not exceed a maximum of 50% of the aggregate property tax revenues generated by the property." Remittance of school district taxes is included "only if the school district enters into an agreement with the land bank."

Read the trigger carefully: property conveyed by the land bank. The revenue stream is generated by a parcel that has left the inventory and gone back on the tax roll, and it begins the taxable year after the conveyance. It is a reward for disposition, not a budget for custody.

The practical consequence is that a Pennsylvania land bank funds its holding costs from the other two subsections - grants, loans, rents, sale proceeds, and payments for services it renders to others. Which makes the service-fee powers more than a technicality.

What It Can Actually Do With a Building

Section 2107 declares a land bank "a public body, corporate and politic, exercising public powers of the Commonwealth" and lists its powers. Four matter on site.

• § 2107(13) - to "design, develop, construct, demolish, reconstruct, rehabilitate, renovate, relocate and otherwise improve real property or rights or interests in real property"
• § 2107(12) - to enter into contracts "for the management of, the collection of rent from or the sale of real property of the land bank"
• § 2107(10) - to procure insurance against losses in connection with the real property, assets or activities of the land bank
• § 2107(14) - to fix, charge and collect rents, fees and charges for the use of its real property "and for services provided by the land bank"

Notice what is not there. Ohio names cutting grass and weeds and boarding up vacant structures in its statute; Pennsylvania does not. The Pennsylvania powers are framed at the level of development and management, and routine maintenance sits inside § 2107(12)'s management contracts and § 2107(18)'s catch-all - "to do all other things necessary or convenient to achieve the objectives and purposes of the land bank."

The municipal relationship runs both ways. Section 2107(8) authorises contracts and intergovernmental cooperation agreements with municipalities "for the performance of functions by municipalities on behalf of the land bank or by the land bank on behalf of municipalities," and § 2107(16) allows partnerships, joint ventures and other collaborative relationships with municipalities and other public and private entities "for the ownership, management, development and disposition of real property." Act 125 of 2022 added § 2107(16.1), extending that to collaborations with private developers "for the conversion of vacant, abandoned, tax-delinquent or otherwise blighted property into housing facilities for homeless individuals."

The Inventory May Have People In It

Section 2104(a)(6) is short and it changes the field assumption. The creating ordinance must specify "policies regarding former owner-occupants who are occupying homes acquired by the land bank," and then: "These policies shall show a preference for keeping the former owner-occupants in their homes, whenever feasible."

So a Pennsylvania land bank's inventory is not uniformly vacant. Some of it is occupied by the people who lost title to it, deliberately, under a policy the statute required the municipality to write. Anyone sent to secure, inspect or clear a land bank parcel in Pennsylvania should establish occupancy before mobilising rather than after - the legislative findings in § 2102 are about vacant and abandoned property, but § 2104(a)(6) is about the houses that still have someone in them.

What This Means If You Do the Work

• Expect the budget conversation to be about grants, rents and service fees rather than a standing tax allocation - § 2111(c) money arrives only after a parcel is sold and only for up to five years
• A land bank jurisdiction needs a population over 10,000, or two smaller municipalities acting together, so coverage is uneven across the Commonwealth
• County land banks cannot acquire inside the boundaries of a municipal land bank in the same county, so in some counties there are two counterparties, not one
• The statute does not name mowing or board-ups; the authority for routine work sits in the § 2107(12) management-contract power and the § 2107(18) catch-all
• Section 2107(8) lets the land bank act for a municipality and a municipality act for the land bank, so the contracting party on a given parcel may not be the obvious one
• Verify occupancy first: § 2104(a)(6) requires a policy preferring that former owner-occupants stay in their homes where feasible
• Section 2107(14) lets the land bank charge for services it provides, which is one of the few holding-period revenue sources in the chapter

For the state that funds the holding period instead, see Ohio, where the statute names grass cutting and board-ups and pays for them out of delinquent tax collections. Pennsylvania's other regimes over a building someone else owns are covered separately: the Act 135 conservatorship, a chapter 7 trustee and the absence of a state homestead exemption, two tax sale statutes with opposite answers on redemption, and a Pennsylvania guardian of the estate. On the municipal side see Philadelphia's vacant property licence and Pittsburgh's vacant building ordinance. Field capability is on our Pennsylvania page.