The purpose of a land bank is to save surplus real estate to be available for future affordable housing developments. Since the cost of land in Nashville is what makes affordability difficult, land banking is an important tool for affordable housing.
Affordable housing advocates in Nashville have been asking the city to form a land bank for some time. And most recently, Mayor Barry’s Transit & Affordability Taskforce recommended in its final report that Metro should “Use community land banks…to obtain and hold property for affordable housing needs.”
Unfortunately, the proposed Metro budget seems to be going in the opposite direction. Instead of saving surplus land for future development, the budget presented to the Council would sell $23 million of prime surplus property. This May 7 letter to the Council has all of the details that are currently available.
The three properties to be sold are Murrell School in Edgehill, the Green Hills Fire Station, and 3800 Charlotte. As you can tell from the projected $23 million sales price, this is desirable real estate in desirable locations. Instead of saving this land for future Metro needs or for future affordable housing developments, Metro is proposing to have a one-time sale to prop up its operating budget for the next fiscal year.
It is terrible policy to be selling surplus real estate to make ends meet for an annual operating budget. Just terrible.
Beyond this generally bad policy, there is some dark irony in the proposed budget for affordable housing advocates. According to page 22 of the Budget Presentation, the $10 million for the Barnes Fund this year will come from the one-time property sales proceeds!!! This means that the very surplus property in desirable locations that would be perfect to be banked for future use is being sold off to fund the Barnes Fund this year. So, no land banking and the Barnes Fund funding is contingent on one-time, non-recurring real estate sale proceeds. There’s no way to consider this as anything but a step backwards in Nashville’s commitment to affordable housing.
NOTE: Some will read this post along and conclude that I am an irresponsible tax and spend guy. Not so. As I have said in another post, in addition to properly funding the revenue side of its budget:
“I am confident that the Metro Council is going to reassess how economic incentives are judged and awarded. Most citizens believe that downtown has enough momentum to be self-sustaining and they would like to see more tax dollars spent in communities outside of downtown. Unfortunately, any reassessment and realignment like this won’t happen overnight or in a single year.
“In the short-term then, we must look at revenue and expenses and how to make ends meet while also honoring obligations to schools and employees.
“On the expense side, I expect that the Council will be proposing many cuts to many items in the upcoming budget. We are too early in the process for me to have an idea of what those cuts will be. However, I am certain that there is not enough fat in the budget to cut that would allow Metro to honor its school and employee obligations. We have to look at the revenue also. This has been true historically, and it is true now.”