CHAPTER 379C. URBAN LAND BANK DEMONSTRATION PROGRAM
LOCAL GOVERNMENT CODE
TITLE 12. PLANNING AND DEVELOPMENT
SUBTITLE A. MUNICIPAL PLANNING AND DEVELOPMENT
CHAPTER 379C. URBAN LAND BANK DEMONSTRATION PROGRAM
Sec. 379C.001. SHORT TITLE. This chapter may be cited as the
Urban Land Bank Demonstration Program Act.
Added by Acts 2003, 78th Leg., ch. 299, Sec. 1, eff. Sept. 1,
2003.
Sec. 379C.002. APPLICABILITY. This chapter applies only to
home-rule municipalities that:
(1) have a population of 1.18 million or more; and
(2) are located predominantly in a county that has a total area
of less than 1,000 square miles.
Added by Acts 2003, 78th Leg., ch. 299, Sec. 1, eff. Sept. 1,
2003.
Sec. 379C.003. DEFINITIONS. In this chapter:
(1) "Community housing development organization" or
"organization" means an organization that:
(A) meets the definition of a community housing development
organization in 24 C.F.R. Section 92.2; and
(B) is certified by the municipality as a community housing
development organization.
(2) "Land bank" means an entity established or approved by the
governing body of a municipality for the purpose of acquiring,
holding, and transferring unimproved real property under this
chapter.
(3) "Low income household" means a household with a gross income
of not greater than 115 percent of the area median family income,
adjusted for household size, for the metropolitan statistical
area in which the municipality is located, as determined annually
by the United States Department of Housing and Urban Development.
(4) "Qualified participating developer" means a developer who
meets the requirements of Section 379C.005 and includes a
qualified organization under Section 379C.011.
(5) "Urban land bank demonstration plan" or "plan" means a plan
adopted by the governing body of a municipality as provided by
Section 379C.006.
(6) "Urban land bank demonstration program" or "program" means a
program adopted under Section 379C.004.
Added by Acts 2003, 78th Leg., ch. 299, Sec. 1, eff. Sept. 1,
2003.
Amended by:
Acts 2007, 80th Leg., R.S., Ch.
1034, Sec. 5, eff. September 1, 2007.
Sec. 379C.004. URBAN LAND BANK DEMONSTRATION PROGRAM. (a) The
governing body of a municipality may adopt an urban land bank
demonstration program in which the officer charged with selling
real property ordered sold pursuant to foreclosure of a tax lien
may sell certain eligible real property by private sale for
purposes of affordable housing development as provided by this
chapter.
(b) The governing body of a municipality that adopts an urban
land bank demonstration program shall establish or approve a land
bank for the purpose of acquiring, holding, and transferring
unimproved real property under this chapter.
Added by Acts 2003, 78th Leg., ch. 299, Sec. 1, eff. Sept. 1,
2003.
Sec. 379C.005. QUALIFIED PARTICIPATING DEVELOPER. To qualify to
participate in an urban land bank demonstration program, a
developer must:
(1) have built three or more housing units within the three-year
period preceding the submission of a proposal to the land bank
seeking to acquire real property from the land bank;
(2) have a development plan approved by the municipality for the
land bank property; and
(3) meet any other requirements adopted by the municipality in
the urban land bank demonstration plan.
Added by Acts 2003, 78th Leg., ch. 299, Sec. 1, eff. Sept. 1,
2003.
Sec. 379C.006. URBAN LAND BANK DEMONSTRATION PLAN. (a) A
municipality that adopts an urban land bank demonstration program
shall operate the program in conformance with an urban land bank
demonstration plan.
(b) The governing body of a municipality that adopts an urban
land bank demonstration program shall adopt a plan annually. The
plan may be amended from time to time.
(c) In developing the plan, the municipality shall consider
other housing plans adopted by the municipality, including the
comprehensive plan submitted to the United States Department of
Housing and Urban Development and all fair housing plans and
policies adopted or agreed to by the municipality.
(d) The plan must include the following:
(1) a list of community housing development organizations
eligible to participate in the right of first refusal provided by
Section 379C.011;
(2) a list of the parcels of real property that may become
eligible for sale to the land bank during the upcoming year;
(3) the municipality's plan for affordable housing development
on those parcels of real property; and
(4) the sources and amounts of funding anticipated to be
available from the municipality for subsidies for development of
affordable housing in the municipality, including any money
specifically available for housing developed under the program,
as approved by the governing body of the municipality at the time
the plan is adopted.
Added by Acts 2003, 78th Leg., ch. 299, Sec. 1, eff. Sept. 1,
2003.
Sec. 379C.007. PUBLIC HEARING ON PROPOSED PLAN. (a) Before
adopting a plan, a municipality shall hold a public hearing on
the proposed plan.
(b) The city manager or the city manager's designee shall
provide notice of the hearing to all community housing
development organizations and to neighborhood associations
identified by the municipality as serving the neighborhoods in
which properties anticipated to be available for sale to the land
bank under this chapter are located.
(c) The city manager or the city manager's designee shall make
copies of the proposed plan available to the public not later
than the 60th day before the date of the public hearing.
Added by Acts 2003, 78th Leg., ch. 299, Sec. 1, eff. Sept. 1,
2003.
Sec. 379C.008. PRIVATE SALE TO LAND BANK. (a) Notwithstanding
any other law and except as provided by Subsection (f), property
that is ordered sold pursuant to foreclosure of a tax lien may be
sold in a private sale to a land bank by the officer charged with
the sale of the property without first offering the property for
sale as otherwise provided by Section 34.01, Tax Code, if:
(1) the market value of the property as specified in the
judgment of foreclosure is less than the total amount due under
the judgment, including all taxes, penalties, and interest, plus
the value of nontax liens held by a taxing unit and awarded by
the judgment, court costs, and the cost of the sale;
(2) the property is not improved with a habitable building or
buildings or an uninhabitable building or buildings that are
occupied as a residence by an owner or tenant who is legally
entitled to occupy the building or buildings;
(3) there are delinquent taxes on the property for a total of at
least five years; and
(4) the municipality has executed with the other taxing units
that are parties to the tax suit an interlocal agreement that
enables those units to agree to participate in the program while
retaining the right to withhold consent to the sale of specific
properties to the land bank.
(a-1) The property may be sold to a land bank, regardless of
current zoning, and on development may be zoned for more than one
use that must include residential housing in accordance with this
chapter, provided that the requirements of Subsection (a) are
satisfied.
(b) A sale of property for use in connection with the program is
a sale for a public purpose.
(c) If the person being sued in a suit for foreclosure of a tax
lien does not contest the market value of the property in the
suit, the person waives the right to challenge the amount of the
market value determined by the court for purposes of the sale of
the property under Section 33.50, Tax Code.
(d) For any sale of property under this chapter, each person who
was a defendant to the judgment, or that person's attorney, shall
be given, not later than the 90th day before the date of sale,
written notice of the proposed method of sale of the property by
the officer charged with the sale of the property. Notice shall
be given in the manner prescribed by Rule 21a, Texas Rules of
Civil Procedure.
(e) After receipt of the notice required by Subsection (d) and
before the date of the proposed sale, the owner of the property
subject to sale may file with the officer charged with the sale a
written request that the property not be sold in the manner
provided by this chapter.
(f) If the officer charged with the sale receives a written
request as provided by Subsection (e), the officer shall sell the
property as otherwise provided in Section 34.01, Tax Code.
(g) The owner of the property subject to sale may not receive
any proceeds of a sale under this chapter. However, the owner
does not have any personal liability for a deficiency of the
judgment as a result of a sale under this chapter.
(h) Notwithstanding any other law, if consent is given by the
taxing units that are a party to the judgment, property may be
sold to the land bank for less than the market value of the
property as specified in the judgment or less than the total of
all taxes, penalties, and interest, plus the value of nontax
liens held by a taxing unit and awarded by the judgment, court
costs, and the cost of the sale.
(i) The deed of conveyance of the property sold to a land bank
under this section conveys to the land bank the right, title, and
interest acquired or held by each taxing unit that was a party to
the judgment, subject to the right of redemption.
Added by Acts 2003, 78th Leg., ch. 299, Sec. 1, eff. Sept. 1,
2003.
Amended by:
Acts 2007, 80th Leg., R.S., Ch.
1034, Sec. 6, eff. September 1, 2007.
Acts 2009, 81st Leg., R.S., Ch.
1297, Sec. 1, eff. June 19, 2009.
Sec. 379C.009. SUBSEQUENT RESALE BY LAND BANK. (a) Except as
provided by Subsection (a-1), each subsequent resale of property
acquired by a land bank under this chapter must comply with the
conditions of this section.
(a-1) Notwithstanding any other law, this section does not apply
to property sold to an eligible adjacent property owner under
Section 379C.0106.
(b) The land bank must sell a property to a qualified
participating developer within the four-year period following the
date of acquisition for the purpose of construction of affordable
housing for sale or rent to low income households. If after four
years a qualified participating developer has not purchased the
property, the property shall be transferred from the land bank to
the taxing units who were parties to the judgment for disposition
as otherwise allowed under the law.
(c) Unless the municipality increases the amount in its plan,
the number of properties acquired by a qualified participating
developer under this section on which development has not been
completed may not at any given time exceed three times the annual
average residential production completed by the qualified
participating developer during the preceding two-year period as
determined by the municipality.
(d) The deed conveying a property sold by the land bank must
include a right of reverter so that if the qualified
participating developer does not apply for a construction permit
and close on any construction financing within the three-year
period following the date of the conveyance of the property from
the land bank to the qualified participating developer, the
property will revert to the land bank for subsequent resale in
accordance with this chapter or conveyance to the taxing units
who were parties to the judgment for disposition as otherwise
allowed under the law. If the property is replatted under
Section 379C.0107, the right of reverter applies to the entire
property as replatted.
Added by Acts 2003, 78th Leg., ch. 299, Sec. 1, eff. Sept. 1,
2003.
Amended by:
Acts 2009, 81st Leg., R.S., Ch.
1297, Sec. 2, eff. June 19, 2009.
Sec. 379C.010. RESTRICTIONS ON OCCUPANCY AND USE OF PROPERTY.
(a) The land bank shall impose deed restrictions on property
sold to qualified participating developers requiring the
development and sale, rental, or lease-purchase of the property
to low income households.
(b) Each land bank property sold during any given fiscal year to
be developed for sale must be deed restricted for sale to low
income households, and:
(1) at least 25 percent of those land bank properties must be
deed restricted for sale to households with gross household
incomes not greater than 60 percent of the area median family
income, adjusted for household size; and
(2) not more than 30 percent of those land bank properties may
be deed restricted for sale to households with gross household
incomes greater than 80 percent of the area median family income,
adjusted for household size.
(c) If property is developed for rental housing, the deed
restrictions must be for a period of not less than 15 years and
must require that:
(1) 100 percent of the rental units be occupied by households
with incomes not greater than 60 percent of area median family
income, based on gross household income, adjusted for household
size, for the metropolitan statistical area in which the
municipality is located, as determined annually by the United
States Department of Housing and Urban Development;
(2) 40 percent of the units be occupied by households with
incomes not greater than 50 percent of area median family income,
based on gross household income, adjusted for household size, for
the metropolitan statistical area in which the municipality is
located, as determined annually by the United States Department
of Housing and Urban Development; or
(3) 20 percent of the units be occupied by households with
incomes not greater than 30 percent of area median family income,
based on gross household income, adjusted for household size, for
the metropolitan statistical area in which the municipality is
located, as determined annually by the United States Department
of Housing and Urban Development.
(d) The deed restrictions under Subsection (c) must require the
owner to file an annual occupancy report with the municipality on
a reporting form provided by the municipality. The deed
restrictions must also prohibit any exclusion of an individual or
family from admission to the development based solely on the
participation of the individual or family in the housing choice
voucher program under Section 8, United States Housing Act of
1937 (42 U.S.C. Section 1437f), as amended.
(e) Except as otherwise provided by this section, if the deed
restrictions imposed under this section are for a term of years,
the deed restrictions shall renew automatically.
(f) The land bank or the governing body of the municipality may
modify or add to the deed restrictions imposed under this
section. Any modifications or additions made by the governing
body of the municipality must be adopted by the municipality as
part of its plan and must comply with the restrictions set forth
in Subsections (b), (c), and (d).
Added by Acts 2003, 78th Leg., ch. 299, Sec. 1, eff. Sept. 1,
2003.
Amended by:
Acts 2007, 80th Leg., R.S., Ch.
1034, Sec. 7, eff. September 1, 2007.
Acts 2009, 81st Leg., R.S., Ch.
1297, Sec. 3, eff. June 19, 2009.
Sec. 379C.0105. LOT EXCHANGE PERMITTED. (a) Notwithstanding
Section 379C.010, the land bank may permit a qualified
participating developer to exchange a property purchased from the
land bank with any other property owned by the developer if:
(1) the developer agrees to construct on the other property
affordable housing for low income households as provided by this
chapter; and
(2) the other property will be located in:
(A) a planned development incorporating the property originally
purchased from the land bank; or
(B) another location as approved by the land bank.
(b) The land bank shall adjust the deed restrictions under
Section 379C.010 for each of the properties exchanged by the
developer under this section.
Added by Acts 2009, 81st Leg., R.S., Ch.
1297, Sec. 4, eff. June 19, 2009.
Sec. 379C.0106. PROPERTY DETERMINED TO BE INAPPROPRIATE FOR
RESIDENTIAL DEVELOPMENT: RIGHT OF FIRST REFUSAL. (a) In this
section, "eligible adjacent property owner" means a person who:
(1) owns property located adjacent to property owned by the land
bank;
(2) has owned the adjacent property and continuously occupied
that property as a primary residence for the two-year period
preceding the date of the sale; and
(3) satisfies eligibility requirements adopted by the land bank.
(b) Notwithstanding any other right of first refusal granted
under this chapter, if the land bank determines that a property
owned by the land bank is not appropriate for residential
development, the land bank first shall offer the property for
sale to an eligible adjacent property owner according to terms
and conditions developed by the land bank that are consistent
with this chapter.
(c) The land bank shall sell the property to an eligible
adjacent property owner, at whichever value is lower:
(1) the fair market value for the property as determined by the
appraisal district in which the property is located; or
(2) the sales price recorded in the annual plan.
(d) Except as provided by Subsection (e), an adjacent property
owner that purchases property under this section may not lease,
sell, or transfer that property to another person before the
third anniversary of the date the adjacent property owner
purchased that property from the land bank.
(e) Subsection (d) does not apply to the transfer of property
purchased under this section if the transfer:
(1) is made according to a policy adopted by the land bank; and
(2) is made to a family member of the eligible adjacent property
owner or occurs as a result of the death of the eligible adjacent
property owner.
Added by Acts 2009, 81st Leg., R.S., Ch.
1297, Sec. 5, eff. June 19, 2009.
Sec. 379C.0107. REPLATTING BY QUALIFIED PARTICIPATING DEVELOPER.
The land bank may sell two adjacent properties that are owned by
the land bank to a qualified participating developer if:
(1) at least one of the properties is appropriate for
residential development; and
(2) the developer agrees to replat the two adjacent properties
as one property that is appropriate for residential development.
Added by Acts 2009, 81st Leg., R.S., Ch.
1297, Sec. 6, eff. June 19, 2009.
Sec. 379C.011. RIGHT OF FIRST REFUSAL TO QUALIFIED
ORGANIZATIONS. (a) In this section, "qualified organization"
means a community housing development organization that:
(1) contains within its designated geographical boundaries of
operation, as set forth in its application for certification
filed with and approved by the municipality, a portion of the
property that the land bank is offering for sale;
(2) has built at least three single-family homes or duplexes or
one multifamily residential dwelling of four or more units in
compliance with all applicable building codes within the
preceding two-year period and within the organization's
designated geographical boundaries of operation; and
(3) within the preceding two-year period has built or
rehabilitated housing units within a one-half mile radius of the
property that the land bank is offering for sale.
(b) Except as provided by Section 379C.0106, the land bank shall
first offer a property for sale to qualified organizations.
(c) Notice must be provided to the qualified organizations by
certified mail, return receipt requested.
(d) The municipality shall specify in its plan that the period
during which the right of first refusal provided by this section
may be exercised by a qualified organization is six months from
the date of the deed of conveyance of the property to the land
bank.
(e) During the specified period, the land bank may not sell the
property to a qualified participating developer other than a
qualified organization. If all qualified organizations notify the
land bank that they are declining to exercise their right of
first refusal during the specified period, or if an offer to
purchase the property is not received from a qualified
organization during that period, the land bank may sell the
property to any other qualified participating developer at the
same price that the land bank offered the property to the
qualified organizations.
(f) In its plan, the municipality shall establish the amount of
additional time, if any, that a property may be held in the land
bank once an offer has been received and accepted from a
qualified organization or other qualified participating
developer.
(g) If more than one qualified organization expresses an
interest in exercising its right of first refusal, the
organization that has designated the most geographically compact
area encompassing a portion of the property shall be given
priority.
(h) In its plan, the municipality may provide for other rights
of first refusal for any other nonprofit corporation exempted
from federal income tax under Section 501(c)(3), Internal Revenue
Code of 1986, as amended, provided that the preeminent right of
first refusal is provided to qualified organizations as provided
by this section.
(i) The land bank is not required to provide a right of first
refusal to qualified organizations under this section if the land
bank is selling property that reverted to the land bank under
Section 379C.009(d).
Added by Acts 2003, 78th Leg., ch. 299, Sec. 1, eff. Sept. 1,
2003.
Amended by:
Acts 2007, 80th Leg., R.S., Ch.
1034, Sec. 8, eff. September 1, 2007.
Acts 2009, 81st Leg., R.S., Ch.
1297, Sec. 7, eff. June 19, 2009.
Acts 2009, 81st Leg., R.S., Ch.
1297, Sec. 8, eff. June 19, 2009.
Sec. 379C.012. OPEN RECORDS AND MEETINGS. The land bank shall
comply with the requirements of Chapters 551 and 552, Government
Code.
Added by Acts 2003, 78th Leg., ch. 299, Sec. 1, eff. Sept. 1,
2003.
Sec. 379C.013. RECORDS; AUDIT; REPORT. (a) The land bank shall
keep accurate minutes of its meetings and shall keep accurate
records and books of account that conform with generally accepted
principles of accounting and that clearly reflect the income and
expenses of the land bank and all transactions in relation to its
property.
(b) The land bank shall file with the municipality not later
than the 90th day after the close of the fiscal year annual
audited financial statements prepared by a certified public
accountant. The financial transactions of the land bank are
subject to audit by the municipality.
(c) For purposes of evaluating the effectiveness of the program,
the land bank shall submit an annual performance report to the
municipality not later than November 1 of each year in which the
land bank acquires or sells property under this chapter. The
performance report must include:
(1) a complete and detailed written accounting of all money and
properties received and disbursed by the land bank during the
preceding fiscal year;
(2) for each property acquired by the land bank during the
preceding fiscal year:
(A) the street address of the property;
(B) the legal description of the property;
(C) the date the land bank took title to the property;
(D) the name and address of the property owner of record at the
time of the foreclosure;
(E) the amount of taxes and other costs owed at the time of the
foreclosure; and
(F) the assessed value of the property on the tax roll at the
time of the foreclosure;
(3) for each property sold by the land bank during the preceding
fiscal year to a qualified participating developer or eligible
adjacent property owner:
(A) the street address of the property;
(B) the legal description of the property;
(C) the name and mailing address of the purchaser;
(D) the purchase price paid; and
(E) if sold to a qualified participating developer:
(i) the maximum incomes allowed for the households by the terms
of the sale; and
(ii) the source and amount of any public subsidy provided by the
municipality to facilitate the sale or rental of the property to
a household within the targeted income levels;
(4) for each property sold by a qualified participating
developer during the preceding fiscal year, the buyer's household
income and a description of all use and sale restrictions; and
(5) for each property developed for rental housing with an
active deed restriction, a copy of the most recent annual report
filed by the owner with the land bank.
(d) The land bank shall maintain in its records for inspection a
copy of the sale settlement statement for each property sold by a
qualified participating developer and a copy of the first page of
the mortgage note with the interest rate and indicating the
volume and page number of the instrument as filed with the county
clerk.
(e) The land bank shall provide copies of the performance report
to the taxing units who were parties to the judgment of
foreclosure and shall provide notice of the availability of the
performance report for review to the organizations and
neighborhood associations identified by the municipality as
serving the neighborhoods in which properties sold to the land
bank under this chapter are located.
(f) The land bank and the municipality shall maintain copies of
the performance report available for public review.
Added by Acts 2003, 78th Leg., ch. 299, Sec. 1, eff. Sept. 1,
2003.
Amended by:
Acts 2009, 81st Leg., R.S., Ch.
1297, Sec. 9, eff. June 19, 2009.