County land banks ideally suited to help spend ARPA stimulus cash

Jeffry D. Harris and Caitlin A. Langfitt
Bricker & Eckler LLP.

Government finance types have been in a mad scramble since March 2021 to answer the how, where and on what riddles to spending their American Rescue Plan Act (ARPA) funds. As is well-known, the federal government’s response to the COVID-19 public health emergency has pushed billions of dollars into state and local governments’ coffers. Thus leading to heady conversations – often with lawyers in tow – as to what are eligible expenses and what aren’t. Questions run the gamut: “Can we buy a fire truck?” (Yes, in part.) “Can we repave all our roads?” (No.) “Can we improve our park district’s little league ballfields?” (Yes, with conditions.)

County land banks have a clear role to play in helping administer ARPA funding plans, both generally and in the context of affordable housing development. Congress took care to specify under ARPA that state and local governments could transfer stimulus funds only to certain types of entities to implement spending plans: (i) private nonprofit organizations, (ii) public benefit corporations involved in the transportation of passengers or cargo, or (iii) special-purpose units of state or local government. (See ARPA, Title IX, Sec. 602(c)(3) and Sec. 603(c)(3)).

Formed under Ohio’s nonprofit corporation law (R.C. Chapter 1702) and deemed “electing subdivisions” (R.C. Chapter 5722), county land banks are special-purpose units of government and therefore serve as ideal partners to receive and administer ARPA funds for partner local governments. This role can be played in spending plans directed at any of the myriad uses of ARPA funds.

The utility of county land banks under ARPA becomes even clearer in the context of affordable housing development. Under ARPA and its related guidance, there is a nugget for county land banks hidden in plain sight under the first bucket of eligible use: “(a) To respond to the public health emergency or its negative economic impacts, including assistance to households, small businesses, and nonprofits, or aid to impacted industries such as tourism, travel, and hospitality” (U.S. Treasury, Coronavirus State and Local Fiscal Recovery Funds, FAQs as of November 15, 2021, Item 4.6).

A careful reading indicates the development of affordable housing (to address disproportionate economic outcomes in communities) is a clear eligible use of ARPA funds, as a response to housing insecurity. County land banks – with their unique powers under Ohio law – make for excellent partners to receive and administer ARPA funds with an eye to increasing the supply of affordable and high-quality living units in areas with limited economic opportunity and inadequate or poor-quality housing. (See U.S. Treasury, Interim Final Rule, Supplementary Information, Part II, at pages 38-39) Interestingly, private, for-profit developers are not appropriate transferees under ARPA.

County land banks may already be involved in affordable housing development, with such efforts supported by local funding sources. Significant federal stimulus funds also may be used. Affordable housing plans can be implemented – and are even presumed eligible under ARPA by the U.S. Treasury in certain neighborhoods or areas – with county land banks as valuable partners.