Partially developed and potentially developable vacant properties sit idle, as demand in the residential and commercial land markets has waned.

“Available” and “Build to Suit” signs appear in open fields and on vacant city lots. New subdivisions, perhaps already approved by local government for dozens of new-home lots, are stalled because of the owner’s reluctance to invest further, or the developer’s failure to acquire or satisfy his construction financing.

With no visible solid evidence of a rebound in the real estate economy, what shall the owners of the vacant lands do with them? Owners continue to incur the expenses of taxes, maintenance and insurance, if not also debt service or lease payments.

It is time to spread the word about making some productive use of these stilted properties, particularly to the growing number of new and distant owners – banks, insurance companies and syndications that have purchased the properties at foreclosure sales and asset liquidations. Institutions located elsewhere may not be able to visualize ways in which the land might be used to mitigate holding costs. And they may not realize how not using the land may cause unnecessary losses.

In addition to generating revenue, there is a significant long-term economic benefit from introducing activity to the property. Active use of the land makes the property less of an eyesore, potentially avoiding the tarnished reputation of “unwanted” property, a stigma that can seriously impair future marketability.

There are many uses that could be legally permissible for vacant or partially developed lands:

  • If the old family farm platted for a subdivision hasn’t been built out, the original farmhouse or pasture perhaps can be rented. Leasing out the property not only brings a modest income stream, but may decrease liability insurance costs and may decrease the risks of squatters, theft and vandalism. The owner gains a security guard who pays to be there!
        Commercial sites may be leased for storage, RV or heavy-equipment parking areas, or other uses that bring a similarly beneficial human presence to the location.
  • If bare land grows grass, the grass can be harvested for hay. Even if not of feed quality, it can be sold or stored for erosion control on public or private properties.
         Not all land would yield enough to generate the modest $150 per acre in annual lease payments sometimes paid to the landowner for the privilege of hay farming, but you might get the grass cut and hauled for free, which then keeps you in compliance with fire ordinances at no cost to yourself (for example, see International Fire Code § 109.5).
         Forested lands could be selectively logged, or perhaps leased for woodcutting purposes.
  • Urban properties should be cleared of blight for the same reasons – enhanced insurability, reduced risks, and a reduced potential for negative stigma.
  • Most any building materials have salvage value. In fact, the market for reclaimed materials is growing, as recycling on a commercial level gains in popularity and as the use of recycled materials in “green” building is seen as a positive exercise in “sustainability.”
  • Some sites may be appropriate for temporary use as parks which, by agreement with the local government, might entitle the owner to a reprieve from taxes and could have other advantages as well.
         Allowing free use of land by the public for recreational purposes absolves the owner of liability for natural hazards in the state of Washington (RCW 4.24.210). That can reduce risks and, in some cases, eliminate or reduce insurance costs. The landowner immunity for allowing free or limited-cost use of one’s property is even broader in Oregon (ORS 105.682-688).
  • There are numerous permissible other uses for idle lands: community gardens, festival and open-tent market sites, pasture lands, parking. The possibilities are endless. Owners simply need to get the permits.

This can help a bit while the real estate market is stagnant. And the real payoff may be the avoidance of an “unwanted land” stigma, thereby enhancing future marketability of the property.

(David Meyer is a real estate attorney with Bullivant Houser Bailey PC. He can be reached at 360-693-2424 or at david.meyer@bullivant.com.)

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