Why Municipal Government-Managed Community Land Trusts and Land Banks Are Bad for Local Economies: A Case Study in Cherokee County

When Government is the cause of the problem, the solution is NOT more Government intervention, it's less.

Municipal government-managed Community Land trusts (CLTs) and Land Banks are often pitched as innovative solutions to housing affordability and urban blight. However, these programs, which rely heavily on local assets (local tax dollars, gov’t staff diverting time to manage, etc.) for funding and oversight, are inefficient and misguided attempts to address problems rooted in long term Federal Economic policies that have eroded the value of the dollar AND caused homes to increase in cost. By diverting local resources to bandage national issues, they harm local economies, distort markets, and fail to deliver sustainable growth. Cherokee County (Georgia) recently took steps to establish a land bank with its first city partner, Canton, and discussions around CLTs highlight why these initiatives are problematic for communities. This post explores why municipal-managed CLTs and land banks, like those in Cherokee County, are a poor choice for local economies.

Understanding Community Land Trusts and Land Banks

Community Land Trusts are normally, nonprofit entities—often governed by a mix of community members and public officials—that hold land in perpetuity to maintain affordable housing through long-term leases and resale restrictions. Land banks are public entities established by local governments to acquire and repurpose vacant, abandoned, or tax-delinquent properties for productive uses like housing or community spaces. While both aim to address housing and blight, they are typically funded and overseen by municipalities, drawing directly from local budgets.

In Cherokee County, the Board of Commissioners approved a resolution on February 18, 2025, to establish the Cherokee Regional Land Bank Authority, with Canton finalizing a contract for its creation on August 13, 2025. The land bank aims to redevelop blighted and tax-delinquent properties for new purposes, including potential housing, and involves collaboration with cities like Canton, Woodstock, and Holly Springs. A seven-member board will govern the land bank, with three appointees from the county, one each from Canton, Holly Springs, and Woodstock, and one from other municipalities like Ball Ground, Nelson, or Waleska. Similarly, discussions in Canton have raised the possibility of a CLT to address housing affordability. However, these initiatives, as evidenced by local debates and the Cherokee County land bank, come with significant drawbacks that outweigh their potential benefits.

The Funding Trap: Local Taxpayers Bear the Burden

The most glaring issue with municipal-managed CLTs and land banks is their reliance on local taxpayer funds. Cherokee County’s land bank will require public funding to acquire properties, cover operational costs, and manage redevelopment, with the county covering initial costs and member cities contributing in proportion to their appointees on the board. Land banks typically draw from general fund appropriations, borrow against future tax revenues, or use delinquency tax revolving funds (DTRFs). Similarly, CLTs depend on subsidies, often funneled through local governments via federal programs like Community Development Block Grants (CDBG) or HOME Investment Partnerships, supplemented by municipal budgets. These programs aren’t self-sustaining; they demand continuous public investment, pulling resources from critical services like infrastructure, schools, or public safety.

In Cherokee County, the land bank’s funding will come from county and city budgets, meaning residents in Canton, Woodstock, and other participating cities will foot the bill through property taxes or reallocated funds. There may also be funding option via the State or Federal Gov’t, but those are also tax payer dollars being used to combat a problem created by the Gov’t. For a county already investing in projects like widening Bells Ferry Road ($36.5 million) and supporting fire station expansions, adding a land bank strains already tight budgets. A letter to the editor in the Cherokee Tribune Ledger from former Rep. Scot Turner emphasized this concern, noting that Canton’s proposed CLT would divert resources from pressing infrastructure needs like traffic and road improvements, which are critical for economic vitality. Nationwide, CLTs can cost hundreds of thousands per unit to maintain affordability, a hefty price for local taxpayers. This misallocation of resources diverts money from initiatives that could directly stimulate economic growth, such as business incentives or infrastructure upgrades that attract private investment.

Federal Policies Are the Real Culprit

The need for tools like land banks and CLTs in places like Cherokee County stems from federal economic policies that have created a national housing crisis. For some historical context, the Federal Government has been backing mortgage loans for 91 years, since the establishment of the FHA in 1934. This backing includes direct guarantees (e.g., FHA and VA loans) and indirect support through other entities like Fannie Mae and Freddie Mac, which are now being discussed for a pseudo IPO. When the government backs the loan, it takes power from the open market to determine the best price for the consumers benefit, and causes values, in this case, to increase artificially over time. More recently, the Federal Reserve’s interest rate hikes have indirectly driven mortgage rates to historic highs, locking out new buyers and inflating rents as demand shifts. Many feel this is the proverbial “can being kicked” and is now hitting a brick wall. A national shortage of over 4.5 million homes, driven by underproduction, exacerbated by federal economic policies, and many other drivers distorts markets. Meanwhile, corporate landlords (BlackRock, etc.), enabled by weak federal antitrust enforcement, further drive up prices through algorithmic rent-setting.

Moreover, the Federal Reserve's policies of increasing the money supply, such as through quantitative easing and asset purchases, have led to monetary inflation and devaluation of the US Dollar, directly contributing to rising home prices and reduced affordability. As the overall money supply has expanded, house prices have shown a strong correlation, tending to rise due to increased liquidity fueling asset price inflation. Excessive federal budget deficits, which often result in more money creation, spark inflation in home prices, as seen post-COVID-19. Monetary expansion induces dollar depreciation, boosting investment in assets like housing and exacerbating bubbles. This devaluation means that while nominal home prices soar, real purchasing power for average Americans diminishes, making homes less affordable. Research indicates that expansionary monetary policy shocks can lead to immediate increases in housing values, further pricing out potential buyers.

Cherokee County’s land bank is a direct response to these pressures, aiming to address housing shortages and blight. Yet, they’re local solutions to a federal problem, forcing taxpayers in places like Canton (and others that agree to sign on) to subsidize fixes for issues originating in Washington. This mismatch is a recipe for economic inefficiency and another mistaken initiative to treat the symptom rather than the problem.

Why Cherokee County Should Avoid CLTs and Land Banks

Cherokee County’s land bank initiative highlight several reasons why these programs harm local economies:

Resource Drain: The land bank and potential CLTs will pull funds from Cherokee County’s budget, with the county covering initial operational costs and cities like Canton, Woodstock, and Holly Springs contributing based on their board representation. This competes with priorities like fire station staffing or road improvements, which directly benefit residents and businesses. For example, the county recently increased firefighter staffing and approved new fire stations in Woodstock, investments that arguably provide broader economic returns than a land bank or CLT. The Tribune Ledger News letter argued that Canton’s infrastructure challenges, like traffic congestion, should take precedence over a CLT, as they directly impact residents’ quality of life and economic activity.

Market Distortions: By removing properties from the private market, land banks and CLTs can suppress local property values, reducing tax revenues over time. In Cherokee County, where cities like Woodstock are managing parking and infrastructure projects, further market interference could dampen growth. Critics in Canton have noted that CLTs may not address the root causes of housing unaffordability, instead creating long-term restrictions that limit market flexibility.

Inefficiency Against Federal Issues: The land bank and CLTs aim to address housing affordability, but they’re Band-Aids on a crisis driven by federal monetary policy and supply constraints. Cherokee County’s efforts won’t fix the 4.5-million-home shortage or counteract corporate landlord practices. The Tribune Ledger News letter emphasized that CLTs in Canton would fail to address the scale of the housing crisis, as they cannot produce enough units to meet demand.

Risk of Gentrification: Land banks and CLTs often focus on low-income areas, which can accelerate gentrification and displace residents. In Cherokee County, where cities like Holly Springs are participating in the land bank, there’s a risk that redevelopment could prioritize wealthier newcomers over existing communities.

Administrative Bloat: The Cherokee Regional Land Bank Authority, with its seven-member board including three county appointees and one each from Canton, Holly Springs, Woodstock, and other municipalities, will require staffing and operational funding, adding bureaucratic costs. Any potential CLT in Canton would similarly need administrative oversight. This overhead further burdens taxpayers without guaranteed economic returns. The Tribune Ledger News letter highlighted that Canton’s budget cannot sustain additional administrative expenses for a CLT when infrastructure needs are already underfunded.

Addressing Counterarguments

Supporters of CLTs, argue that they provide pathways to homeownership for working families like teachers and first responders, countering speculative development and corporate landlords. They claim CLTs are a proven strategy to ensure long-term affordability. However, these arguments overlook the funding reality: CLTs and land banks, like the one in Cherokee County, rely on taxpayer subsidies, diverting resources from broader community needs. Moreover, their limited scale—often producing only a handful of units—cannot address the systemic housing shortage driven by federal policies, including monetary inflation that devalues the dollar and inflates home prices. The Tribune Ledger letter reinforces this, noting that Canton’s CLT would be a “drop in the bucket” compared to the city’s housing needs, failing to justify its cost to taxpayers.

My unCommon Sense

Cherokee County’s land bank reflects a well-meaning but flawed approach to economic challenges. Instead of sinking local dollars into these programs, the county should advocate for federal reforms—such as revising the Fed’s monetary policies to curb money supply growth, streamlining zoning incentives, or cracking down on corporate landlords. Locally, investing in job creation, infrastructure (like the ongoing Bells Ferry Road project), or tax incentives for private developers would yield broader economic benefits. Canton, in particular, should prioritize traffic and road improvements, as highlighted by local critics, to support economic growth and quality of life.

Municipal-managed CLTs and land banks, like those in Cherokee County, are a textbook case of local governments overreaching to fix federal failures. They drain taxpayer resources, distort markets, and fail to address root causes, including the devaluation of the US Dollar that drives up housing costs. If a group of private citizens/companies wants to form 501c3 Land Trust and search for private funding to benefit their local community, I would fully support it.

It’s time for Cherokee County—and communities everywhere—to demand national solutions rather than shouldering the burden alone. What’s your take on Cherokee County’s land bank or Canton’s CLT discussions? Share your thoughts in the comments below.

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Have a good one,

Dan