Public finance types have been in a wild race since March 2021 to answer how, where, and what puzzles to spend their American Rescue Plan Act (ARPA) funds on. As is known, the federal government’s response to the COVID-19 public health emergency has pumped billions of dollars into state and local government coffers. This leads to some exciting conversations – often with lawyers in tow – about what expenses are eligible and what are not. The questions are many: “Can we buy a fire engine? (Yes, in part.) “Can we repave all our roads?” (No.) “Can we improve the little league baseball fields in our park?” »(Yes, under conditions.)
County land banks have a clear role to play in helping to administer ARPA’s financing schemes, both in general and in the context of affordable housing development. Congress was careful to clarify under ARPA that state and local governments could only transfer stimulus funds to certain types of entities to implement spending plans: (i) from private organizations to non-profit, (ii) public interest companies involved in the transport of passengers or goods, or (iii) specialized units of the State or local communities. (See ARPA, Title IX, Sec. 602 (c) (3) and Sec. 603 (c) (3)).
Formed under the Ohio Nonprofit Corporations Act (RC Chapter 1702) and known as “elective subdivisions” (RC Chapter 5722), county land banks are special purpose government units and therefore serve as ideal partners to receive and administer ARPA funds for local government partners. This role can be played in spending plans focused on one of the multiple uses of ARPA funds.
The usefulness of county land banks under ARPA becomes even clearer in the context of affordable housing development.
Under ARPA and its related guidelines, 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 helping households, businesses and nonprofit organizations, or helping affected industries such as tourism, travel and hospitality ”(United States Treasury , Coronavirus State and Local Fiscal Recovery Funds, FAQ as of November 15, 2021, article 4.6).
Careful reading indicates that developing affordable housing (to cope with disproportionate economic outcomes in communities) is a clearly eligible use of ARPA funds, in response to housing insecurity. County land banks – with their unique powers under Ohio law – are excellent partners in receiving and administering ARPA funds for the purpose of increasing the supply of affordable and high-quality housing. quality in areas with limited economic opportunities and inadequate or poor quality housing. . (See US Treasury, Interim Final Rule, Additional Information, Part II, at pages 38-39) Interestingly, private for-profit developers are not appropriate assignees under ARPA.
County land banks may already be involved in the development of affordable housing, with these efforts supported by local funding sources. Significant federal stimulus funds can also be used. Affordable housing plans can be implemented – and are even presumed ARPA-eligible by the U.S. Treasury in certain neighborhoods or areas – with county land banks as valuable partners.