Land Bank Lots: How Builders and Investors Buy Vacant Lots From a Land Bank

On October 28, Detroit Mayor Mary Sheffield launched Project 1,000, a plan to build 1,000 new infill homes in Detroit neighborhoods by 2031. The land for most of those homes already exists. It is sitting in public hands as vacant land bank lots.

That makes Detroit the clearest case yet of a trend builders and land investors should watch: cities are trying to turn publicly owned vacant lots into new housing, and they are lining up zoning, permits and subsidies behind the builders who do it. Here is what Detroit announced, how land banks sell lots, and how to decide whether a land bank lot fits your buy box.

What Detroit's Project 1,000 Actually Does

According to the City of Detroit's announcement, Project 1,000 aims to deliver 1,000 new one-to-four family homes (single-family houses, duplexes, triplexes, quadplexes, townhomes and condos) by 2031. That means roughly 250 new homes a year. For context, the city counted 84 new units in one-to-four unit buildings in 2024 and 114 in 2025, as MLive reported.

The plan has three parts that matter for land buyers:

• Small-lot zoning reform ("Rise and Restore"). Many Detroit residential districts require lots of at least 5,000 square feet and 50 feet wide. The proposal changes minimum lot size, setbacks and lot coverage so homes can go back on small lots without individual city approvals. It goes to the City Planning Commission on November 5, 2026, and could be usable as early as Q1 2027 if City Council approves it (Detroit's Rise and Restore presentation).
• Pre-approved home designs. The city is building a library of permit-ready plans, with initial designs expected in early to mid-2027. High-volume builders can submit their own plans to the library.
• Bundled land bank lots with subsidies. The Housing and Revitalization Department will offer bundled Detroit Land Bank Authority (DLBA) lots with subsidies to developers through "One-to-Four" infill RFPs. A pilot is running in North Corktown, with two more RFPs planned for 2027.

The scale is large. WDIV ClickOnDetroit reports Detroit has an estimated 120,000 vacant lots, and nearly half are owned by the DLBA. The Detroit Land Bank Authority's site currently lists more than 59,000 vacant land parcels in its inventory and says it has sold over 32,000 vacant lots to date.

Small-lot rules are part of a wider wave. We covered Akron's repeal of minimum lot sizes and other lot size reforms last week. Detroit adds something different: the public land itself, packaged for builders.

What Is a Land Bank?

A land bank is a public entity with legal powers to take vacant, abandoned and tax-foreclosed property, clear title, and put it back to productive use. The Center for Community Progress counts more than 350 land banks and land banking programs in the U.S., and says more than 75% of land bank property is vacant land, often lots left behind after a house was demolished. Its National Land Bank Map, updated in May 2026, is the best place to find the land bank in your target county.

Two things make land bank lots different from a normal lot purchase:

1. Title is often cleaned up. Land banks can clear liens and back taxes that make tax-foreclosed land hard to buy on the open market. That is a big deal compared with tax deed parcels, where title problems are common.
2. Price is not the only factor. Land banks are told to sell to responsible buyers whose plans fit community goals. Expect applications, build or maintenance requirements, deadlines, and sometimes reverter clauses that return the lot if you do not perform.

How to Buy Vacant Lots From a Land Bank

Every land bank sets its own rules, but the process usually looks like this:

1. Find the land bank and its inventory. Start with the national map, then browse the land bank's own listings. Detroit's are on buildingdetroit.org.
2. Pick the right program. Most land banks separate side lots (sold to the neighbor, often for a nominal price), neighborhood or oversized lots, homes, and developer or RFP sales. Builders usually go through developer sales or RFPs, not side lot programs.
3. Apply with a real plan. Expect to show what you will build, your timeline, proof of funds or financing, and your track record. Some land banks check that you have no tax delinquencies or code violations on other properties in the county.
4. Meet the conditions. Read the deed restrictions, build deadlines and any reverter clause before you close. A cheap lot with a 12-month build requirement is a liability if your financing is not lined up.
5. Close and build. Many land banks handle closing in-house. Budget for survey, utility taps, demolition debris removal and permits on top of the purchase price.

Due Diligence on Land Bank Lots

A low price does not make a lot a good deal. Check the same things you would on any infill lot, plus a few extras:

• Buildability under current zoning. In Detroit, many small lots only become buildable if Rise and Restore passes. Do not price a lot on a rule that is still pending.
• Old foundations and fill. Lots left after demolitions can hide basements, debris or poorly compacted fill that raise foundation costs.
• Utilities. Confirm water, sewer and power connections and the tap fees. Detroit's plan includes coordinating water lines and infrastructure, but each site still needs checking.
• Comparable sales. Your exit price drives everything. With NAHB's builder confidence index at 29 in October, its lowest since 2012, and 43% of builders cutting prices, run conservative after-repair values.
• Carrying costs. The Fed held rates at 3.75% to 4% on October 28 with two members voting to hike (Federal Reserve statement). Construction and land loans stay expensive, so a build deadline that forces you to borrow at the wrong time matters. See our breakdown of land loan rates.

Our guide on how builders find buildable lots covers the core due diligence checklist in more detail.

Who Should Look at Land Bank Lots

• Small and mid-size builders who can build scattered-site infill and want subsidized or low-cost land, especially in cities pairing land with pre-approved plans.
• Mobile and manufactured home investors, where local zoning allows it. Check whether the land bank accepts manufactured homes and whether the city treats them like site-built homes. Our post on manufactured home zoning by right explains how some states now require that.
• Land investors and wholesalers should be careful. Many land banks restrict resale or flipping, and some screen out speculators on purpose. Detroit's own materials say making land usable "leaves less room for speculators." The bigger opportunity for investors is often the private lots next to land bank activity, where values can rise once new homes go up.

How LandMatch Fits In

Land bank programs only work if builders show up ready to build. That is exactly the gap LandMatch USA is built for. Builders and land buyers post their buy box (the counties, lot sizes, zoning and price range they want) on the LandMatch map, so wholesalers and landowners with private infill lots near these programs can bring deals straight to them.

If you build infill homes, post your buy box on LandMatch and let the lots come to you. If you own a vacant lot in a city that is changing its rules, see how to sell land to buyers already looking in your area. New to buy boxes? Start with what a land buy box is and how to write one.

FAQ

What are land bank lots?

Land bank lots are vacant parcels owned by a public land bank, usually after tax foreclosure or demolition. Land banks clear title and sell them to buyers who will put them back to use.

Can anyone buy vacant lots from a land bank?

Usually yes, but each land bank has rules. Many require an application, proof of funds, a development plan and no tax delinquencies. Side lot programs are often limited to the owner of the property next door.

How many lots does the Detroit Land Bank Authority own?

Its website lists more than 59,000 vacant land parcels, and local reporting says the DLBA owns nearly half of Detroit's estimated 120,000 vacant lots.

When could Detroit's small-lot zoning change take effect?

The Rise and Restore changes go to the City Planning Commission on November 5, 2026. If City Council approves them on schedule, builders could use the new standards as early as Q1 2027.

Can I flip a land bank lot?

Often not right away. Many land banks attach build deadlines, resale limits or reverter clauses. Read the purchase agreement and deed restrictions before you buy.

How do builders find more land beyond land banks?

Combine land bank programs with private sources: wholesalers, direct mail to owners, brokers and buyer maps like LandMatch, where you post your buy box so sellers know exactly what you want.