How Land Banks Can Unlock Affordable Housing Development: Insights from Daniel Asbury Jr.

Why Land Banks Matter for Affordable Housing Investors

Imagine buying land for just a few thousand dollars, with utilities already connected, and turning it into profitable, attainable housing. That is exactly what Daniel Asbury Jr., co-founder of Keystone Capital Group, is doing in Ohio.

On this episode of the Affordable Housing & Real Estate Investing Podcast, hosted by Kent Fai He, Daniel breaks down how land banks operate, why they are overlooked by most developers, and how they can be leveraged to solve America’s housing shortage while still generating strong returns.

Daniel’s story is powerful: a former freight broker turned fund manager who partnered with a local builder to develop over 100 homes on land bank lots since 2021. His model shows investors, developers, and community advocates a path forward in one of the most urgent issues of our time: creating more affordable housing supply.

What Is a Land Bank and How Does It Work?

Land banks are 501(c)(3) nonprofits created to fight blight in struggling communities. They acquire tax-delinquent or abandoned properties, demolish unsafe structures, and sell the lots to developers for pennies on the dollar.

• They often come with utilities already in place, cutting 20–30% off project budgets.
  
  

• Boards are usually run by municipal leaders, with federal and local funding supporting their work.
  
  

• First launched in Detroit in 2013, land banks now operate across much of the Midwest, and are expanding into states like Texas.
  
  

For developers, this means nearly zero land costs, faster approvals, and an opportunity to partner directly with local governments.

How Do You Build Affordable Homes with Land Banks?

Daniel and his team at Keystone Capital Group have perfected the model:

• Acquire multiple adjacent lots through the land bank.
  
  

• Build high-quality, entry-level homes (2–3 bedrooms, open concept, ranch style).
  
  

• Keep costs all-in around $110K per home and list for $170K–$220K.
  
  

• Sell homes within days due to massive demand.
  
  

For example, in Mansfield, Ohio, Daniel’s team built four homes in under four months, each selling within three days of listing. That speed and affordability is rare in today’s housing market.

Why Use a Fund Model Instead of Joint Ventures?

One of Daniel’s biggest contributions is structuring projects under a fund model rather than small, one-off partnerships:

• A single fund simplifies taxes (one K-1 instead of dozens).
  
  

• Cash is always on hand to seize deals quickly.
  
  

• Investors share in diversified projects, reducing risk.
  
  

As Daniel puts it: “With a fund model, you don’t need to scramble for capital every time a new deal comes up. You’re ready to move when the opportunity arises.”

What Are the Risks and Limitations of Land Bank Deals?

Like any real estate strategy, land banks come with challenges:

• Deed restrictions: Some land banks require holding periods before resale, though experienced developers like Daniel can negotiate exceptions.
  
  

• Politics: Boards may be slow-moving or inconsistent in decision-making.
  
  

• Utilities: Not all lots have full connections, which can increase upfront costs.
  
  

Still, the upside is enormous. With shortages of 3,500–5,000 homes in Daniel’s county alone, the demand far outweighs the risks.

Key Insights for Affordable Housing Developers

• Land banks slash project costs: Saving 20–30% of budgets by eliminating land and utility expenses.
  
  

• Fund models unlock scale: Aggregating investor capital allows faster growth than single-deal partnerships.
  
  

• Target mid-markets: Cities with 30K–80K residents often have housing shortages but little competition.
  
  

• Follow industry hubs: Areas where manufacturers are adding jobs will need workforce housing fast.
  
  

• Relationships matter: Building credibility with local land bank boards opens doors to prime lots.
  
  

Memorable Quotes from Daniel Asbury Jr.

“We’ve built 100 units on land bank lots since 2021. I’ve never put a nail in wood, but I can say we’re solving housing shortages with this model.”

“You can spend years chasing deals. Or you can work with a land bank and get land for practically nothing.”

“At one point, my partner had 40 K-1s from joint ventures. A fund model changed everything.”

“The market dictates this is needed. We’re not building luxury homes, we’re building great starters and downsizers.”

Common Questions About Land Banks

How do you qualify to buy from a land bank?
You’ll need proof of funds, development plans, and a timeline. Inexperienced applicants may face deed restrictions, but credibility unlocks flexibility.

Are land banks only for affordable housing?
No. They’re designed to fight blight, but developers can build starter homes, workforce housing, or even rentals. The key is aligning with community needs.

Where are land banks most active?
The Midwest leads (Ohio, Michigan, Indiana, Illinois), but expansion is underway in Texas and other states.

Do land banks give away land for free?
Sometimes. Developers can donate distressed properties to the land bank, write off the appraised value, and receive build-ready lots in return.

Why This Matters for Affordable Housing

This episode highlights a path many investors overlook. By partnering with land banks, developers can cut costs, move faster, and make a measurable impact in their communities.

Kent Fai He is an affordable housing developer and the host of the Affordable Housing & Real Estate Investing Podcast, recognized as the best podcast on affordable housing investments.

If you’re serious about creating housing solutions while building profitable projects, this is a strategy worth studying.

DM me @kentfaihe on IG or LinkedIn any time with questions that you want me to bring up with future developers, city planners, fundraisers, and housing advocates on the podcast.