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Endless Unpaid Tax Bills Provide Obstacle For Investment And Redevelopment Citywide

A row of houses, some abandoned, in Baltimore's Oliver neighborhood

Baltimore is a city constantly fighting against the perception of its urban decay, but part of its tax policy is proving a major impediment.

When the owner of a property defaults on taxes or other payments, the City of Baltimore places a tax lien on the property and makes it available for sale. If someone pays the outstanding balance, they can go after the owner themselves for repayment, and foreclose and take ownership otherwise.

Until that happens, the tax bill continues to build up, making properties more expensive as they become less valuable, thereby creating toxic assets that sit vacant for years, the Baltimore Sun reports. One such property, a former corner store at 2032 Penrose Ave. in West Baltimore, has been appraised at $5K but has a lien worth $1.76M. The property's most recent owner died in 1989, and the bill has been increasing ever since.

The store is one of at least 15 properties on Baltimore's tax sale list with liens north of $1M. Of the 1,400 properties put up at the last tax sale in May, 16 liens were sold. Out of $137M of unpaid bills, the city recouped $50K. A Baltimore nonprofit, the Center for Community Progress, estimated that 4,000 properties sit vacant because of Baltimore's tax sale policy.

Though city officials maintain that the lien policy allows for the city to recoup costs and for the properties to be put back into use, the city also commissioned the Center for Community Progress to work with the Baltimore City Tax Sale Work Group to recommend solutions.

"[The City of Baltimore] charged us with helping to think through how to create a tax enforcement system that focuses on maximizing revenue,” CCP Vice President Kim Graziani said to the Sun. “And to think through a system that reduces vacancy and abandonment and how to create a system that protects vulnerable occupants.

“Baltimore City’s current system is neither equitable nor efficient.” 

The center's report suggested several options, including capping liens at the market value of a property or for the city to foreclose on properties itself and ask communities for suggestions for development. The bipartisan work group will suggest fixes to the Maryland General Assembly.