Owner-occupied homes removed from tax sale

Baltimore limits forgiveness to those worth $250,000 or less

Three weeks after announcing the city would remove owner-occupied homes from the city’s annual tax sale for the third consecutive year, Mayor Brandon Scott said Wednesday that the city’s forgiveness will be limited to properties worth $250,000 or less.

The move does not forgive any debts, but it gives many homeowners time — at least a year — to get caught up on their past-due taxes before winding up on the tax sale list again.

The tax sale is an annual auction at which the city sells the rights to collect past-due property taxes. The buyers are often debt collectors who tack on fees and add interest rates of up to 12%, while also getting a lien against the homeowner’s property.

Housing advocates have long called the practice predatory, arguing it disproportionately impacts Baltimore’s poor, older and Black residents. For those who can’t pay, the tax sale often leads to foreclosures, evictions, clouded titles and vacant homes.

City leaders backed state legislation during the General Assembly’s annual session earlier this year that would have overhauled Baltimore’s tax debt collection process, canceling the sale and instead establishing a separate tax collection system with payment plans. In rem foreclosures, which allow the city to foreclose on tax liens and take clear title to a property, would have been used as a last resort.

The legislation, however, was mired during the final days of session and did not become law.

Scott said during a news conference Wednesday that he will continue to support state legislation to reform the process.

Until then, however, tweaks to the tax sale will be made locally on a year-byyear basis. With Wednesday’s announcement, 1,804 properties will be removed from tax sale. That’s a reduction from the 2,900 properties removed in 2022, but more than the 973 spared from the sale in 2021. The homeowners removed this year owe more than $13 million.

About 170 owner-occupied homes remain in this year’s tax sale, according to Councilwoman Odette Ramos.

Asked how he reached the decision to limit the forgiveness process to properties valued at $250,000 or less for the first time, Scott, a Democrat in his first term as mayor, said he was targeting families who need assistance most.

“Now that we’re coming out of the pandemic, we know that things are changing and things are never going back, and we wanted to be able to focus in on those most in need,” Scott said.

The mayor added that he hopes to reform the process next year on the state level, making the forgiveness unnecessary.

“That’s how we want to move forward,” he said. “This is just the beginning.”

Baltimore faces an unexpected financial crunch in the year ahead due to the implementation of the Blueprint for Maryland’s Future plan, a 10-year effort to improve education by injecting billions of dollars into public schools. The program, which began last year, calls for the state and local jurisdictions to provide additional funding for education each year.

Baltimore had prepared for a $12 million boost in spending in fiscal year 2024 based on state projections, but instead owes an extra $79.4 million. The city is filling most of the gap with money from a one-time surplus in the previous year’s budget and cuts to staffing costsforvacantpositions.

Ramos, a Democrat who lobbied for the tax sale reform legislation at the state level and pushed for past tax sale forgiveness efforts, commended Scott on Wednesday, calling the forgiveness announcement the “first step to true reform.”

“This is a team effort,” she said. “This is one of the times where all of us are in line with what we need to do next.”