Advocates: Bill on tax sales would rescind protections for Baltimoreans
At first, Allison Harris supported the bill from Democratic Gov. Wes Moore’s housing administration focused on the tax sale process.
Harris, a Baltimore-based lawyer who assists homeowners whose property-related debts end up in tax sale, was pleased that the bill would build new protections into the process across the state.
But recent amendments have caused her — and a host of other housing affordability advocates — to withdraw their support for the bill, which passed the House of Delegates on Tuesday by a vote of 126-10.
With the amendments, the bill actually would roll back a protection that was codified for Baltimore about five years ago, said Harris, who is the director of the Home Preservation Project at the Pro Bono Resource Center of Maryland.
Currently, no residential properties in the city can go to tax sale solely for unpaid water bills. Originally, the bill put forward by Moore’s Department of Housing and Community Development would have extended that exemption statewide.
But with amendments tacked on in committee, the exemption would be limited to owner-occupied residences.
That narrow language could have damaging
Police officers raise the U.S. and Maryland flags over the State House dome in Annapolis on Jan. 10, 2023. consequences for renters, property heirs and other individuals who do not own the home they are living in, Harris said, leaving them vulnerable to the tax sale process, which many advocates consider exploitative.
“I was very excited about this bill early in the session,” Harris said. “It’s very disappointing that this has taken such a difficult turn for so many of us, who have been doing this work for so long.”
In a statement, Allison Foster, spokesperson for the state housing department, said the bill, House Bill 243, “offers additional protections for impacted vulnerable homeowners – who are disproportionately Black, elderly, and/or disabled – to keep them in their homes as contributors to both the social fabric and economic viability of their communities.”
Harris said she agrees the bill includes some other good provisions, but unless the water bill item is changed, she will oppose the whole thing.
In Baltimore, the tax sale is an annual auction, during which the city sells the rights to collect overdue property taxes.
The buyers, often profit-making debt collectors, tack on fees and add high interest rates, while also getting a lien against the homeowner’s property. For the city, the process is a revenue generator.
But for owners who cannot pay the growing cost, the tax sale can lead to foreclosure. The process has been labeled as predatory and confusing for homeowners. In recent years, Mayor Brandon Scott has chosen to remove certain owner-occupied homes from the process altogether.
Some city politicians, including City Councilwoman Odette Ramos, who represents the city’s 14th district, have been working to overhaul the tax sale process, and replace it with payment plans for indebted homeowners.
“We have these things almost in place,” Ramos said. “So having a bill that puts us back years in the work is really very frustrating.”
Bryan Doherty, a spokesman for Scott, said in a statement that as the bill moves through the legislative process, “the Administration is working to ensure that the necessary protections for owner-occupied homes and renters are included in the final version, while also balancing the fiscal needs of the city.”
Supporters of the amended language say that the existing policy lets problematic owners and landlords off the hook, and leaves some water bills unpaid.
Without the tax sale process to recoup water bill debt from residential properties, the city of Baltimore is handcuffed, said Del. Dalya Attar, a Democrat representing Baltimore’s 41st District, who voted in favor of the bill in the Ways and Means Committee.
“Why should investors be exempted from paying water bills and providing vitally needed revenue? Both the state and the city are facing serious budget shortfalls. The city water infrastructure is crumbling,” Attar wrote in an email.
At a General Assembly hearing for the original bill, tax sale purchasers advocated for limiting the water bill protection to only “owner-occupied” homes.
“If the true intent is to protect grandma from losing her home, the unintended consequence should not be to protect the vacants, the abandoneds, the commercials or the slumlords,” said Frank Boston, a lobbyist who spoke on behalf of the Tax Sale Participants Association.
But not every home listed as non-owner-occupied in the state database is vacant — or owned by a traditional landlord — Harris said. For one thing, administrative errors can cause it.
It also could happen if a property owner dies, for instance, and their family members continue living in the home without placing themselves on the deed, Harris said.
As a result, the new legislation would reopen the possibility of family homes going to tax sale for water bill debt, said Shana Roth-Gormley, a staff attorney for the Community Law Center.
“There’s also just a bigger moral question,” Roth-Gormley said. “Should people lose their entire homes over water bills, when we know that water is a human right?”
The city’s protection also extended to houses of worship, which would lose protection under the current bill, Roth-Gormley said.
Attar said that property heirs would be protected by a different bill, House
Bill 54, which passed earlier this month, and would allow heirs to enter a payment plan for unpaid property taxes.
To Attar, the legislation exempting residential water bill debt from the tax sale was a “stop-gap decision because of water billing issues with the city’s new water billing system that have now largely been resolved,” she wrote.
But many housing advocates feel those protections should remain long-term, given that problems with water billing have not abated entirely.
Mary Grant, director of the Public Water for All campaign at Food & Water Watch, said inaccurate water bills remain difficult to correct, though improvements have been made since 2019. When things go wrong, water bills can become exorbitant.
Harris herself dealt with multi-thousand-dollar water bills after a water main break occurred below her home, she said.
While she worked to correct the problem, her unpaid bills could have landed her in tax sale, if she had been delinquent as of the April 30 cutoff date, she said.
“That can happen to anyone,” Harris said.