If you’ve ever wondered how systems and structures contribute to discrimination, this is a great story to read. It’s about a property tax auction in Baltimore. The City holds the auction every year to recover outstanding property taxes.
Creative ‘investors’ have figured out several ways to profit from the auction. Black homeowners who owe taxes are targets for these profit-making schemes.
It’s not all bad news, though. A City agency began work to dismantle the auction system in 2012. Each year, there have been incremental reforms to undo the rules that enable the discrimination. This year, the agency has had something of a breakthrough — homeowners who owe taxes will be excluded from the auction. There will be no opportunity for ‘investors’ to target the homeowners.
How on earth does a ‘tax auction’ work, and why, of all people, are the owners of properties who owe taxes not involved ‘for their own protection?’ You’ll need to read the following Shelterforce article to puzzle that out.
Baltimore’s reforms to its tax auction are a start, but the property tax system itself discourages owners from investing in building upkeep, especially in neighbourhoods where land values are rising.
The Shelterforce article also discusses a new property tax model that is being tested in 15 cities in Pennsylvania. It applies different tax rates for land and buildings. The intent is to protect existing affordable housing stock, which is more likely to be occupied by Black owners and renters. This split tax rate experiment may be of interest in all communities that are witnessing building neglect and rocketing land prices.
Read more at Shelterforce: Vacant Homes Wither Under Flawed Tax Sale System
