The move does not forgive any debt, but it gives thousands of homeowners at least a year to get caught up on their past-due taxes before winding up again on the tax sale list.
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 percent.
It means a quick infusion of millions of dollars to the city, but housing advocates call it a predatory practice that has disproportionately harmed the poor, older and Black residents of Baltimore. If homeowners cannot pay, it can lead to foreclosures, evictions, clouded titles and vacant homes.
Last year, Scott removed more than 970 owner-occupied homes from the tax sale list. Scott tripled that number last week, saying the city would remove all owner-occupied homes, roughly 2,900, from the tax sale list, calling it a “very personal” decision.
“It could very well be my parents or my aunts or my uncles or folks who have worked their whole lives in Baltimore,” Scott said. “This is about making sure that we are protecting people who have done so much for the city and stuck with the city.”
The deadline for property owners to pay their delinquent taxes or be placed on the tax sale list passed last month. When the city released its preliminary tax sale list earlier this year, there were over 4,150 owner-occupied properties on it. The median debt was $2,190.
Advocates had called on the mayor to cancel the tax sale because an unprecedented amount of federal money, $250 million in the Maryland Homeowner Assistance Fund, can help Maryland residents get caught up on their unpaid bills. The fund can help cover costs for homeowners impacted by the coronavirus pandemic, including grants of up to $20,000 to pay property taxes and utility bills.
The state housing agency has been accepting applications for grants from the fund since the beginning of the year, but a spokeswoman said last week that just 18 Baltimore homeowners have had their applications approved so far.
John Kern of the Stop Oppressive Seizures Fund is one of the advocates who had called on the mayor to act on the tax sale. He said he and other advocates are “overjoyed” at the decision to remove owner-occupied homes from the tax sale.
A colleague texted Kern shortly after the news broke to say she couldn’t wait to call homeowners and tell them, “You don’t have to worry.”
“People have just been terrified,” Kern said of the tax sale. “They’re just like, ‘What’s going to happen? Am I going to lose my house?’ ”
This will give housing advocates like Kern more time to contact Baltimore homeowners and connect them to resources such as the Maryland Homeowner Assistance Fund. Businesses and rental properties will remain on the tax sale list, but Kern said the decision to postpone the sale will give advocates time to make sure no owner-occupied homes mistakenly end up in the tax sale.
The future of the tax sale is unclear. Scott would not say whether he supports permanently removing owner-occupied homes from tax sales going forward, instead pointing to a task force he assembled to study the matter.
“It’s about doing what’s best for the residents of Baltimore in the long term,” Scott said. “And that’s why we put together experts and community people around the group to help inform those decisions.”