Baltimore Aims to Raise Property Taxes on Vacancies
[Update 1: Clarifies Baltimore city property tax] A current bill in the Maryland state legislature would give the city of Baltimore permission to raise property taxes on vacant buildings. While those in favor of the bill say it will help clean up slums in the city, opponents warn it could only make the situation worse. In December, Baltimore City Council adopted a bill that requested clearance from the state legislature to establish a split-level property tax rate, raising the rate on vacant properties. The current property tax rate in Baltimore is $2.26 per $100 of assessed value. Nick Gioia, who leads NG Realty Group of RE/MAX Sails in Baltimore, said the bill only pertains to boarded up homes that have been sitting on the market for some time, dragging down prices in nearby neighborhoods. “They’re trying to this to either force people to let go of the property or lend these properties and sell it to someone who’s going to live in it,” Gioia said. Many of the property owners oppose the bill. Gioia said that some investors will purchase the properties at auction and place them into Section 8 status. When the Section 8 tenant is done with the property, he or she will usually board it up and leave, because it would cost more to fix-up the property than the owner would get in a sale, Gioia said. “It’s a good idea if the properties are vacant and boarded up,” Gioia said. Joe DiMaggio, executive director of the Baltimore Real Estate Investors Association (BREIA), said the bill won't work. "It's just another burden with new taxes for the owner," DiMaggio said. "It would not create any positive effect in my mind. It would not be useful in getting more owners occupying the properties." According to the city resolution, a study in Austin, Texas found that neighborhood blocks with vacant buildings had more than three times as many police calls as those without vacancies. The national vacancy rate for “homeowner” housing units remained at 2.7% in Q409, unchanged from Q109, according to the US Department of Commerce. The rate only slightly wavered from 2.9% at the end of 2008 and 2.6% in Q309. The highest the rate has ever climbed since 1996 was to 2.9% in Q108 and again in Q408. Houses on blocks with vacancies sold $6,715 less than houses on blocks with no abandonments, according to research from the Temple University Center for Public Policy and Eastern Pennsylvania Organizing Project. Write to Jon Prior.