For decades, Baltimore City has been plagued with thousands of vacant buildings including lots, commercial and residential properties. Starting June 1, Baltimore’s City Council will have the authority to set a special tax rate for all abandoned properties.
In this year’s legislative session, the General Assembly passed the bill which Gov. Wes Moore signed into law. Lawmakers call the legislation another tool in the toolbox hoping it will deter investors from sitting on derelict properties.
“I have many vacant properties in my district,” said Baltimore City councilwoman Odette Ramos. “One of them is a corner store, and the guy's only paying a hundred dollars for taxes and he's just sitting on it. So, what we're trying to do is get that up, so that it's an incentive to say, ‘wait a second, it's going to actually cost me less to, actually do something with it.’"
The exact tax rate hasn't been set yet. State Senator Antonio Hayes, who sponsored the bill, noted that Washington D.C. has had success by assessing vacant properties at 5% of their value. Baltimore City's current property tax rate is 2.248%, the highest in the state.
According to the Department of Housing and Community Development, there are 13,411 vacant building notices in Baltimore. Of that, the city owns just 863 of them, per DHCD. While most agree that vacant buildings must be addressed, not everyone is on board with raising taxes for those who own a vacant property.
During a legislative hearing on the matter, the Maryland Chapter of the National Association for Commercial Real Estate, wrote a letter in opposition. “In our opinion, HB 2 is not a particularly good vehicle to deal with vacant and blighted property because increasing unpaid property tax obligations will make it harder to clear title and bring these properties to market,” said Tom Ballentine, vice president for policy.
The NAIOP, which represents 700 companies, proposed instead in-rem foreclosure as the most effective way to address blight. In-rem foreclosure allows the government to take over a property if an owner has defaulted on taxes or other debts. It is a legal process where the government targets the property instead of an owner.
In December, Mayor Brandon Scott unveiled a $3 billion plan to revitalize vacant houses across the city. A 2022 report from Johns Hopkins University estimated that vacant properties cost the city about $100 million annually.
Click here to learn more about the city’s plan.