Opinion Piece – Tax Sales Provide Revenue, Short Change Communities

In an opinion piece for the Baltimore Sun, Robin Jacobs, a staff attorney for the Community Law Center, argues that while the tax sale process provides much-needed revenue for local governments, it “exacerbates the adverse effects already felt by communities long struggling with vacant properties or ravaged by recent mortgage foreclosures.”

From the piece,

If the bidder realizes there’s no value to the property at some point in the tax foreclosure process, he may simply walk away, refusing to record a deed, leaving the title to the property clouded and in limbo. Anyone who subsequently wishes to purchase the property must clear the title, a potentially arduous and expensive process.

If no one bids on the property and the local municipality does not foreclose on it, the property simply sits until it cycles back into the tax sale, often after acquiring even more liens.

As the liens pile up, and the title becomes tangled, it becomes more and more difficult for reinvestment to take place. A home may become so far underwater that no rational developer or buyer would dream of diving into the depths of debt to save it. Community gardeners may take interest in creating a green space on the site of these vacant properties, but ownership remains out of reach if it takes thousands or even millions to fund their flowers.

Instead of clearing title, promoting reinvestment and furthering productive reuse, the speculation in the tax sale system perpetuates a vicious cycle of vacancy and abandonment. These vacant, abandoned properties become harbingers of crime, fire, trash and further disinvestment.

To address these issues, the Community Law Center has joined with the Baltimore Homeownership Preservation Coalition to convene a work group to study the process and improve the system.

We are looking at innovations that ensure revenue collection while also protecting both homeowners and neighborhoods. Our goals include making the system simpler and more compassionate, transparent, efficient and effective.

Ms. Jacobs chairs the Tax Sale Foreclosure Committee of the Baltimore Homeownership Preservation Coalition.