Our property tax rate is poisoning the city. At more than twice Baltimore County’s rate and two and half times DC’s rate, high property taxes are fueling a new wave of vacants, crime, disinvestment and flight among families. And residents are fed up that the taxes they pay don’t result in quality city services. Meanwhile, it takes a decade to assemble financing for relatively small investments in the neediest neighborhoods. To make capital more available, especially in the lowest income neighborhoods, the opportunity for investment must be more valuable.
Make no mistake, these problems are about getting capital to go into the lowest-income communities in the first place. They are not about a homebuyer’s personal credit score or how many people are using the Homeowner’s Tax Credit or even tax credits for commercial projects.
Those individual and project-level incentives are tactics. The tactics help people take advantage of opportunities when they do exist. But the structural issue is that the few opportunities that do exist are not valuable enough to be scaled. As a result, there just isn’t the demand–particularly from lenders and investors–where and when we need it.
Slashing the property tax is a fundamental strategy for Championing Working Moms and Families and Supporting Black Economic Development. On this argument, I’ve no need to reinvent the wheel. Stephen Walters said it superbly in his July 20, 2020, Opinion Editorial in the Baltimore Sun:
If two homes are identical in every way (including neighborhood amenities, school quality and street safety), one located in the high-tax city must be discounted by 14% to 17% relative to one in low-tax Baltimore County to make their monthly mortgage and tax bills comparable.
This lower rate of return on city investment fuels long, ongoing flight of capital, population and jobs that further reduces urban property values, wealth and incomes.Stephen J.K. Walters
The good news is that this is such a solvable problem–even with some of the highest crime rates this city has ever seen. Slashing property taxes will create an environment in which crime actually can be defeated — as it did in Boston. In fact, it is precisely because crime is so rampant, that it cannot and will not be defeated without creating more valuable opportunities for investment.
Listen, we can bring back the jobs, the people, the families, the investment — starting today if we commit to undertake this core action at the heart of “fixing” Baltimore.
- Action Item #1: Cap the property tax via charter amendment or via state legislative action.
- Action Item #2: Limit budget increases to 1% for the next three years, possibly offering state incentives.
- Action Item #3: Slash the property tax to $0.86 via automatic trigger within three years–span of a single administration.
- Action Item #4: Save any additional revenue resulting from increased investment in an escrow account to help balance the budget during the initial year of the lowered property tax, possibly with state incentives for adherence to savings plan.
- Action Item #5: Sell real estate assets from the City’s $4.4 billion portfolio to cover the anticipated gap, offer technical assistance from State of MD as needed.