Imagine living in your neighborhood and each year, more and more vacant properties take hold on your street because your neighbors had to leave their homes due to a tax sale foreclosure. Every spring, Baltimore City holds a taxlien sale where unpaid property taxes and other city liens are put up for sale. For many Baltimore City homeowners, the amounts they may owe are typically low, but are simply financially insurmountable for many families. When a homeowner has their home taken away through tax sale it is has a tremendous destabilizing impact on not only the family living in that home, but also for their neighbors and community. Once the tax sale process is complete and the family vacates the property, neighborhoods are often left with a vacant home that falls into disrepair and adds devastating blight to communities across the city.
Tax sale primarily affects financially disadvantaged homeowners in the most distressed neighborhoods. Most of MVLS’ clients are older adult homeowners facing economic hardships and are often housing one or two generations, who have lived in their homes for decades. The tax sale process is confusing, incredibly difficult to navigate and all too often homeowners are brushed off or taken advantage of unless they have an attorney helping them through the process. Sadly, an overdue $750 property tax payment can trigger the tax sale process. Having an advocate by their side can make all the difference in saving their home and their community.
Last year, Estelle* came to MVLS to help her save her home when she had nowhere else to turn. Estelle is 88 years old and a core resident of her Middle East neighborhood in Baltimore City since 1962. For 58 years, she has raised her family in Middle East, participated in community events, and been a staple in her neighborhood. Through the years, Estelle has watched her friends and community members vacate their homes due to tax sale and witnesses them anxiously searching for affordable housing elsewhere.
Estelle was proactive and made sure to apply for the Homeowner’s Property Tax Credit every year. This tax credit is often critically important for homeowners facing financial hardships to reduce their tax liability and avoid losing their home to tax sale. However, this past year Estelle was hospitalized for an extended period of time, and as a result, she missed the Homeowner’s Property Tax Credit application deadline. In Maryland, a homeowner is required to submit the application every single year and be re-qualified for the program. Without the tax credit, Estelle was facing a property tax bill that she simply couldn’t afford on her limited pension. When she was finally released from the hospital, instead of focusing on her recovery, Estelle had to face the threat of losing of her home to tax sale. Estelle needed to pay $2,017.11 in a short time to keep her home out of the tax sale auction. With no savings and a limited income, she had few options. Desperate to save her home, Estelle began looking around her home identifying any furniture that she might be able to sell to try to raise the funds. She also began making a list of everyone she knew that she might be able to borrow money from in order to pay her property taxes. Thankfully Estelle also took one more important step – she contacted MVLS. Once Estelle was matched with an attorney, they contacted the Maryland State Department of Assessment and Taxation. The attorney explained the situation and requested that the property tax credits be applied retroactively. Once the attorney had filed the necessary paperwork, the credits were approved, and Estelle was able to remain in her home. Not only does she have the peace of mind that her home has been saved, but her presence as a respected elder in her community provides value to her neighbors as well.
Tax sale compromises the financial stability of families facing economic hardships and is a constant threat to home and community stabilization. Older adults on fixed incomes are extremely vulnerable, and like Estelle, if they miss the tax credit application their home can be potentially sold in tax sale. This erases all equity in the home and leaves homeowners unable to secure affordable housing.
Additionally, when families pay their property taxes or the redemption costs, some are left in a worse financial position than before. The sudden loss of a significant amount of money at one time creates a domino effect of debt, which often leaves families needing to choose between paying for food and medicine or falling behind on utility and car payments. In order to pay the property taxes, some families have to take out loans. If Estelle had not received retroactive credits, she would have tried to borrow the money from someone to remain in her home.
Tax sale disproportionately impacts Black communities, with the entire process resulting in a tremendous extraction of wealth from Baltimore’s Black communities. For most Black families, homeownership is the most substantial asset they have, and they will do almost anything, including selling their furniture and family heirlooms like Estelle in order to pay the inflated interest rates, attorney fees, and other costs associated with tax sale redemption. The communities ravaged by tax sale are the same communities suffering from long-term housing discrimination where Black homeowners have had to overcome over-inflated purchase costs for often homes in disrepair, take out higher cost loans when traditional lending options were not available to them, and live in communities that experience disinvestment from governmental and financial entities.
This is why MVLS continues to provide individual representation to those facing tax sale foreclosure, as well as seeks to change the systemic impacts of tax sale. We do not believe the client standing in front of us owing $750 in property taxes can be separated from the structural racism that has historically economically devastated Black homeowners and communities. We will keep fighting for clients like Estelle and continue working towards a time when someone’s home cannot be taken for a small delinquent property tax bill.