Jul 21, 2014
Baltimore announced it made 20 million dollars from its tax sale in May. The city says this sinister auction helps it collect unpaid taxes, but more than anything it serves exploitative real estate investors.
The city says at least 10% of Baltimore homeowners fall behind each year on their property tax, water bills, and other city fees. (What the city doesn't admit is that inflated fees and unreasonable taxes are the real problem.) Then the city charges the homeowners interest, and some fall further behind.
To collect the full balances, the city announces an auction of “certificates” for many of the properties, especially homes considered valuable. Investors put in bids for these certificates. Investors who win bids then pay the overdue taxes. In exchange, the city lets the investors demand full repayment plus a scandalous 18% interest from the homeowners. Within six months, the homeowners have to come up with far more than what they already could not afford. If homeowners do not pay, the investors get court orders to seize the homes. The sharks evict the residents and then rent out the homes, sell them at full price, or all too often leave them vacant.
For unpaid tax as low as $250 or a water bill as low as $350, a homeowner can lose a house – and a rich creep can get it.
Thousands of residents go through great hardship and a handful of leeches make usurious profits, with the city government and courts ramming the nasty scam through.
A handful of speculators dominate each year's tax sale. This year, four investors won bids on more than half of the 700 homes up for auction.
The same bloodsuckers often operate in other cities, too, as Baltimore is only one of thousands of local governments holding similar tax sales.
This is legalized theft, pure and simple.