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Memo to the Mayor: Renters Do Not Pay Property Taxes.

A new plan by Mayor Rawlings-Blake to attract renters to the city will do nothing to help home owners.

As reported by the Baltimore Business Journal, Mayor Stephanie Rawlings-Blake wants to give property tax credits to builders of apartments (50 or more units) in certain sections of the city, including downtown.

The tax break would apply to either new apartments or office buildings converted to apartments.

This is part of the Mayor's (rather vague) goal of attracting 10,000 new families to Baltimore City in 10 years.

Assuming under this plan, the Mayor means rental units and not owner occupied condominiums, there is one major flaw that I can see:

Renters do not pay property taxes. 

While the city may see an increase in the local tax collected by new residents renting in the city, it is doubtful that those dollars would be enough to offset the amount of money lost by the continued exodus of people leaving the city, many of them home owners.

(This also goes to the vagueness of the Mayor's "10,000 new families" goal.  What if a single person moves into one of these new apartments while a family of five moves out of a neighborhood that is dying?  Does the Mayor count this as "one new family" even though the net lose to the city population is four?)

And the fact is that with so many abandoned homes in the city just rotting away, why isn't this plan more geared towards converting those sagging hulks into units occupied by owners?

I have said it before and I will say it again, Baltimore City needs to start giving those boarded up monstrosities away to people who will promise to fix them up and live in them for ten years.

We could start by giving them away to public employees (cops, firefighters, clerks, etc.). 

We could give them away with no or low interest loans to help the takers refurbish the homes.

I would wager that if Baltimore City saw an increase in home owners who pay property taxes (and, in theory, lowering the property tax rate for everyone), than apartment builders would have reason to build without any tax incentives.  The private sector will go where the money is.  

I have nothing against renters and I give credit to the Mayor for trying to turn our city around.  But I do question the benefit the city receives by giving these kind of breaks to builders of apartments while many home owners struggle every day to stay afloat in our drowning city.  

This post is contributed by a community member. The views expressed in this blog are those of the author and do not necessarily reflect those of Patch Media Corporation. Everyone is welcome to submit a post to Patch. If you'd like to post a blog, go here to get started.

Baltimore Matt January 28, 2013 at 09:49 PM
Hey Stephanie, how about 10,000 new jobs instead...and then the residents you want will bring themselves (with a paycheck and a tax bill). This mayor is very short sighted. She just wants anyone with a pulse without caring about their life situation and whether they will be an asset to this city, so she can say the city is a certain size in order to get federal and state aid. What we need are jobs...and then the people will bring themselves. People generally move to cities to be near their work, therefore we need to bring work to Baltimore. To bring work, maybe we can start by elimating business taxes (Johns Hopkins seems to be able to thrive in Baltimore with their current tax situation).
Able Baker January 31, 2013 at 05:46 PM
Note to Sean Tully: Owner occupied houses pay less property tax over time than rented because they're eligible for the homeowner's tax credit.
Duane G. Davis February 01, 2013 at 04:29 AM
Renters pay the landlord .Landlord pays property tax.you gonna tax everyone that lives in the City ,but allow City officials to live outside the City to avoid paying the taxes they impose on the Citizens???? In the 1800's they call it share cropping. And the Mayor is playing overseer of O'Malley Plantation....You gonna tax the dog for pooping next???
Sean Tully February 01, 2013 at 04:45 AM
Note to Able Baker: Owner occupied houses are owned by people who plant roots in a community. Rentals do not for the most part. I will take a city full of owner occupied homes, even if they pay less property taxes over rental units.
Able Baker February 04, 2013 at 05:55 PM
Sure, there's plenty of reasons to prefer owner occupied housing to renters, but that's not the title nor the thesis of your article.
Sean Tully February 04, 2013 at 09:18 PM
Able, the thesis is that the builders of these apartment won't be paying full property taxes for 15 years and that the city should not be doing that but instead should be finding ways to attract home owners. That is the thesis. Do you have an argument with that?
Sean Tully February 04, 2013 at 09:19 PM
These landlords won't be paying full property taxes for 15 years. That is the point.
Able Baker February 05, 2013 at 08:32 PM
Look, I realize you wanted a catchy headline for your article, but at least make it make sense. "Memo to the Mayor: City Can't Afford Developer Tax Breaks". Done. You don't really have a thesis here. You've got some vague hypotheticals none of which you really develop.
Sanchez February 05, 2013 at 08:59 PM
Anyone can drive through neighborhoods and tell whether the area is owner occupied or rentals. Too many rental properties in any given area destroy property values.
Sean Tully February 06, 2013 at 03:20 AM
Able, true enough on the headline. I am not a professional writer and headlines are the weakest link in my fairly weak chain. I disagree somewhat on the thesis part. I write these blogs instead of Sunpapers Letters to the Editor. I used to write them a lot and have had many published. I am rather good, if I don't mind saying so myself, at short, concise pieces. Having said that, you are right that this (or most of my blogs) aren't fully developed. I generally write these off the top of my head in one sitting, in lieu of a Letter to the Editor. I think the thesis can be summed up in one sentence (which is in the blog), "...with so many abandoned homes in the city just rotting away, why isn't this plan more geared towards converting those sagging hulks into units occupied by owners?" It seems others got it. You didn't. I am most certainly partly to blame for that.
Baltimore Matt February 06, 2013 at 02:27 PM
Sean 15 years is a very small window in time when it comes to a tax break. What happens in 15 year 4 presidential elections, half of a standard mortgage term, etc. When you spend millions of dollars building, you expect that the building will be there for much longer (100 years). If the city wants to look less like a ghetto, maybe there should be a major tax break every time you perform work to your building regardless of who owns it or who it houses. The current system encourages people to build but doesn't encourage them to maintain and update. What we need is real property tax reform in this city (the type with policies that will last 100 years) and to have a mayor who has a long term vision of what this city can become not just falling into the trap of robbing of the current mayor of robbing Peter to pay Paul. Until we have that we are on the fast track (it may be in the next 15 years or so) to a municipal bankruptcy.
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