Baltimore City is offering a mind-boggling array of programs to promote homeownership among low- and moderate-income buyers. A new package recently unveiled by Mayor Kurt L. Schmoke now broadens these incentives. It should enable builders to construct more market-rate residences for wealthier buyers, while encouraging existing homeowners to add improvements.
The mayor is offering a tax credit to buyers of newly constructed homes and to those who rehab and occupy previously vacant properties. A tax break also is extended to homeowners who are making such improvements as adding a garage or building a deck.
These innovations deal with some of the most common problems prospective homebuyers are facing in Baltimore. While a step forward, the measures ought to be just the beginning of a more aggressive marketing of city homes.
As a result of decades of flight to the suburbs, Baltimore's housing market is extremely soft. A substantial surplus of rowhouses in slum neighborhoods is glutting the low-end market, raising the question of future viability of many areas. In contrast, relatively few new units are built for the middle-class and upper-end markets.
Yet the city needs new housing stock. Not because there are not enough old houses but because buyers' preferences have changed. Like their suburban cousins, buyers in the city want amenities like garages, decks, fireplaces and soaring ceilings. Existing city housing often does not provide these features, nor can it be rehabbed to contain them.
Under the Schmoke package, annual tax credits diminishing from 50 to 10 percent over five years will be given to buyers of new homes permitted after Oct. 1, 1994. This should be a boon for such forthcoming developments as Barre Station, a cluster of 113 townhouses that will be built soon near the B&O; Railroad Museum, west of the UniversityCenter academic and hospital complex.
The home improvement tax credit program is even more generous. The full added value of improvements will not be included in property taxes until six years after construction. Equally advantageous are tax credits offered under the rehabilitated vacant dwellings tax credit program.
In many cases, these incentives can be combined with a scheme that allows all homebuyers to pay property taxes in two annual increments. This has the impact of significantly lowering closing costs in Baltimore City.
With sweeteners like these, what is needed now is a coordinated drive to market residential properties in Baltimore City. The real estate industry must play a significant role in this.