Baltimore's heavy-handed use of eminent domain and persistently high property taxes have forced residents and businesses to flee the city in the last half-century and contributed to the decline of neighborhoods, a Loyola College economist argues in a report published yesterday.
Stephen J.K. Walters, in "Baltimore's Flawed Renaissance," writes that the city's pervasive poverty, high crime rate and decaying housing is a direct result of "hostility to private property rights and a resulting flight of capital that has largely drained the city of its economic lifeblood."
The paper was published in Perspectives in Eminent Domain Abuse by the Institute for Justice, a libertarian law firm in Arlington, Va. Walters' co-author was Louis Miserendino, a history teacher at Calvert Hall College High School.
Eminent domain and the threat of its use has deterred Baltimore residents and businesses from improving their properties and ultimately driven many of them out of the city, the authors say. And the threat of highways being built through east- and west-side neighborhoods emptied out many communities in the 1960s and 1970s.
The report argues that Charles Center and the Inner Harbor before redevelopment were not nearly as rundown as people claim and that the huge amounts of money put into them could have been spent better elsewhere in the city.
Equally troubling, Walters and Miserendino say, is the city's highest-in-the-state property tax rate of $2.268 per $100 of assessed value. Baltimore County's rate is $1.10 per $100 of value, less than half the city's tax.
The high rate has forced the city to give tax breaks and subsidies to lure major companies to town and to keep them here, the authors say.
They argue that those breaks would have been more beneficial if applied across the board, to all businesses and residents in Baltimore.
"What would have happened all over the city had the tax breaks given to the favored few been available everywhere, to everyone?" they ask.
The provocative report was greeted with skepticism by other observers of Baltimore's economy.
Richard P. Clinch, a University of Baltimore economist, said to blame eminent domain for the decline of the city is "wrong on its face." He said a host of factors were at work, including the suburbanization of jobs and Baltimore's position as a "dumping ground for poor, less-educated people with a higher incidence of criminal behavior."
Gene Bracken, a spokesman for the Greater Baltimore Committee, said the city's property taxes need to be reduced. But he said that eminent domain has been used fairly in the city and that it would "be a stretch" to blame it for population loss.
"You need some kind of tool to be able to accumulate the amount of land you need for massive redevelopment," he said. "Every day, we look out and see the value that resulted from its use."
Walters said Baltimore needs to significantly reduce property taxes and "stop the seizure of private property" if it wants to bring investment and residents back to the city.
The full report can be read at ij.org.