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City officials welcome passage of bill to limit tax sales

The General Assembly has given final approval to a bill to make it harder for Baltimore to put owner-occupied homes up for tax sale over unpaid taxes and water bills.

The bill, a key piece of Mayor Stephanie Rawlings-Blake's legislative agenda, is headed to Gov. Larry Hogan's desk for signature. The measure raises the minimum debt that could trigger a tax sale to $750.

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"We must do everything possible to help residents remain in their homes," Rawlings-Blake said.

She said her administration has launched initiatives that have reduced the number of liens offered for tax sale from nearly 11,000 in 2011 to about 8,300 last year. "I'm optimistic this legislation will help us to drive those numbers even lower," she said.

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A Hogan spokeswoman said the governor is reviewing the legislation and hasn't taken a position. State officials often defer to the wishes of local governments on local matters.

Under the current city system, homes can go to tax sale for $350 in unpaid water and sewer bills and $250 in outstanding property taxes.

In a tax sale, the city sells a homeowner's debt to an investor, who then tries to collect the debt plus interest from that owner. If the homeowner does not repay both, the investor can foreclose on the property.

Such debts can grow to thousands of dollars with court costs and legal fees. To address that, the bill also permits the city to offer homeowners installment payment plans.

The bill originally sought to set the minimum due to trigger a tax sale at $500, but lawmakers changed it to $750.

City Council President Bernard C. "Jack" Young went to Annapolis to testify in support of the legislation.

Young has pushed for the change for years, said spokesman Lester Davis. Forcing residents from their homes is harmful to neighborhoods as well as families, who often must seek social services, he said.

"It doesn't make fiscal sense to put people out of their homes for minuscule amounts of money," Davis said. "You have this happening in communities that were already trying to recover and get their footing."

The city plans to take an added step to help residents avoid a tax sale by hiring an ombudsman in July.

A study by the Abell Foundation released in the fall helped draw attention to the issue. The study revealed how the tax sale system helps enrich investors and hurts vulnerable residents over relatively modest debts.

Even with the extra protections, Baltimore would still take more aggressive action than other large cities. In New York and Washington, for instance, homes cannot be sold at a tax sale for unpaid water bills.

City officials say they are taking steps to intervene earlier: sending shut-off notices to residents at least six months and $250 behind on their water bills. The threat of losing service is expected to help the city collect about $40 million in past-due bills from about 25,000 delinquent customers.

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