A recent Viewpoint essay by Keith Losoya and Paul Warren in the Baltimore Sun have brought to light and incredible and outrageous fact: “Baltimore is one of only three large cities in the United States where the disparity between residential and business property taxes is so great the homeowners are, in effect, subsidizing commercial enterprises.”
The real estate industry has been warning the government of Baltimore City for nearly a decade that the city’s rebirth, growth, redevelopment and repopulation are seriously jeopardized by the enormous difference in property taxes between the city and the surrounding county. City residential property taxes MUST be lowered, substantially, in order to bring residents back from the suburbs and keep the new residents within the city limits.
But this revelation — that they COULD be substantially lower if commercial property taxes were brought more into parity — is especially galling. The Sun opinion piece used three adjacent rowhouses on Park Avenue in Mt. Vernon as an example. These three houses were constructed simultaneously and have significant interior space. One is residential condos, valued together at $830,000 for tax purposes. The next two are residential rental apartments. So on the surface, you’d think that they should have similar values. Yet one is valued at $309,100 and the other is valued at $231,800. No where close.
Now, I know that rental apartments are probably not in as good condition as a renovated, condo conversion. But certainly those buildings in their current situation are worth more than THAT. The authors of the essay have researched the disparity and estimated that in the last six months of 2007, the “average underassessment” of 118 commercial properties that changed hands was over 23%, which would add up to nearly $75 million that the city is NOT getting. That’s only on 118 properties!
The Mayor may not be in a political position to piss off the commercial property owners given her own troubles right now, but certainly the citizens and the City Council should take note of this and demand action to take the political heat and spread it around a bit. Otherwise the citizens would be justified in rising up to force the issue.