BALTIMORE — Baltimore City faces a new lawsuit in which they are accused of stripping away wealth from low-income residents.
Maryland Legal Aid (MLA) filed the lawsuit Tuesday on behalf of the Edmondson Community Organization (ECO), challenging the city's annual property tax sale auction process that 'unconstitutionally strips equity from residents' homes and businesses.'
Maryland Legal Aid is arguing that the process is severely harmful to Baltimore property owners.
Those practices includes:
- Charging a high-bid premium that penalizes bidders for making a fair bid for each property;
- Failing to establish a minimum bid to assure that property owners are fairly compensated for the properties they lose;
- Advertising 15,000 to 20,000 properties in a single list and auctioning all the properties in a closed-bid, online auction on a single day;
- Minimally advertising the properties subject to the sale; and
- Conducting tax sales in a manner that hinders competitive bidding.
"These practices lead to properties being sold for a fraction of their actual value, which satisfies the City’s interest in collecting taxes but deprives property owners of their equity without just compensation and frustrates the transfer of intergenerational wealth through property ownership," Maryland Legal Aid said in a press release.
During a press conference Tuesday, many Edmondson residents joined Maryland Legal Aid in support of the lawsuit.
"The tax sale has devastated communities like ours. It is perfectly built for sophisticated investors to rip the equity out of the hands of unsuspecting low-income folks who live here - and to do so in a fundamentally unfair - and we believe, unconstitutional way. It has left vacant houses and tangled titles everywhere in its wake,” shared ECO president Joe Richardson, “The destruction has got to end now. We need a new common-sense, fairer system to protect the equity of the most vulnerable, and to allow communities like ours to thrive."
In recent years, Mayor Brandon Scott has made changes to the tax sale.
RELATED: Owner occupied homes valued at $250k or less are being removed from Baltimore City's 2023 tax sale
Back in May 2023, Mayor Scott ordered all owner-occupied homes valued at $250,000 or less to be removed from that year's tax sale.
Scott also removed all first-time, owner-occupied tax sale liens back in 2021.
Baltimore City also bought out the liens of 454 owner-occupied homes, which eliminated them from the tax sale process.
