Mayor Scott’s Approach to Addressing Baltimore’s Vacant Properties at Scale

 

Our Challenge

Baltimore is the birthplace of redlining, a racist housing policy that originated in Baltimore in 1910. Redlining is at the root of Baltimore’s hyper-segregated neighborhoods, and has impacted the health, education and life expectancy outcomes of Baltimoreans for generations. The maps below confirm what we already know: racist polices and disinvestment create high concentrations of vacant property and blight in our predominantly Black neighborhoods.

Neighborhoods by Race Map                                                        Density of Vacant Building Notices

Race Map with Density of Vacant Building Notices

When Mayor Scott took office, Baltimore grappled with approximately 16,000 vacant properties for decades. Under the Scott Administration, vacant properties throughout Baltimore dropped to the lowest level in more than a decade. Previously, the City invested $7-8 million per year to address vacant properties. At that pace of investment, it would take at least 300 years to solve this problem.

We can’t afford to wait three centuries.

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Our Vision

Mayor Scott’s vision is simple yet powerful: whole neighborhoods are built by whole blocks free of vacant housing, which are built by whole houses. The Scott Administration will eliminate vacant properties in Baltimore City by investing at least $3.0 billion in our neighborhoods over the next 15 years by investing in vacant properties, at scale, and by restoring entire blocks of blighted properties. Our plan is rooted in equity, justice, and righting historical wrongs.

Our Values

  • Centering community voices in development decisions
  • Minimizing displacement
  • Supporting existing homeowners and residents
  • Creating jobs and entrepreneurial opportunities
  • Prioritizing affordable housing 

Our Partners

Mayor Scott knows that for this work to be successful, we must build a coalition to secure the necessary resources for this vision. He convened leaders from Baltimoreans United in Leadership Development (BUILD), the Greater Baltimore Committee (GBC), as well as consultants from Ballard Spahr and PFM to put forward a comprehensive plan that will:

  • Address the vacant properties problem at scale;
  • Rebuild communities;
  • Create thousands of jobs; &
  • Become a national model.

It will take all of us to accomplish this vision. Together, the City of Baltimore, BUILD, and GBC have come to agreement on how to do it. You can read the whole agreement here.

The Work of DHCD

Baltimore City’s Department of Housing and Community Development (DHCD) will lead this work. DHCD is in the process of implementing a Community Development Framework with a “whole block” approach since the beginning of the Scott Administration.

This development strategy is data-driven, community-led, based on deep market knowledge, and leverages all of DHCD’s tools to acquire properties, dispose of properties, provide project financing and lending, code enforcement, demolition, and more

Mayor Scott has already made a historic investment of $146 million into neighborhoods over the past two years, largely with American Rescue Plan Act (ARPA) funding. This historic funding, as well as the work of private developers, has contributed to a nearly 14% reduction in vacant properties since he took office. Which means, this "whole blocks, whole neighborhoods" strategy works.

Vacant-Buildings-Baltimore-City

Now, it’s time to scale up, so that we can solve the challenge of vacant properties once and for all.

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Our Plan

Mayor Scott is poised to make the largest investment ever into Baltimore’s Black neighborhoods. Beginning in 2024, the Scott Administration will:

  • Begin issuing non-contiguous TIF Bonds: The City will issue non-contiguous TIF bonds in tranches using vacant houses across the City. If successful, these TIFs are expected to generate at least $150 million over 15 years. This “Uptown TIF” will be the first time that a TIF has been used in this way in any City in the U.S.
  • Revive the Industrial Development Authority: By resurrecting the dormant Industrial Development Authority (IDA), the City will be able to borrow an additional $150 million that will be repaid by the economic activity generated by restored vacant properties. The IDA was created in the 1980s to help finance the redevelopment of our waterfront, now it will be used to redevelop our neighborhoods.
  • Work with BUILD and the GBC to raise $300 million from private investors and the philanthropic community: The city, alongside GBC and BUILD will generate private and philanthropic investment to help rehab vacant homes, expand homeownership counseling, increase our homeowner repair grants program, and spur economic growth in our neighborhoods.

The $600 million generated from the TIF bonds, IDA and private investment will enable the City to address the most pressing vacant and abandoned properties in East Baltimore, West Baltimore, South Baltimore, and Park Heights.

However, to fully address this issue, we will need support from the State of Maryland. The Scott Administration is seeking:

  • $900 million in funding over 15 years;
  • A new stream of revenue, such as a local share of state sales tax receipts from Baltimore City, which can be used to leverage $1.5 billion over 15 years.

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Mayor’s Scott’s Historic Investment

This $3.0 billion, 15-year investment will fund public investments in more than 30 neighborhoods across East, West, and South Baltimore, as well as Park Heights. Target neighborhoods are outlined in the map below and correlate with areas of high density, as well as those that are historically redlined. Public investments will include:

  • Acquisition: As of December 11, 2023, the City only owns 6.6% of all registered vacant buildings in the City. The City will use some of this $3.0 billion to acquire and rehab vacant properties. 
  • Demolition: Vacant properties that have reached their useful life will be strategically demolished. These decisions will be made in partnership with our neighbors in these communities through DHCD’s block-level planning process.
  • Developer Incentives: Incentives will be provided to trusted developers working in target neighborhoods to rehabilitate vacant properties.
  • Homebuyer Downpayment Grants: These will be paired with Developer Incentives to make rehabbed vacants in target neighborhoods affordable to homeowners at all income levels.
  • Home Repair Grants: Residents that have stuck it out in our historically disinvested neighborhoods deserve to benefit from this historic investment as property value rise and markets are rebuilt. Mayor Scott, DHCD, and its partners will administer home repair grants to residents who live next to and near vacant properties in our target neighborhoods.
  • Infrastructure: Investing in vacant homes is not enough. The City must invest in the streets, sidewalks, and basic amenities of these neighborhoods in order to create thriving communities.
  • Live/Work Incentives: Many vacants in these neighborhoods are zoned for commercial use and can be rehabbed to support our small businesses. There is capital ear-marked for entrepreneurs to create live/work spaces with retail or studio on the first floor, with living space above it.
  • Stabilization: DHCD is able to do significant rehabilitation to vacant properties like replacing roofs and porches, particularly those that are at risk of harming occupied properties. These stabilization investments get properties rehabilitation ready as they go through the Acquisition and Developer Incentive pipeline.

Heat Map with different areas in Baltimore City

Why a local share of the sales tax?

Baltimore is an outlier among peer-cities in that we do not receive a local share of the sales tax.

Of the 124 U.S. cities with 200,000 or more residents:

  • 89% receive a local share of sales tax,
  • 59% receive 2.0% or more.

Baltimore-sales-tax

In addition, Baltimore is only one of three major independent cities in the country, along with St. Louis, MO (5.45% local sales tax share) and Carson City, NV (3.0% local sales tax share). We are the only major independent city that does not receive a share of their sales tax revenue. All other major cities are part of larger counties. This means that Baltimore does not have the ability to draw on the financial resources of a countywide government like most cities do.

While Baltimore’s cultural and tourist attractions bring in millions of visitors to the State annually, and approximately $420 million per year in sales tax revenue for the State, we do not receive a local share of sales tax revenue generated by those attractions.

To comprehensively address Baltimore’s housing crisis, we must be given the same tools that our peer cities have, and that includes a local share of the sales tax.

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What would Baltimore do with 2% of sales tax revenue?

The City would use the local sales tax revenue to address Baltimore’s housing crisis. Each percent of sales tax allocated to Baltimore City would bring in more than $70 million annually.

2% of local sales tax would pay for:

  • Debt service on $1.5 Billion in City GO bonds for our vacant properties program;
  • A $1,000-per-home annual property tax cut for homeowners; &
  • $10 Million in annual support for renters.

What would a $1,000 annual property tax cut do for our property tax rate?

A $1,000 tax cut on all owner-occupied properties in Baltimore City would provide a greater percentage of relief for lower-assed properties, and would bring the new effective tax rate to 1.3% or lower for half of the City’s owner-occupied properties.

The proposed property tax reduction would make the total burden of homeownership one of the lowest in the State for most of Baltimore’s owner-occupied homes.  Properties valued at less than $50,000 would have their property tax eliminated.

Baltimore tax assessed value

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Additional Information

More Materials About This Plan

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