Equitable, efficient, effective property taxes stabilize & revitalize places

With property taxes accounting for up to 75 percent of local government revenue, everything depends on getting them right.

It’s the pool of funds we depend upon to support everything from infrastructure to schools to trash pick-up. And, according to Sara Toering, the Center for Community Progress’s general counsel, property tax problems are a root cause of “every aspect of distress in a given neighborhood,” from vacancy to poor public health to crime.

That’s why Toering is advocating for equitable, efficient and effective property tax programs. Toering will be talking about tax foreclosure reform at Community Progress’s Reclaiming Vacant Properties conference in Detroit this week.

Most property tax systems were designed decades ago. Misguided attempts to improve effectiveness also thwart city hall’s best intentions. Cash-strapped governments increasingly try to make their budgets by selling portfolios of delinquent tax liens in bulk to private third parties. “In our experience throughout the country,” Toering says, this process “ends up causing a whole new level of problems.”

That’s because the bundles of tax liens include the lowest-valued vacant and abandoned properties alongside higher-value properties that are likely to be snapped up. Private buyers have an interest in foreclosing on high-value properties, because they are most likely to be redeemed and make money. Meanwhile, the vacant and abandoned properties that the buyers also purchased sit in limbo, festering and forgotten, low on the priority list for the buyer and actively harming the community.

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