This story has been updated.

Mayor Brandon Scott announced Monday he will remove the vast majority of owner-occupied properties from Baltimore City’s tax sale list, after housing advocates demanded a clear-cut plan as the annual event’s May 17 date nears.

“Today's announcement is about being targeted and strategic in our approach to protect legacy homeowners and center equity,” Scott said at a news conference, after WYPR broke the news of his plan. “This is also about taking the action we can take now, not simply just kicking the can down the road.”

The administration’s decision comes after a significant deadline passed on Friday, the last day property owners had to pay outstanding liens owed the city to avoid tax sale. Owner-occupied properties wind up on tax sale, an annual event where the city recovers unpaid liens by auctioning them off to third-party investors for debts as little as $750.

Scott also said that more change to the sale is coming.

“I remain committed to further reforms of this system. My administration will also pursue local and state policy changes that will give the city more local control over the tax sale process,” he said.

Housing advocates have called on Scott to announce a change to the sale since he was inaugurated in December, arguing that the ongoing financial impact of the coronavirus pandemic put even more Baltimoreans than usual at risk of losing their homes to predatory investors. Some, such as Nneka N’namdi of Fight Blight Bmore, called for the sale to be cancelled altogether. Others, including Councilwoman Odette Ramos and Council President Nick Mosby, pushed for it to be delayed.

Scott said during his first State of the City address in mid-March that he would take “every possible step” to ensure that no one would lose their homes to tax sale. As the weeks ticked by, advocates and those on the tax sale list pushed the Democrat to issue a concrete plan.

The city does not keep demographic data on who is affected by tax sales, but data collected by Pro Bono Resource Center and Maryland Volunteer Lawyers Service, organizations that provide legal counsel for those facing tax sale, paint a bleak picture of inequity.

Of those who attended the organizations’ 2020 tax sale clinics, 72% were seniors, 48% were disabled and 85% were Black. Nearly three-fourths reported annual household incomes of less than $30,000. Attendees owned their homes for an average of 24 years; nearly 75% of them did not have a mortgage.

Investors may charge property owners 12% in interest on the liens they purchased from the city, which can morph into sums thousands of dollars beyond their initial balance due to legal fees. If the debts remain unpaid, investors may foreclose on those properties.

Deputy City Administrator Daniel Ramos said the Finance Department will determine which homes to remove by requesting the IT department create a list of owner-occupied homes that are currently headed for tax sale.

Bureau of Revenue Collections employees will use that data to cull homes from the final list. The exception is owner-occupied properties with overdue property tax bills from 2017 or earlier — by state law, Baltimore must send properties that have been in tax arrears for four years or longer to tax sale.

Ramos described the number of these homes as “very small” but did not have a specific figure available.

The Scott administration hopes to officially remove all owner-occupied properties by May 12; they will have finished the job by the sale date, May 17. Homeowners are not likely to be individually notified that they’ve been removed from the sale.

Ramos and other mayoral staffers characterized the administration’s plan as an attempt to protect vulnerable homeowners while recovering outstanding liens attached to non-owner occupied homes.

Revenue from the annual event is factored into the city budget; by law, the city’s fiscal year end balance cannot have a deficit, meaning the administration will have to account for any gaps caused by the removal of the owner-occupied homes by July 1. Last year’s sale netted $15.2 million.

Though the city is due to receive $670 million in federal relief money from the American Rescue Plan Act, the money cannot be used to supplant tax revenue, including outstanding property tax bills.

The administration is considering dipping into the city’s rainy day fund or cobbling together other federal or state grants to close any potential gaps. Baltimore has already held one tax sale this fiscal year: former Mayor Jack Young delayed the 2020 sale from May to July.

Council President Mosby praised Scott’s decision, saying in a statement that the council is committed to working with the administration “to build on this progress and address other matters of equity.”

“Rather than destabilize our families and communities through this annual tax sale, we must find ways to protect our homeowners and help them build generational wealth,” he said.

Comptroller Bill Henry called it an important step in ensuring families affected by the pandemic retain their homes and build equity for the future.

“At the same time, the city needs to face the reality that we will never be recouping some of these taxes and fees. We should explore every avenue to get these liens off the books entirely and, if possible, lean on the American Rescue Plan for support,” he said.

Councilwoman Odette Ramos, a housing advocate who led the council’s calls to delay this year’s sale, said she was thrilled by the administration’s decision.

“During the past two weeks, advocates and volunteers raised over $80,000 which helped 65 homeowners, 22 of which were in my district. We worked out several accounting issues as well,” she said.

But when Friday’s payment deadline passed, Ramos said she was heartbroken that they did not get to everyone. Still, the Scott administration’s plan means their efforts, “both these past two weeks and over the years we’ve been working on this issue, were not in vain,” she added.

Margaret Henn, the Director of Program Management at the Maryland Volunteer Lawyers Service, said she and her clients are greatly relieved by Scott’s announcement. Still, she said, she wishes he had made it sooner.

“He announced in his State of the City address back in March that he was going to do something to help people in tax sale, but then nobody knew what it was until today,” she said. “So that definitely created a lot of a lot of stress and anxiety for a lot of people. So it's unfortunate that we didn't find out about it until today, but it's also fortunate that this is happening.”

Finance Director Henry Raymond said that waiting to announce the plan after the April 30 deadline was necessary.

“This is a very complex issue that affects the revenue of the city,” he said. “But more importantly, we want to protect the financially fragile citizens of our city. And it's a matter of time in order to develop the strategy. And that's what led to this timeline.”

Nneka N’namdi and John Kern, co-creators of the Stop Oppressive Seizures fund, a grassroots effort that paid down the liens of more than 60 homeowners this year, said Scott’s announcement is a “first step in responsiveness” but misses the mark.

“The annual tax sale is a practice rooted in institutional racism that continues to destabilize homeownership in the city, displace people from their homes, create more vacancy, and further strip Black Baltimoreans of their wealth,” they said in a statement. “Without more details on the long term plans to stop this predatory practice in its entirety, an assessment of the potential impact cannot be determined.”

Henn, N’namdi, Kern and other housing advocates are still concerned for those who live in homes with cloudy titles.

Of those who attended MVLS and Pro Bono Resource Center’s 2020 tax sale clinics, 17% did not have the deed to the homes they live in. This usually happens when a homeowner dies, but outstanding liens prevent their heirs from recording a new deed. These residents are not considered to live in owner-occupied homes.

And they are locked out of benefits that could otherwise keep them off the list, like the Homestead Tax Credit, Henn said. “They're really in a very tricky situation and left out of a lot of programs that other people have access to. So it's a major concern for us.”

Kern and N’namdi echoed her worry.

“Solely removing new homeowners from the city’s annual auction does not fully address the deeply harmful and multigenerational impact of the tax sale on Baltimore City’s most precious homeowners,” they said. “The S.O.S. Fund and other community partners stand by its determination that all owner-occupied homes (including those with tangled titles) be removed from tax sale, and we reassert creating a competent community-informed and advocate-led process for uprooting the inequities baked into the current tax collection system.”

Raymond, the city’s finance director, said his department will review cloudy titles on a case by case basis and study the results of this year’s sale to determine what other steps need to be made in the future.

Scott added that his administration is working on initiatives to keep those with cloudy deeds in their homes that he cannot yet discuss.

“They are going to be things that we can't go into right now to make sure that we're protecting those people,” he said.

Residents experiencing issues related to the tax sale may call 410-396-3556 to be connected with a member of the Bureau of Revenue Collections.