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What Baltimore’s TIF will mean for city residents

Vacant housing in Baltimore on October 2, 2024. Photo by Rachel Baye/WYPR.
Rachel Baye
/
WYPR
Vacant housing in Baltimore on October 2, 2024.

City officials are calling their latest plan to tackle Baltimore’s vacant housing crisis the first of its kind in the nation. Recently, the City Council passed a special financing package aimed at addressing blight on a large scale. If successful, it could help transform thousands of vacant homes and abandoned lots, creating a pathway to affordable housing across the city.

At the core of this effort is Tax Increment Financing (TIF), a tool commonly used by local governments to spur economic development. Here’s how it works: the government issues bonds to fund improvements in a designated area. Over time, the property taxes generated by the new development repay those bonds.

But in Baltimore, a city with just under 13,000 vacant properties, most of them residential, the traditional TIF model doesn’t perfectly fit.

“A taxing district used to mean that you’d need approval from 51% of the neighbors,” said developer and philanthropist, Joe Meyerhoff. “You know how many tax districts have been formed this way? Zero. If you're a homeowner, why would you sign up to have to pay more taxes for something you don’t know anything about?”

Meyerhoff, who is related to Joseph Meyerhoff, the namesake of the Meyerhoff Symphony Hall, saw an opportunity to rethink the way TIFs could work. What if the entire city could be considered a special taxing district? This would allow for development to happen throughout Baltimore, rather than being confined to one part of the city.

After meetings with the city’s Housing Commissioner and Finance Director, the concept of a non-contiguous bond became law. During the bill’s signing, Mayor Brandon Scott called the approach innovative and an answer for underserved neighborhoods, noting that TIFs have historically worked in more affluent areas like downtown but never in uptown.

Now, the Chief Finance Director, Michael Mocksten, sees the TIF as an opportunity to create affordable housing across Baltimore.

“The TIF requires, among other things, that the money is spent on houses that are affordable for families earning up to 110% of the area’s median income,” Mocksten said. “The goal, as set by the legislation, is to eventually lower that to 60%. In short, the TIF brings good, affordable houses back onto the market, making them available for people making between $45,000 and $60,000 a year.”

The TIF ordinance allows the City Council to sell bonds up to $65 million to fund these redevelopment efforts. The first tranche of bonds is expected to be issued by the summer of 2025, and once the bonds are sold, funds will be directed toward improving properties in the TIF district.

“If an address is included in the legislation, it may be eligible for TIF funds,” said Tammy Hawley, a spokesperson for the Department of Housing and Community Development (DHCD). “Many of these addresses already feature rehabbed properties, and the increase in property tax assessments from these homes will be used to support the first sale of bonds,” Hawley said.

For residents, the TIF represents more than just a financial model — it’s an opportunity to revitalize neighborhoods, provide affordable housing, and boost the local economy, said Housing Commissioner, Alice Kennedy.

During a Fall tour Kennedy showed WYPR a block on Fulton Avenue, where blighted row houses overlook a construction site. What was once Westside Elementary will soon become the Parkview Recreation Center. Kennedy explained that these decaying homes would soon be transformed, much like a section of Upton, which has already seen revitalization with new row houses and community spaces offering gardens and zen areas.

“We’re making a real difference in the neighborhoods that need it the most,” Kennedy said, reflecting on the city’s progress. “In a year from now, these areas will not just be a better place to live — they’ll be a better place to call home.”

Mocksten, the Chief Financial Director, agreed saying that the future of housing in the city will include thousands of mini- ribbon cuttings.

Wambui Kamau is a General Assignment Reporter for WYPR. @WkThee
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