![]() ![]() “My view is that the sale of a tax lien or tax certificate, instead of selling the property, rarely is to the benefit of the local government or the neighborhood,” Alexander said. But that city’s struggles with vacancy and urban blight are no less great than Philadelphia’s.įrank Alexander says that selling the right to collect delinquent taxes is generally good for treasurers’ offices because it keeps revenue rolling in, but that it can undercut cities’ priorities in other areas. In Baltimore, where liens on all delinquent properties are sold to private collectors on a strict schedule and no payment plans are offered, the collection rate hovers around 99 percent. Selling tax debts to private third-party collectors is among the most common tools used by cities and states to keep delinquency rates low, but it comes at a cost. Last year, he said, more than half the posted delinquent tax bills were paid prior to the lien sale.įranklin County Treasurer Ed Leonard says his office also goes to great lengths to remove liens from the bundle prior to auctions that are owned by elderly, low-income homeowners, as well as from other properties such as churches. ![]() Eric Sells, delinquent tax division supervisor for Franklin County, said the Treasurer’s Office collects roughly the same amount of money from the threat of the sale as it does from the sale itself. The County Treasurer packages delinquent tax bills into portfolios, and sells those bundles to the bidder who offers the lowest interest rate. In Franklin County, home of Columbus, tax liens are sold in bulk. ![]() It also performs a biannual “scavenger sale,” in which purchasers may obtain the title to properties which have delinquent tax bills in at least two of the previous 20 years. This is simply a way for the county to outsource the collection of delinquent taxes and keep a reliable source of revenue. Cook County, home to Chicago, performs a yearly judgment sale in which it sells individual tax liens to qualified buyers looking to make a buck on newly delinquent tax bills. Many cities, like Columbus, Ohio, and Chicago, routinely conduct tax lien certificate sales, in which private investors bid for the right to collect past-due taxes directly from property owners. To do so, they use a variety of tools, to varying degrees of success. Other cities have found ways to keep delinquency rates low without putting low-income homeowners on the street. As it turns out, though, that emphasis is misplaced: the bulk of our city’s tax debt is owed not by struggling homeowners but by investors. Philadelphia’s emphasis on the latter of those three goals-a well-meaning reluctance to foreclose on struggling homeowners-has contributed to a system that is both inefficient and ineffective, as Alexander would put it. “The goal is to have an efficient and effective and equitable system of property tax enforcement.” ![]() “Speaking from the national perspective, I think there are three key elements of this problem,” says Frank Alexander, co-founder of the Center for Community Progress, a national organization working to resolve the problems of vacancy and blight. The problem is not unique, but other major cities fail to solve it on fewer levels than Philadelphia. In many ways, and for many years, Philadelphia has failed to implement a practical and effective strategy for collecting delinquent property taxes and putting vacant land and blighted buildings into productive use. ![]()
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