A statewide bill that would extend more protections to Maryland households facing foreclosures and evictions due to tax sale has generated backlash from more than two dozen community groups that say the bill as written could backfire.

The bill, introduced at the request of the state housing department, advanced Tuesday out of the Maryland House of Delegates and has been referred to the state Senate for review.

The proposal aims to apply some tax sale safeguards that exist in Baltimore to the rest of Maryland, requiring tax collectors to withhold properties from sale where the taxes owed — including penalties and fees — are $250 or less. Properties owned by religious groups or organizations that are delinquent only on water and sewer charges and owner-occupied properties with unpaid balances of $1,000 or less would also be withheld.

But the bill has been amended to include a measure that would enable homes that are not “legally” recognized as owner-occupied to be included in the tax sale list over unpaid water and sewer charges. A coalition of 30 community groups has organized to oppose the bill, saying the penalty could be unfairly applied to renters without formal leases whose landlords have failed to pay bills, or heirs who are struggling to untangle the title to a home but may be living there.

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The annual tax sale, which occurs in several counties and municipalities across Maryland, allows buyers to purchase outstanding tax liens on properties. Homes with purchased liens can then be foreclosed upon if the homeowner fails to pay back the lien holder with fees and interest by the scheduled tax sale date. In Baltimore, a Banner investigation found that tax liens have been sold on tens of thousands of homes, sometimes due to missed payments worth just a few hundred dollars, and homes in predominantly Black neighborhoods are more likely to be affected.

Investors have made tens of millions of dollars from Baltimore’s tax sale system since 2016, the Banner’s analysis found. The city’s water billing system, which has a history of problems processing payments and overcharging users, motivated the passage of a 2019 law that exempted owner-occupied homes from tax sale for unpaid water bills.

City Councilwoman Odette Ramos initially supported the bill if it included an amendment protecting renters and other occupants from tax sale due to water and sewer bills. The current version of the bill takes the city backwards, she said, and “will harm tenants.”

“We will start to have foreclosures in Baltimore City because water bills have been included, and that’s going to be another reason that people are getting evicted,” she said in a Tuesday interview.

Mayor Brandon Scott, who also supported the bill with Ramos’ amendment, said in a statement Tuesday that his administration is working to secure “the necessary protections for owner-occupied homes and renters” in the final version, “while also balancing the fiscal needs of the city.”

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“As a statewide bill, the impact on Baltimore City would potentially be significantly different here than in other jurisdictions,” the mayor said in a statement.

Baltimore has one of the highest concentrations of renters in Maryland, and many have informal arrangements with housing providers outside of legal leases. Others might have leases and be current on what they owe on water and utility bills, but might find themselves in situations where their landlords or housing service providers aren’t paying the bills on time.

Still others might have relatives or loved ones who informally passed on their houses when they died or moved away and could be in the process of untangling the property title, Ramos said. In the meantime, they might not be receiving notices about their tax bills, which could be in the deed holder’s name.

In a statement from the Maryland Department of Housing and Community Development — whose secretary, Jake Day, testified in support of the measure — agency officials said housing stability represents a core tenet of their work.

“Crucially, this proposed legislation expands protections that already exist in Baltimore City to the 2,700 homeowners statewide who face tax sale foreclosure each year on average,” the statement said. It did not acknowledge questions from The Banner about the impact of the proposed amendment on renters and property heirs.

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Supporters of the legislation, which include those who represent tax sale investors, say the measure is “common sense” and will not only protect owner-occupied households but also clamp down on negligent property owners with blighted and abandoned homes.

Mary Grant, with Food & Water Watch, an advocacy organization that has opposed the bill, said the legislation would have a disparate impact on people of color and those from low-income households, who are more likely to rent their homes or live in places informally.

“This language is discriminatory,” she said. “And we don’t want renters to not have the same protections, or folks without the title, to not have the same protections [as homeowners].”

On Tuesday, Food & Water Watch Southern Region Director Jorge Aguilar called on state senators to reject the bill.

“It should be obvious that no one should lose their home or get evicted over a water bill,” Aguilar said in a statement. “The legislature is putting thousands of families at risk.”

State Del. Regina Boyce, a Baltimore Democrat whose tax sale bill has been folded into the housing department’s version, declined an interview request. Boyce’s bill contained the contested amendment.