Monday, February 28, 2011

Landlocked by locked land

My estate in Pittsburgh is partly surrounded (errr ... bordered by) land which stands as a pristine testament to poor governance, a pertinent topic now that I'm reading Atlas Shrugged.

Five consecutive overgrown lots stand all tax-delinquent and unused. I would buy them except that they are locked up by back taxes at a level far above the value of the land. One could blame the owners for letting things go to pot, but I would prefer to blame the city government for over-assessing the taxable value of this land, which I'm sure contributes to it's unsellablility with or without back taxes.

In recent years the city started some programs that help it to correct its foolishness. In some cases buyers can obtain abandoned land through treasurer's sales with forgiveness on the back-taxes. This is a smart move for the city, as it moves land back into the hands of those who will pay property tax to it, and it is profitable for buyers.

But this is just the start of it. The city shot herself in the foot (never mind anti-gun laws) when she sold $64 million in tax liens on properties all across the city. The buyer of a tax lien has specials powers backed by the court: a lien holder demands to be paid the full balance of the back taxes prior to the transfer of any of the deeds it holds under lien.

Once the city has sold a lien to a private corporation, it has no power to return the land to the [tax-unburdened] free market without buying back the lien from the private holder at up to the full back-taxes price, which grows in the interim due to interest and penalties.

The issue appears to be heating up, with at least two recent news articles (national news and local news) devoted to the topic. Both articles quote Aggie Brose, the venerable 35-year community activist of Garfield, Pittsburgh.

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