Tuesday, December 12, 2006

The Rich Ejecting the Poor: Gentrification in Baltimore

The Baltimore Sun is currently running a three-part series about "Baltimore's arcane system of ground rents ... a vestige of colonial[ism]" in Maryland. Parts 1 and 2 of On Shaky Ground have already been published, and detail how rising property values in Baltimore have lead a handful of wealthy investors, lawyers and real estate agents to seize houses from their owners for debts as little as $84. Since the arcane laws allow ground rent holders to add $1,500 in legal fees (there was no cap on the fees before 2003) when they sue home owners in "ejectment" proceedings, homeowners can be faced in court with an unpayable fine twenty times more then they originally owed in unpaid ground rent payments. If the homeowner does not pay the additional fees and unpaid ground rent, they can lose their homes in the legal proceedings. Over 500 homeowners have lost their properties in Baltimore in recent years from such lawsuits.

The Sun pieces recognize that these proceedings are part of a "gentrifying" process in Baltimore, and mention that many of these same ground-rent-holding entities also buy up tax liens and sue property owners for their properties over unpaid taxes. A previous set of articles on homeless teenagers in Baltimore City public schools included the case of a young Gary Sells who was made homeless when his house was confiscated over hundreds of dollars in unpaid taxes that he was not aware of. He found out when uniformed officials came to the door of the house his family had owned for over 30 years to tell the residents that they were now trespassing on what had been their family's home.

While legal, these procedures by which wealthy professionals take the homes out from under poor or working families by way of legalistic con games and anachronistic laws is clearly immoral. The lawyers and real estate developers interviewed by the Sun who exploit the ground rents for a living argued that they were just making an honest living. One said "you can make a lot of money doing this, but you have to be ruthless." Another explained that the process was justified, and the only reform needed was a raise in the amount of fees that could be tacked on to unpaid ground rent at ejectment proceedings.

The problem is that the people seizing poor peoples' homes over small sums of unpaid archaic ground rent are right. What they are doing is perfectly ethical within the logic of capitalism "in a business where somebody else has to lose in order for you to gain."

Indeed, this is the most nefarious side of that double-edged sword called gentrification. While I have long argued that the process should be easier for people looking for housing to seize properties from negligent landlords who allow their properties to crumble without paying any upkeep or taxes, it is evil to use that logic to make families homeless. Indeed, this process of kicking out marginalized people, which in this town that usually means poor or working-class black people, in neighborhoods like Patterson Park that have become desirable to wealthier (and whiter) people is the inverse of the Blockbusting phenomenon of the 1950's and 1960's. In those days, the spectre of invading black families was used to scare white families into selling their houses below market value to exploitative real estate firms. Due to the dual housing market at the time, those real estate firms could sell the homes to black families at prices above the previous market value that white families had paid for the homes.

The fact that this process works just as well in reverse shows that the problem neither is nor was the white families or the black families moving from one area to another. Rather, speculative capitalists exploit the real estate market in any way possible to make what one of the ground rent owners in the Sun story calls "windfall profits." Like the brothers said on that Grand Master Flash song "The Message" , "Its all about the money, ain't a damn thing funny." The legal and cultural establishment of the United States values greed and views community solidarity with suspicion if not outright contempt.

The third installment of the Sun piece is supposed to suggests reforms to the ground rent system to prevent its abuse. But there are other methods in addition to legislative changes that people could use to defend themselves. First of all, if homeowners had legal resources (like pro-bono laywers) they could successfully challenge much of the home seizure attempts with legal arguments that the ground rent owner never honestly tried to collect the rent before going to court. More importantnly, the community could organize to defend the homes of families who face eviction.

During the great depression whole communities would confront sheriffs executing an eviction proceeding, either refusing to let him pass or taking the personal items of the evicted from the street in front of the house back inside through a back door. Unfortunately the high rates of addiction and incarceration in the community, the persistent intra-community violence and the distrust that this violence sows among neighbors make me think that the legislative route may be easier. Though without the organizational capacity to follow-up on the effects of any reforms, such changes may be only temporarily effective.


The Cybrarian said...

Jeziz can you imagine families and neighbors in Baltimore fending off evictors with burning torches?

Actually I CAN-- that's probably the real reason why they don't notify people!

It is really screwed up.
Always a good idea to do a property search on a house before you buy it!

Emptyman said...

You're a dumbass.

Your paraphrase of "colonial Maryland" as "colonialism in Maryland" is blatantly incorrect. The two phrasings have neither the same meaning nor the same intent. It is a vestige of English common law, but most of the ground rents in question were created long after Maryland had ceased to be a colony.

People who can't afford an attorney can get pro bono attorneys to represent them in ejectment proceedings. The problem is that osme people claim that they don't know an action in ejectment has been brought. Such an action cannot ensue until notices have gone out over the course of a year or more. Therefore, I don't understand how people can be unaware that there is an action pending unless they wilfully refuse to look at their mail.

I agree that ground rents are silly and archaic but there is a law which allows you to buy back your ground rent from the holder even if the holder doesn't want to sell, at a pre-ordained (and pretty low) price.

Moreover losing a house because you didn't pay your taxes has nothing at all in common with losing a house because you didn't pay your ground rent. I can understand why you might not know you owe a ground rent if you inherit a house (although it says so on your deed, and moreover of course you get a notice if you miss a payment.) If you don't know that you have to pay property taxes, you're an idiot.

Lastly, gentrification has led to houses in formerly blighted neighborhoods in Baltimore City becoming more valuable than houses in nice, stable suburbs. Therefore people who have little money but are fortunate to own a house in a gentrified neighborhood can sell their house, reap a huge profit, and move to a place with better schools and less crime.

Gentrification has increased the tax rolls of Baltimore City. Thus there is more money for the city to use to help those neighborhoods which have not seen an increase in property values. The affluent, mostly white homeowners who have moved into the gentrified neighborhoods are still a distinct minority in the city, meaning that the political decisions on what to do with all that extra tax money are still made by people who are elected by the less affluent, mostly black citizens who make up the majority of the city's population.

By State law, there is a cap on how much one's property tax assessment can go up in a given year, so a long-time resident in a gentrifying community is not necessarily forced to sell the house due to rising property values -- and the presence of affluent homeowners in the neighborhood brings improved educational and economic opportunities to that neighborhood.

Ground rents can be abused and gentrification is not an unmitigated good... but neither are the obvious evils your article suggests.

Saimon Fitzyerald said...

thanks emptyman, I'm a "dumbass." Thank you for your cogent analysis.

In closing, gentrification is a double-edged sword, welcome to the flip side of the blade.