Baltimore City Council’s affordable housing funding fix races ahead

A bill correcting an error in a Baltimore law speeds ahead as the city council aims to approve legislation before the mistake costs the Affordable Housing Trust Fund millions.

The Taxation, Finance and Economic Development Committee, according to the Baltimore City Council’s website, recommended on Thursday approving a corrective bill. The modifying legislation, introduced on Feb. 4, amends tax rates used to calculate the Yield Excise Tax in the so-called “Fund the Trust Act” signed by Mayor Catherine Pugh in December.

“It doesn’t happen that often. (Errors in bills are) to be expected,” said Lester Davis, a spokesman for City Council President Bernard C. “Jack” Young.

Currently there are four city employees drafting legislation, he said. Baltimore’s Department of Legislative Reference Director Avery Aisenstark along with three other city employees write council bills.

There’s about 40 city council meetings per calendar year, Davis said, and he called the current staffing level appropriate. The council, according to online records, took action on 371 individual bills in 2018. A substantial number of those items, however, were not complex legislation.

Items the council took action on last year included 108 executive nominations, 67 resolutions with no legal impact, and 15 bills enabling legislative oversight actions, such as requesting the appearance of the police commissioner before the council.

To prevent the flaw from costing the Affordable Housing Trust Fund $3 million the full city council must vote in favor of the modification bill twice, and the mayor must sign it, within 90 days of the law going into effect. Pugh signed the bill into law in a ceremony at City Hall on Dec. 12, and it took effect 30 days later.

The bill raised the city’s transfer tax .6 percent and recordation tax .15 percent on property sales of more than $1 million. By increasing those taxes officials expected to generate $13 million for the Affordable Housing Trust Fund.

Activists who backed the funding law revealed in January an error in the law’s wording. The mistake limited tax increases to “the amount collected” on each tax. As a result Baltimore only collects $105 on the sale of a $1 million property as opposed to $7,500.

Baltimore voters in 2016 overwhelmingly approved a charter amendment to create an affordable housing trust fund. But that amendment did not include a dedicated funding source.

During the next two years advocates fought with city elected officials to secure a revenue stream. Last April Councilman John Bullock introduced a bill raising the city’s transfer and recordation taxes to subsidize the fund.

After protracted negotiations Pugh and activists reached a deal this summer. Under the agreement the council amended the Fund the Trust Act to reduce the tax increases, and Pugh said she would make up the difference with additional city funds.