Study Examines Cuyahoga County Property Tax Lien Sales
When a homeowner isn’t paying property taxes, the county has a few options. It can try to collect the money, set up a payment plan, or foreclose on the home.
It can also turn to a private investor. Under this arrangement, the investor pays the county the money it wasn’t receiving from the homeowner. In exchange, the investor tries to collect the unpaid taxes for itself—with interest.
It’s called a tax lien certificate, and the county has sold thousands of them to a company called Woods Cove.
A recent study by the nonprofit Thriving Communities Institute and a consortium of public officials, housing advocates and others looked at 6,600 of these properties, and found taxpayers paid off debts on 38 percent of them.
But on more than 2,000, Woods Cove has filed foreclosures—and has taken possession of hundreds.
Frank Ford is a researcher who worked on the study. He found that hundreds of these tax delinquent homes are likely vacant.
"On the good side, you could say selling the tax liens gets the money to the county up front," Ford said. "But on the back end, if it results in vacant, abandoned, distressed property, what that does is, every vacant property undermines the value of the properties near it."
Last year, the NAACP asked the county to freeze its selling of tax liens. The study suggests the practice disproportionately affects African-American communities.
Cuyahoga County Executive Armond Budish said he has received the study and will soon appoint someone to review it and make recommendations--as well as take on broader county housing issues.
“We still have a tremendous issue of blight, we have many foreclosures, abandoned homes," Budish said. "We have many communities that are suffering greatly.”
Company officials did not respond to several phone calls and emails requesting comment. But in a letter to the county treasurer earlier this year, the president of one company connected to Woods Cove wrote they are making an effort to maintain homes they own, and are rehabilitating some to resell.