Landlords under fire for skirting taxes

City officials expressed hope last night that the state could help crack down on shifty landlords who routinely wriggle out of paying additional taxes on their properties by disguising them as primary residences. Because of tax breaks available to residents who live in homes rather than rent them out, the city has heralded legislation introduced by state Sen. Jim Rosapepe (D-Prince George's and Anne Arundel) as a tactic to cut down on increasing numbers of single family homes downtown being converted to student housing. Officials have long complained landlords abuse the tax breaks by posing as single families using the breaks to buy up properties for higher prices than real single families can afford. The legislation is aimed at tightening state audit procedures that would ensure the homeowner actually lives on the property. Too many landlords have slipped through the cracks, city officials said, in a state system that doesn't conduct audits nearly enough. "Through oversight or fraud, there are suspected to be a significant number of rental properties" that are listed as owner-occupied, city documents show, and city officials say the tax rolls are depleted as a result. In the past, the city's actions were essentially limited to sending a list of rentals to the state four times a year to compare with its database and keep owners from listing two primary residences when one is actually a rental. City code enforcement officers also routinely patrol neighborhoods looking for extra cars parked on the grass and overflowing trash cans as some signs of overcrowding and a possible unlisted rental needing investigation. But recently, the city began using another branch of the government to check on rentals' statuses: comparing rental listings to state Motor Vehicle Administration information. "We're essentially doing the work of a computer database," said Bob Ryan, the city's director of public services. "If anybody knows any state legislators and can pressure them to [implement automated systems], feel free." But District 2 City Councilman Bob Catlin said he's been talking with the area's state legislators, and there's no need to pressure them on anything, because they believe added profits a more efficient system would rake in from more tax evasion and fraud convictions are worth the money it would cost to implement it. "I think there's light at the end of the tunnel here," Catlin said. "I think it should be a go." Even if a new, computerized system is put into place, though, Ryan said identifying which residences are rented will always be difficult. "There are some nuances," he said. "If you buy a house and your son or daughter lives there, and a few of their friends live there, we run into some problems if that's a rental." Ryan called on the community and residents to spot overcrowding and report it to the city after checking the city's database of known rentals on its website - another new weapon to fight illegal renting, updated every two weeks - and it seems the problem is so prevalent that some council members said they had a number of suspicious addresses to report last night. In addition to a few other individual houses, Catlin accused Parkside Apartments owners of skipping out on extra taxes because they reported only 34 of the more than 100 units in the Lakeland Road building as rentals. "It seems like that whole building is a disaster," he said. District 1 Councilman John Krouse said that when the city distributes letters to new owners, asking if they are renting or not, it should do it years later as well. In his neighborhood, Krouse said, landlords buy old, dilapidated houses and live in them while they fix them up in an attempt to make more money. "It just strikes me, because I've seen it before," Krouse said, "where someone comes in, buys the house, fixes it up, gets it ready to go, and it's a rental in two years." Contact reporter Mike Silvestri at silvestridbk@gmail.com.