STONINGTON — The economy has been slowly picking up steam, say economists, and even the housing market is showing some modest signs of recovery, according to Maine State Economist Amanda Rector, with both values and sales activity growing.
If both are true, then why is Stonington is wrestling with a growing number of property owners who are losing their land and building for nonpayment of property taxes?
The town recently moved to acquire nine properties whose owners owed, collectively, $43,000 in back taxes. Presumably, those owners would rather sell their buildings and land to gain some money, even if that little left after paying off the taxes.
The nine properties acquired by the town is more than triple the number it usually has to acquire and unload, say town officials. And those are just the most egregious tax offenders, said Selectman Evelyn Duncan.
“We’ve had increasing numbers of people who have not paid their taxes or are late on their taxes, more than we are used to seeing,” Duncan said.
Under state law, a lien is filed against the property owner for nonpayment, and after a prescribed amount of time, the lien matures and the town is able to seize the property. Most municipalities go to great lengths to avoid finally seizing ownership, often allowing the owner to retain the property by paying the taxes and the legal costs incurred by the town in placing the lien. But once the town puts the property out to bid, there is no turning back.
Stonington’s economy is holding its own, but that doesn’t mean it has fully recovered from the Great Recession, according to townspeople interviewed. The town economy relies heavily on lobstering, and lobster landings have been good and prices in 2013 at least better than 2012.
But building permit applications are still significantly down from pre-bubble days, and there are a lot of “For Sale” signs around town. Population growth also remains flat, Duncan said.
The local housing market hasn’t rebounded as quickly as the national real estate market, says Jeff Allen, a realtor with Downeast Properties. Housing sales along the Blue Hill Peninsula are up, but it’s not the same level of recovery as in other parts of the country, he said.
“I’m reading about nationwide markets recovering,” Allen said. “Things in Maine, especially in rural areas of Maine, take time.”
Locally, it’s a buyer’s market, with lots of good housing stock to be had at relatively low prices.
Rhonda Mitchell, a Realtor with the Island Agency, says many of the homes she’s selling are second homes for out-of-staters. There are plenty of those to be had on the market without having to go for the more challenging properties being acquired by the town.
“A lot of the properties you’re seeing [being acquired by the town] are raw land, and raw land is a very tough sell right now,” Mitchell said.
Still, even in a poor market, it would seem that someone behind on payments would find a way to sell the property, even if for dimes on the dollar. But it’s not as simple as that, says Selectman Donna Brewer.
Several of the properties have essentially been abandoned by the owner’s family members, which makes getting the necessary signatures to sell difficult. A few more are owned by out-of-state habitual tax delinquents, said Brewer, and they usually pay just enough to keep the property in their possession.
“It’s a game they play,” she said. “It’s very frustrating.”
But with more people falling behind on taxes owed, the town has taken a more aggressive line to try and get habitual offenders to pay up or lose the property. It sounds good in theory, but it’s tougher in practice, as the town has to carefully follow strict rules of due process. That process costs the town a lot of money, and isn’t always successful.
In April, Stonington officials had to relinquish control of two properties rather than face a prolonged court battle over a procedural question.
“It was going to cost more to go to court and pay the lawyers,” Brewer said. “It made me sick to my stomach to sign off on these deeds.”
What most frustrates town officials about the property tax dodgers is that tax-paying residents have to shoulder more than their fair share of the tax burden. The town is willing to work with residents to try and find a solution to keep them in their homes, especially when it comes to elderly residents or those going through a patch of hard luck.
Seeing the determination that some Stonington residents show to pay their taxes on time makes Brewer more determined than ever to find a way to make chronic offenders pay their bills.
“We will have some elderly residents who will go without to pay their taxes,” Brewer said. “We try and seek them out to work with them.”
But there aren’t any easy answers and so the town finds itself in the unlikely role of real estate agent, a situation it wanted to avoid, says Duncan.
“We’d rather have the money,” Duncan said. “We don’t want the property.”