The question should be ‘What could they do with more tax revenue?’

Today’s Episode is taken from host Scott Graves ‘Are We Here Yet? substack of January 2, 2026.  The following is a transcript

Our city completed a round of dispossessing themselves of properties they own this past November. These properties were acquired sometime in the past because their last owners failed to pay their property taxes, were abandoned after the death of an owner or other reasons. Our director of planning alluded to more than 220 such properties in our city of 16,500 people during our recent podcast. The city then acquired the properties through a tax lien foreclosure in the case of tax troubles. Some parcels have an abandoned home on them. Some are empty lots. All are no longer productive for providing housing or generating taxes for needed municipal expenditures.

All of these parcels sit on city infrastructure. They were all once productive from a property tax standpoint. They provided middle market housing while homeowners paid property taxes in support of the water and sewer lines, the sidewalks and other infrastructure surrounding their property.

I’ve had the opportunity to witness the process of dispossession of municipally controlled properties for many decades and in several of cities and towns in different parts of New England.

What’s built into each municipal process tells us a lot about each community. Here we’ll focus on my current location in Rutland, VT.

I had the opportunity to participate in our city’s fall 2025 process as part of a partnership focused on incremental development.

The application to apply for one or more of a selection of five properties stipulated that the process was not competitive (highest bidder); ‘The City is seeking to recoup the amount of taxes owed in addition to whatever carrying costs accrued since acquiring the property. However, the City may accept a lower offer depending on the circumstances…’ that all applications are considered for all listed parameters including proof you can complete a development, the quality of your plan and its relationship to the city’s long term housing needs.

Yet, the application asks each candidate how much they’d be willing to pay for each property and candidates can opt to pay any amount over the tax bill and city costs. The public meeting to review and vote in the presence of applicants began with our city planning director stating that the priority was placed on , ‘making the city whole’ through the process. It’s not clear exactly how in practice these bids are considered against each other. During the public opening of all applications, the dollar amounts presented were announced. So is the point to achieve a highest bidder? Best plan to add housing units? Most likely to be able to pay?

The committee, made up of alderpersons selected for the purpose, debated the overall dollar amounts of taxes ‘accrued while the property was in city hands’. The idea of a tax bill accruing without a private owner of the property is, to put it politely, a highly theoretical exercise. What would incentivize me to pay over and above the former private owners delinquent taxes when, by definition, I’m required to, ‘make the city whole’. Second, in considering whether taxes accrue to a non-existent private owner after municipal acquisition reminds me of the adage, ‘if a tree falls in the woods with nobody there to hear it…’

The application requests information as to how the applicant will pay for the property and development. If one indicates they will utilize a debt instrument from a local bank, proof of the loan is required. But how does one seek credible proof of a specific loan for a property for which one has no site control?

Let’s look at the yield this process has had in the recent past. Despite efforts, a number of past applicants who successfully acquired properties have yet to develop them, leaving abandoned homes in place for, in some cases, more than five years. While there does not exist a comprehensive list of said properties, through our efforts at Partners In Housing, we understand there are a number of homes acquired by developers who, for strategic reasons only they know, are left fallow. While the taxes may get paid, the housing units people need remain elusive.

What was our own experience? We applied for an empty lot alongside one of the cities respected non profits. We were told the city had purchased the lot from a different non profit in the recent past for $1.00. To our knowledge no taxes were owed on the property . This was confirmed as the city planner presented information at the onset of the hearing.

The non-profit entity was allowed to review their application first. To our astonishment, the executive director’s plan was frighteningly similar to ours, right down to the language used to refer to ‘panelized or modular construction’. Same number of units. Same overall footprint. Same construction principles. Nearly same target markets. Difference between rentals vs ownership for the residents.

Ok, so it may be possible that two different developers have very, extremely similar ideas for the same lot. Said executive director than offered that, since their organization had recently come into a large donation, they were willing to pay $20,000.00 over the cities required $1.00 for the property. Since we were not willing to go over and above ‘making the city whole’ the property was awarded to the non-profit. One alderwoman stated that, their’s was the better deal for the city. After all, why should the city not accept the infusion of cash. Indeed, this refutes the rules within the city’s own application.

Am I crying bitter tears? The loss of this project will not negatively affect our company. Was I happy with the process? Do I trust the process? Do I think all parties have the best interests at heart of myself or my neighbors?

I want us to focus on the singular question, ‘how do we increase our tax rolls while increasing the local capacity to build and benefit from more middle market housing?’

All good outcomes stem from well thought out, consistently executed process. That starts with clarity for our priorities. So what should be our community priorities?

The community’s singular priorities should be:

a) to return more properties back to tax roll productivity faster

b) seek to proliferate small scale development opportunities for its citizens interested in doing their part to solve the middle market housing crisis.

c) encourage a more vibrant local economy though development and the trades.

d) increase the public trust through consistent and effective processes.

The process itself can be automated through digital infrastructure, placing more lots before a public eager to get in the game. The internal processes and reallocation of human resources required for such changes can increase capacity while making for a more fair and transparent process, thereby increasing the belief in the common good.

It may appear to you that a city that works aggressively to garner as much short term, one time revenue for such properties is looking out for tax payers interests. I don’t think so. Lots that aren’t productive today aren’t housing citizens and aren’t providing needed tax benefit to pay for infrastructure. Taxes get paid every year a household is made productive, for decades to come.

Elected officials and their agents should understand there are only two ways a city makes money: new households that sustain needs while keeping per household tax bills down or the need to increase per household taxes as expenses rise. I wrote about this here. To support organic growth also presents an excellent opportunity for building political capital for those elected officials willing to participate in informing their constituents. Your tax rate stays put or reduces. We get more housing. We can fund increasing expenses such as new sewer and water lines when they pop.

A big picture emerges with stronger and safer neighborhoods full of new housing. Improved sidewalks, plantings and other placemaking infrastructure sustainably funded. Future improvements to sewer and water systems now be well funded making our city more resilient. All grand list expenditures become more feasible for decades to come.

And new households seeking an opportunity to stay in our great state of Vermont find the housing they need to make our great corner of the world thrive.