L ooking around the Inner Harbor over the past few years would give observers a misleading picture of Baltimore City. A few years ago, cranes covered the skyline. Now thousands of new condos and apartments, new retail stores and a new convention center fill once abandoned or vacant lots. These are signs of growth, right? Of businesses and upwardly mobile workers choosing Baltimore, right?

Wrong. The city actually lost taxable property since 2000 — 2,443 properties to be exact, according to documents obtained by The Examiner from the Finance Department.

Property values are another issue. The cash value of taxable property in the city rose 88 percent since 2000. That is a positive. But the real estate market and outlook shows that number is falling or will remain stagnant in the next couple of years.

More ominous than the real estate outlook is the fast-paced increase in the quantity of tax-exempt property citizens pay for in the city. Since 2000, the number of tax-exempt properties rose 46 percent to 19,042. The value of that property rose 50 percent to $11.1 billion as of January. That means that fewer taxpayers are shouldering a larger portion of the city’s property tax bill.

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We’re not clear how nonprofit and other tax-exempt property could fail to appreciate over the eight years, as figures show, unless no tax exempt property has been reassessed during that time. If it reflected the same jump in prices as taxable property, the real figure would be about $21 billion — or 66 percent of the value of the taxable property in the city. How is that fair — much less tenable?

No other county in the state forces its residents to shoulder such a large property tax burden, even if we use the state figures showing that 33.7 percent of the city’s property value is tax-exempt. At 9.4 percent, Prince George’s comes in second.

The main reason for the rise of tax-exempt property is the city’s tax rate — at least twice as high as the rest of the state. And as these statistics make clear, by pricing out new businesses and residents and squeezing out existing ones, the city is headed toward eliminating property taxes by attrition.

Worse, this trend forecloses any possibility of working-poor and lower-middle-income residents ever owning homes in the city they make function. 

The answer must be to lower taxes, now, to a rate competitive with surrounding counties. It means short-term revenue loss until new businesses and residents relocate. The alternative is more of the same slow, inexorable death.