At its bimonthly meeting Wednesday morning, the Baltimore City Board of Estimates approved a 20-year tax break related to an affordable housing project in West Baltimore.
Known as a payment in lieu of taxes (PILOT), the break will significantly reduce Hudson Valley Property Group’s tax burden as it seeks to redevelop four buildings along Pennsylvania Avenue: Boone Manor, Orchard Gardens, Greenwillow and Woodland Street Apartments.
According to Baltimore Budget Director Bob Cenname, the developer will renovate 204 of the 508 housing units across the four buildings for households making less than 50% of area median income (AMI) — which state data shows was $61,100 for Baltimore City in 2024.
Cenname said that, without the PILOT, Hudson Valley would be paying nearly $1 million in annual taxes within 15 years. Board of Estimates documents show Hudson Valley would owe an annual average of $311,580 in taxes with the break, thus allowing the developer to charge the cheaper rents consistent with a low-income housing development.
“From a financial standpoint, we believe that … less income into the city is worth it for this particular affordable housing development,” Cenname said.
Project finance director Stephani Estrada, of the city’s Department of Housing and Community Development (DHCD), gave a more detailed presentation on the PILOT’s benefits.
According to Estrada, the developer spent a total of more than $44 million to prepare the four properties for renters: $34.89 million to purchase and $5.5 million to renovate the buildings. The PILOT has a value of about $7.8 million, meaning the developer will save that amount in taxes over the 20 years — though not evenly each year, since rents will be adjusted with inflation and rising incomes over time, Estrada said.
While supportive of the project overall, board members expressed caution with handing out too many tax breaks for such developments in the future.
City Council President Zeke Cohen called upon the city to break its habit of allowing residential buildings to fall into disrepair in the first place.
“I guess where I am concerned, as a steward of the city’s taxpayers, is that we not get into this habit of allowing large buildings with a lot of Baltimoreans living in them to essentially fall into a state of disrepair and then the developer becomes interested in selling the property,” Cohen said. “…The only way the deal then works is for the developer to get some sort of PILOT or other subsidy. That is generally not great practice for us as a city.”
Echoing Cohen’s concerns, City Comptroller Bill Henry said city leaders need to better collaborate with DCHD on the issue of code enforcement in multifamily housing.
“[We’re] going to have difficulty speaking to how the buildings get like this, but it’s definitely a conversation I would encourage us to have,” Henry said.