Victor Vardamis has lived in the big green house at the end of Kossuth Street in Bangor for more than 20 years. Several years ago, his late wife, Lisa Raven, fell ill. Vardamis, 62, spent his time taking care of her and fell behind on his work as a carpenter.
“That’s when I started falling back on taxes,” he said. “I didn’t know what to do. I didn’t know who to approach and how to approach.”
After a few months, the city placed a lien on his house, which meant it legally passed into the city’s possession due to unpaid taxes. A year-and-a-half after that, the lien matured and Vardamis’ house technically passed into the city’s ownership. He owes the city six years’ property taxes plus interest.
But almost a year ago, he decided to respond to a letter from the city informing him of the lien. He went to city hall and met with staff from the tax collector’s office. He told them what he could afford to pay every month, and they worked out an agreement, which the City Council approved.
Vardamis, who receives Social Security disability payments, now pays about $400 a month in back taxes and current taxes. At this rate, he’ll be current on taxes in five to six years.
“I feel like a big load is lifted off me,” he said. “I feel really good about it because I don’t have any place else to go. This is home.”
Vardamis is one of a growing number of homeowners in Bangor with matured liens on their properties who are paying back some part of what they owe after working out a payback arrangement with the city.
The payback arrangements are one part of a new approach the city has taken to tax-delinquent properties in recent years — an approach that has helped to cut the number of properties in city ownership due to unpaid taxes in half over the past two years.
The approach is both more collaborative and more aggressive. The city has stepped up its efforts to communicate with property owners and negotiate more payback arrangements like the one with Vardamis. It has also become more aggressive about taking over tax-delinquent properties and selling them to new owners who can return them to the tax rolls.
“It’s not fair to a neighborhood to have abandoned or dilapidated or vacant property nearby,” Bangor City Councilor Ben Sprague said. “So we have been working aggressively over the last several years to try to move some of these properties along and get them in the hands of people who can improve them and get them back on the city’s tax rolls, and more importantly provide a place for someone to live.”
There are currently 53 properties in Bangor with matured liens, totalling approximately $571,000 in unpaid property taxes. In 2017, the same list had 113 properties, with a total due of $712,000, according to Tax Collector David Little. The city has collected $250,000 in property taxes, interest and fees from the properties that have come off that list and are now fully paid up, he said.
The list grew for years
If property owners do not pay their taxes within eight to 10 months of receiving a bill, the city starts to place a lien against the property. It takes 18 months for the lien to mature. At that point, ownership of the property legally transfers to the city.
For years, the number of properties with matured liens kept growing.
With a tax collection rate of about 98 percent, the city had some leeway to let that happen, Little said. However, it needed to take a more aggressive approach toward tax-delinquent properties following the housing crash of more than a decade ago and reductions to the amount of revenue sharing the city received from state coffers, he said.
That required trying to work with property owners who had fallen behind on their taxes. Under state law, the city is only required to send a demand notice at the start of the lien and a foreclosure notice when it matures. But Little said the city now also tries to reach property owners through certified mail and publishing notices in the newspaper.
The easiest properties to deal with are vacant homes with matured liens, Little said.
“We reach out to property owners and ask them if they really want that property,” Little said.
If they do, the city works out a deal. Currently, the owners of 14 of the 55 buildings with matured liens are either paying down their unpaid taxes through an agreement with the city or are preparing to.
“If it seems like there’s going to be a light at the end of that tunnel and they’re not going to continually fall behind year after year and just drag it out longer, then we’re willing to work something out with them,” Little said.
Sometimes, a property owner raises concerns that the city is overvaluing his or her property. In those cases, Little might recommend that the City Council forgive some of the unpaid taxes on that property if he thinks it’s warranted.
Along with an increase in the number of agreements with property owners who have fallen behind on taxes, the city has also started taking possession of more properties. Since 2017, the city has taken over 22.
“We understand that everyone falls on hard times,” Little said. “We want to work with people, and we don’t want to take anybody’s home away from them, but at some point to be fair to all of the other taxpayers we do need to do something.”
In July alone, the city took possession of six properties and two parcels of vacant land from the matured lien list, with years’ worth of unpaid taxes. Before the change in approach about five years ago, according to Little, the city had only taken possession of a few tax-delinquent properties in 20 years.
“We’ve taken more than we’ve ever done before,” he said.
Returning homes to the tax rolls
Two of the six are set to be demolished because of their condition, said Jeff Wallace, the city’s director of code enforcement. The city hopes to sell the others.
“Our goal is not to make money on this,” Little said. “Our goal is to get them back out to somebody that’s going to develop them and put them back on the tax rolls.”
The city has resold nine of the 22 properties it’s taken over in the past two years, according to Little. One example was a building on Merrimac Street that a developer bought for $500 and is now rehabbing, he said.
The resales have put an estimated $300,000 in taxable property back on the tax rolls, Little said, and that’s a figure that could increase if the properties become more valuable following renovations or new construction. At the city’s current mill rate of $23 for every $1,000 in property value, the resold properties translate into $6,900 in property taxes this year.
“Eventually it will net out to us maybe making a net gain on it, but that’s not really our goal,” he said. “It’s to have good properties in good neighborhoods.”