DC tax program leaving homeowners homeless

8:53 PM, Sep 10, 2013   |    comments
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WASHINGTON (WUSA9) -- Small debts are snow-balling into thousands of dollars, and leaving elderly people in the District without a home. It happens more than you might think.

Overlooked property taxes are leaving life-long DC residents out on the streets.

"It's upsetting, especially for the seniors. It's often their security, their life savings, their legacy to their children," said Joannie Savage with the Legal Counsel for the Elderly.

She's talking about a program that allows elderly to buy liens on homes whose owners owe property taxes. The District does this as a way to collect back-taxes. The idea is the purchaser would then own the debt to charge an interest rate of up to 18% to the homeowner.

"The debt may be as low as $1,000. Once the lien is sold, the attorneys' fees can really snowball to four, five times as much as," said Savage.

Then, many elderly people are forced out of their homes through foreclosures. Advocates say the elderly don't even know they owe money in taxes. The first time they hear about it is when they get that knock on the door asking them to leave. 

"We feel a tremendous responsibility for the people who are affected by this. It's just atrocious situations," DC Mayor Vincent Gray said about the program.

A majority of the cases are in Wards 7 and 8. Now Savage and the Legal Counsel for the Elderly are calling on D.C. leaders to change legislation.

But the DC Office of Tax and Revenue has no plans on changing it. 

"This is the only collection mechanism that is provided by statue, so we are in charge of administering it," said Stephen Cordi, Deputy CFO, Office of Tax and Revenue.    

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