The Maryland agency that determines property tax values says it‘s correcting the way it assesses vacant properties the same day a new report concluded that the city’s supply of vacant land has been repeatedly undervalued.

That systematic undervaluation could amount to as much as $484 million, creating a disproportionate tax burden on homeowners, businesses and renters instead of the owners of vacant land.

That’s the crux of a report released Wednesday by the Center for Land Economics, an upstart nonprofit think tank that advocates for land value taxes. Its philosophy supports levying a tax on land without regard to buildings or improvements, which some economists argue would end land hoarding, bring housing costs down and redistribute the tax burden.

After hearing compelling anecdotes about land valuation discrepancies from community members in Baltimore, study co-authors Lars Doucet and Greg Miller began researching how Maryland assesses its residentially zoned vacant land.

“If you are not taxing vacant lots what they are worth, then speculators will have no interest in development,” said Miller, a former program analyst at the U.S. Department of Housing and Urban Development. Increasing the cost of land, he said, would create more housing opportunities and more tax revenue.

Doucet and Miller found that the Maryland Department of Assessments and Taxation, SDAT, was assessing the value of land and anything built on it separately. Often, the agency would use a percentage of the building assessment to determine the land’s value. That means pieces of land that shared similar neighborhoods, size and zoning could have different values if one was built out and the other wasn’t.

Bob Yeager, who was appointed to lead SDAT July 1 by Gov. Wes Moore, said the agency has heard concerns about the state’s land valuation process from a variety of Baltimore community advocates. They pushed SDAT to put more focus on accurately assessing empty lots to combat the “negative consequences.”

In a Tuesday afternoon interview, he acknowledged a pattern of inconsistency and said the agency strives to be a “positive resource” for taxpayers, business owners and other customers.

“We want people to have their properties assessed appropriately,” Yeager said. “The goal is always accuracy.”

The state conducts a rolling reassessment of all properties, with each property receiving a new valuation at least once every three years.

As of July, Yeager said, assessors in Baltimore have made it a priority to reassess and reevaluate vacant land and give it equal weight as residential properties. He said in past years, land adjustments weren’t evaluated as closely, in part because the office isn’t always aware when a parcel becomes vacant.

But that’s changing now, Yeager said, with renewed focus on the problem, new technologies and other tools to help assessors make more accurate assessments.

He said the report, though consistent with the agency’s view that the procedure could be improved, prescribed a one-size-fits-all approach to a city with much more nuance.

“We’re not looking at revenue generation,” Yeager said. “The assessments follow the market; they don’t determine the market.”

Doucet and Miller concluded that SDAT’s processes were unsophisticated and the agency likely needed more funding.

Changing how vacant lots are assessed, and taxed, is one of several big ideas being floated as Baltimore seeks to reduce its supply of vacant homes and empty land over the next 15 years. The idea gained some traction in Detroit when longtime Mayor Mike Duggan lobbied for the change in 2023. It has failed to pass the Michigan Legislature, with opponents arguing that the unpredictable economic effects could cause foreclosure rates to increase.

State legislators in Maryland have not raised the prospect in the General Assembly, either. A separate proposal, which authorizes Baltimore and other jurisdictions to impose higher tax rates on vacant and abandoned homes, will begin taking effect in the city as early as 2026. It does not yet apply to vacant lots.