Average Boston property owner to see tax increase

The Globe reports.

Neighborhoods: 

Topics: 

Free tagging: 

Comments

Get creative, City Hall.

By on

Instead of upping the property tax (hello, McFly, they'll just pass it on to the tenants who already pay way too much), how about a City Blight Tax.

City Blight Tax
If a commerical property sits vacant for 9 months, a monthly tax of 10% of the asking price/assessed value will be rendered until such time that the place is rented or sold.

There are too many commercial real estate firms sitting on too many parcels because they're afraid to lower their asking price and lose value on their books. They'd rather coast towards bankruptcy than admit that their prices are way too high for demand. We're heading for a second real estate collapse, this time in commercial space. Nudge these bastards who are freezing our city in the hopes of one day making way too much money on land they had no business buying up in the first place at such an outrageous amount.

It's time to revalue ourselves and take it on the chin temporarily in order to revitalize the city. Tax the have's and not the have-not's.

PS - It's not even that creative.

up
Voting is closed. 0

Hit Faust with it, too

By on

Why stop with commercial real estate? I think we ought to hit Faust with it, too. Then, we can see how fast Allston recovers from Harvard's current depredations.

up
Voting is closed. 0

Am I dumb?

By on

Didn't I get a bill a few weeks ago showing preliminarairlialrilly that the assessment of my house went way the fuck down? Is the rate going up? It wasn't clear from that article.

up
Voting is closed. 0

You are not dumb - the rate is going up almost 12%

By on

The rate is going from $10.63 to $11.88 per thousand or an 11.7% increase (the residential exemption is going up by about $100 also so thank a landlord that doesn't get the exemption for that one - the taxes don't go away - most get paid by landlords and a small amount gets picked up by homeowners with properties valued above $800k).

This was actually a gift - the city only lowered commercial valuations by about 8% and the state signed off on it. However, the press has reported commercial valuations off by a lot more than 8% with the WSJ reporting our declines as one of the worst in the country. If the city had reduced commercial valuations by what is probably a more realistic 15% (valuations are as of 1/1/09) we would have been hit with about a 25% increase in the residential tax rate. At some point that adjustment will have to be made along with the 15% decrease that probably came in 2009.

I love the info about how low our rates are compared to the burbs - keep in mind that commercial property pays over 60% of the taxes in Boston - if commercial paid only 20% or so like in a lot of the bedroom communities our rate would be about 75% higher and our taxes would be much higher than the suburbs on homes that are worth 25-50% less for a similar property (you also can't compare the average house in Boston to the average house in Brookline or Wellesley). Another case of the lazy Globe just regurgitating the totally spun pablum emanating from City Hall.

One point of interest - I tried to FOIA the information to calculate the average residential increase in September (was told the info was not available) and again in October (no response from City Hall). Does anybody out there think the election results might have been different if we knew the city was going to increase taxes 10% with another 10-20% increase probably hot on the heels of that for 2011? How do you think some of the downtown owners getting hit with 4% increases in valuations PLUS the 11% rate increase would have voted, especially if they were informed it would probably get worse, a lot worse, next year?

up
Voting is closed. 0

The percentage game

No, you're not dumb. Yes, your assessment went down (way TF down, because of your neighborhood). The rate is going up in response to the assessments going down. Otherwise they'd have much less money.

If one ignores the percentage game for a moment, the bottom line is you and the average homeowner will be paying less than you did in FY 2008.

So don't run screaming to the hills just yet.

up
Voting is closed. 0

I think SP is about right

By on

The total residential property taxes paid in 2009 was 507.5 million. That will increase by about 6.3% and will bring us to almost exactly the total amount of residential taxes paid in 2008. After deducting out new construction the average homeowner's taxes will be down by probably a fraction of 1%.

BUT - total residential taxes were $260 million in 2000 - so over the past 10 years they have roughly doubled (some have seen their taxes go up more, some less). Ignoring the percentage game that's about 1000 real dollars per household on average :-)

Somehow the city got away with only reducing commercial assessments by about 6% and the state signed off on it. If you believe that one I've got a Hancock Tower to sell you - good for Rakow - and better for us! However, if they had gone down by a more realistic 15% or so we would be looking at a more than 20% increase in the average property tax which would probably inspire civil uprisings in parts of the city. Not the Ritz towers which apparently IS gettting an actual 23% increase on average.

I know - screw the rich and their luxo condos - but unfortunately their property values are dropping across the city like pigeon poo which means the rest of us will have to pay the taxes they won't be paying next year. Save your pennies - Manny Ramirez will be putting an extra $12k in his pocket because we will have to pick up the slack for the reduction in the value of his condo.

Expect wailing and gnashing of teeth come about April as the city seeks to make changes to various property tax laws for FY 2011. We'd better all hope they are successful or pray for a mysterious surge in commercial valuations.

up
Voting is closed. 0

Surge not going to happen

By on

It's not going to happen and the city isn't going to raise residential property taxes to compensate or nobody would be left to tax. They're going to have to actually do their jobs and find another source of income...like a blight tax.

Real estate isn't worth the bubbled prices any more and this city has been completely reticent to accept that fact and move on. Our city isn't worth as much as it was 2 years ago. Therefore, we're not going to gain as much revenue from the property itself. If that means instituting a citywide income tax (like NYC and tons of other major cities of the world), then so be it. If that means changing the charter/state constitution/etc., then also, so be it.

If this city runs to run on X dollars and it's long been basing that X on some range of percentages of the city's worth in property that has made people comfortable...well, guess what...that worth has long been inflated by absurd means (keeping the percentage low enough for people to stay comfortable with it). Welcome to the end of the real estate bubble.

The real estate field was musical chairs. Whoever got stuck holding the properties when the music stopped got screwed. We can't ignore that fact by pretending that their land is worth what it was worth before the economic collapse and continuing on like everything is fine...because if they don't have tenants or buyers for their buildings/land at their 2-year overinflated old rates, then they're not going to have them next year either...or the year after that. Make them lower their rates to get the music started again. Make property devalued in this city and you might see smaller companies moving in, more residents finding homes and having the cash to improve them on top of their mortgage, and more income flowing back into the city in time.

We're not Detroit, but when you can buy 100+ acres and an 80,000 seat stadium for one TENTH of the cost of a luxury Back Bay condo bordering the Garden....something is seriously askew.

up
Voting is closed. 0

No choice

By on

I agree with a lot of what you say/write - but here's the problem - the city has promised steady pay raises and huge retirement benefits to the workers which get more expensive every year. They need to generate 3-4% budget increases annually to pay for all this.

They have 3 sources of income:

Fees/interest etc. - goes up on average about 1% per year and is only about 20% of the budget - .01 times 20% is a fraction of one percent - not a lot there that will add to the budget

State aid - well we all know what's going on there - revenues for November were up a little so maybe we can get some additional aid - but I'm not holding my breath and the state is in hock up to their ears - they are not going to make local aid a priority with so many other issues and priorities on their plate

That leaves property taxes which go up 2.5% every year plus new development (which is why the city takes their build it whether we need it or not approach).

Possible new sources of revenue to offset property tax increases -

not the meals and hotels - they are using that to plug the holes we already have in the boat

new pilot like Murphy is talking about - might get away with that for one year as it will be incremental but after that it's back to property taxes and even there they have obligations that may have already spoken for these incremental revenues

blight tax - maybe - but it will still be a relatively small income stream when you find out how few properties actually would be affected - maybe a few million dollars

Bottom line as I've been saying- contrary to the Glob's regurgitation of city hall press releases our government has our backs up against a wall due to for fiscal management and it means either much higher real estate taxes (unless there's an unexpected surge in commercial valuations) or city hall cuts workers, salaries and benefits - there just aren't any other rabbits in the hat.

up
Voting is closed. 0

Don't forget

By on

A city income tax is also another possibility. There is probably some fat to be trimmed on the city's personnel and there's always the old "well, we can pink slip most of you...or you don't get the increases we promised: your choice" argument. But it's completely understandable that we're weak in revenue since we base it mainly around property. That's great!...for the past 50 years. As real estate kept going up, we kept having money to spend. It was *really* ramped up for the past 10-20 years.

Those gravy days are over.

This was one of the other reasons I wanted a new mayor. I don't think Menino is going to be in the right mindset to actually shift with the situation we find ourselves in now. A new mayor (*any* new mayor) would have been more atuned to the *current* situation instead of thinking that we're just in a shift from the past situation. His plans have all been relevant when the city was swimming in money. Our government needs to retract along with the real estate and economy. That doesn't necessarily mean cutting services. Paying consultants money to figure out how to revamp the Convention Center is just wasteful at this point.

up
Voting is closed. 0

Relevance

By on

Nearly every article on the topic points out that the BRA and the Mayor's office have been intimately involved in the proceedings of the Convention Authority in planning out the expansion that was discussed in November.

Some of the land that they want to expand onto is held by the BRA and Menino wants to sink another $80+ million of the city's money into the Marine Industrial Park next door as part of all of the development plans.

up
Voting is closed. 0