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Dark-money group has gotten a lot of press warning about the collapse of Boston's office market
By adamg on Mon, 04/22/2024 - 9:51am
CommonWealth Beacon takes a look at the new Boston Policy Institute, whose donors it won't reveal - unlike the older, more staid and currently leaderless Boston Municipal Research Bureau. The group's organizers say they have to keep their donors secret to avoid retribution from City Hall.
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Comments
Doesn't the city have its own budget forcasters?
Taxes are based on real estate sales which anyone can see publicly. (There's a whole scammy industry of monitoring deed transactions and contacting those involved.)
This group and Wu are both correct. Boston won't face a budget shortfall if they can just collect money more money from residents instead of businesses.
At the same time, taxes aren't free money. Even if a property has appreciated, the people living there won't see those gains until the they go to sell. Raising property taxes makes it even more expensive to live in the city. To Wu's credit, she seems to understand raising residential property taxes by 40% isn't going to be well received.
I'm surprised it's a progressive group that's acting like Chicken Little on taxes, especially if the outcome is a decrease in public services. If they think they can force Wu from office and replace her with someone more progressive, they are wrong.
Speaking of doom loops, the commercial real estate isn't going dying off in Boston. The market is still going to be soft for a while but buildings will get renovated and repurposed and it will return. Although the city is wrong to just think they can endlessly raise commercial taxes with no impact.
The untapped source of
The untapped source of funding is landlords. With rising rents, they can afford to pay a lot more in taxes. Instead of paying the 1% tax rate charged for residential property, those rental property owners ought to pay something closer to the 2.5% tax rate charged to commercial property owners.
Rent is Boston today is driven by demand, not by landlord expenses, so this won't affect rent charged to tenants. On the plus side, it might also help claw back some of that housing stock from investors and get it into the hands of homeowners.
Interesting Stats
According to BPDA, 35% of Boston residents own their home. So this group directly pays the property taxes.
Many lease agreements have a stipulation that the rent can be increased out of cycle if there's a substantial increase in tax rate. So people's taxes will rise even if the landlord can float it.
No, it's the opposite. Since taxes are factored into the max mortgage a bank will lend, raising taxes makes it even harder for people to buy in Boston since they won't qualify for as large of a loan given their pay.
Plus commercial tenants pay
Plus commercial tenants pay real estate taxes and common area maintenance charges. Sometimes are base tax years and they pay the difference between the base and current FY. Some are billed on a percentage of the buildings they occupy. The vast majority of commercial tenants pay taxes.
The group is to the right of
The group is to the right of the Mayor. But don't actually appear to be out to get her if you follow their work. The Research Bureau interim leader, former Dem State Rep and head of Planned Parenthood, also testified with same take as BPI.
Raise property taxes 40%?
Or really at all is challenging. Sure, you could do that one-off on properties in the city, but you can't increase property tax revenue as a whole by more than 2½ a year citywide due to Prop 2½. The only way to substantially increase residential property tax revenue is new construction, which doesn't count against the existing year's cap.
There's been some recent news on this
The city can't raise the overall budget without a P2.5 override but they can raise taxes to keep spending the same.
If there is a drop in revenue from commercial assessments the city will be obligated to raise taxes on residential property to keep a balanced budget. Or they can cut spending.
If the dire predictions come true, homeowners might see very steep increases in taxes on account of commercial valuation dropping.
The city can't just keep upping the rate on commercial properties relative to the rate on residences due to a state law. Wu has said she plans to file a home rule petition to increase this percentage so that residents won't be hit as hard. It's unclear if the state legislature will approve.
This reads like a hit piece
This reads like a hit piece on the guy who runs the think tank instead of the substance of their reports. I haven't seen anyone really challenge what they've put out there factually. They seem to be the only entity out there raising legitimate concerns about city revenues.
Menino was the biggest
character for holding grudges. The current Mayor is learning fast how to hold grudges against people who cross her. Look what happened to the Italians in the Nirth End. Wu shows her true bigoted ways.
Italians in the North End?
You mean restaurant owners who live in the suburbs, right?
As opposed to people who actually live in the North End (and, granted, the waterfront) and were asking for help dealing with all the parking they lost and stuff that resulted from all the extra patios on public property.
Aw, schucks
You were nailing it until you played the bigot card. So close!