In the 1970s, when I took my first professional courses in real estate appraisal, I learned fundamental things about Massachusetts community property tax revenues that I see that many other developers of affordable housing in Cambridge clearly don’t understand. not, to our danger.
The consistency of the size and style of buildings is a key component of the prices and values of the residential real estate market. More of it increases market values; less of that decreases them.
The homogeneity of interior uses (how many and who live there) has much less influence on the value of neighboring buildings.
Our state’s Tax Appeal Board has the power to dramatically reduce the assessment (and therefore property taxes) of any building where the neighborhood zoning is changed. The obviously well-educated neighbor of the town of Brookline was once shocked to see his property tax revenues drastically reduced by the board of directors (because the town had passed rent controls, before rent controls were banned by a statewide referendum). This has reduced reasonably expected future rents, and rental income is a major factor affecting market values and therefore property valuations and taxes payable.
But whenever the zoning of an adjacent or nearby building is changed – to allow for more height, smaller setbacks, smaller side, front or back yards, or less canopy or sunlight – the Neighboring owners are entitled to varying degrees of property tax rebates. I would rather forgo some fees for expert testimony in front of council than to see the neighbors and our whole town suffer by being silent and not warning of these dangers.
There are much safer and better ways to provide affordable housing. Some proven examples:
My own house is in a northeast corner. Directly across the street, on the northwest corner, is a larger Victorian house, which – with my eager public support – has been converted into a well-run halfway house for people with intellectual disabilities. It didn’t hurt the market value of my house as this house is much nicer Victorian than mine and better painted. Right now I’m in pain his market value; but his inner change has never hurt me and will never hurt me.
In 1963, at 64 Wendell St., I founded a trust for – and helped buy – a vacant three-family home that will be turned into a non-profit clubhouse to house eight to 12 graduate students and workers (including me). We converted it into one big house, sharing the living room, dining room and kitchen on the first floor and the three bathrooms, one on each floor. I lived there until my marriage three years later.
These are real examples of how we can encourage affordable housing without overbearing zoning gimmicks that come with inherent dangers of reduced tax revenues and disgruntled citizens.
I suggest safer, more constructive, and easier approaches.
- Be careful about approving taller and wider buildings; fewer front, side or back yards; or less sunlight or trees than neighboring buildings. Why pay dearly for those of the Tax Appeal Board?
- Also be liberal in allowing a wide variety of changes to the interior of existing residential buildings, which avoids monetary dangers and neighborhood turmoil, but can provide affordable housing. Some examples:
Get rid of the outdated layout in our current zoning limiting the occupancy of any single-family house to only “persons belonging to the second degree of kinship”.
Allow right subdivisions of a large single-family house in separate apartments as long as there are no exterior changes (or very minimal), such as new rear or side entrances hardly visible from the street.
Let few elderly owners stay where they are rather than having to relocate to a retirement community adding helpful tenants or co-owners who could help them with household or personal chores.
- Recognize that majority voters would also want new affordable housing buildings to be indistinguishable by the appearance of nearby market-priced housing, just as recipients of state-funded food demanded a pseudo-credit card paid for by the government. government to replace those old stigmatized food stamps. (You remember ?)
- Always remember the law of supply and demand and make any new zoning of offices and laboratories always work for us, not against us. Two years ago, I arranged a rental for a condo buyer who lived overseas. The first person who wanted to rent out his tiny bedroom on Chauncy Street was a bachelor scientist working in Kendall Square. When I moved here in 1959, Kendall was literally a wasteland; I remember a newspaper article that the city had to spend money to get rid of the abandoned cars that were regularly left there. But his rental application showed he was making $ 400,000 a year.
To avoid straining long-time tenants, change office and lab zoning to require the same number of apartments as employees to be built within a 20-minute T-ride or free shuttle required. Suppose half of the projected 100 employees decide to rent in this building and the other half rent or buy elsewhere. That’s 50 people less competing with existing residents for existing apartments.
Would that take developers away from Kendall Square, which pays a third of our property tax revenues? I do not think so. Biotech workers want to work near other biotech workers. A biotechnology office in Newton wouldn’t work as well.
I had the chance to ask this question to Jonathan Gray, President of The Blackstone Group, at the Yale Alumni Real Estate 2019 conference. As the first speaker after his opening speech, I described my idea and asked if it would scare him and other office developers away. He laughed and said, “I think I’m the biggest owner of Kendall Square. And I think something like that could be resolved.
I now cannot imagine a better partner to help solve our accommodation problem at no cost to Cambridge.
Some final suggestions:
Let’s stop bragging about our city’s annual decline in property tax rates and credit ratings. Scrooge also had an excellent credit rating. But until he reconsidered his values, he was not happy.
Our super low tax rate didn’t make us happy either. Whenever a suitable building hits the market, why doesn’t our city buy it and convert it into municipal housing for some of our police officers, firefighters, teachers, town hall, hospital, postmen and members of the clergy who would like to live where they work? ?
Promoting Homeownership in a City Where Two-Thirds of Residents Are Renters: In my experience, tenants can afford to pay a fixed rate mortgage, but just don’t have the down payment they need beyond the amount of the mortgage. Second mortgages for half the down payment are hard to find and have very high interest rates. Nothing prevents our city from becoming a reasonable rate second mortgage lender for tenants who are displaced. Our city borrows, through tax-free municipal bonds, at an interest rate of less than 2%. We could issue a second mortgage to longtime residents worthy of eviction, at around 4% and, after allowing an occasional default (which would give city title to the property for sale to another current resident). ) and administrative costs, would probably generate money. . What use of the city’s resources could be better or fairer?
Fred Meyer, Hammond Street