With the new year underway and property taxes rising in Boston, the City’s valuation practices are once again under scrutiny.
Commercial property owners recently filed a class action lawsuit against Boston’s Assessing Department alleging retaliation against property owners who sought overvaluation abatements.
Residential property owners are considering similar action.
The impacts of the city’s approach are not evenly felt across neighborhoods in Boston.
For instance, while the city claims residential valuations rose about 2 percent citywide, communities like the South End saw their home values increased unilaterally by the assessing department by more than 7 percent.
Overvaluation is one of the main factors in residential property tax increases.
To move forward responsibly and fairly, the city must reform its valuation practices.
Historically, the Massachusetts Supreme Judicial Court has sided with property owners, as in Tregor v. Boston Board of Assessors (1979).
To avoid further litigation and help insulate property owners from increased tax bills, Boston has to focus on steady economic growth, or “new growth.”
It is not only declining downtown property values that are affecting the city’s revenue.
According to the city’s data, last year Boston generated the lowest amount of “new growth” in a decade.
For decades, the city has expanded services and invested in neighborhoods by generating new growth, rather than sharply increasing taxes on homeowners.
Structural economic shifts cannot be solved by suspending state law or sidestepping Proposition 2½.
In places like the South End, many small businesses operate in buildings that have not lost value, leaving them on the losing end of the Mayor’s plan as higher taxes are passed through as increased rents and costs.
This is especially concerning given post-pandemic efforts to support small businesses, including liquor license reforms I proudly amended to include the South End, this was intended to expand the city’s tax base. The Mayor’s proposal would undo that progress.
If the City’s plan were to pass, property taxes would still rise across the board, passing higher costs on to owners, renters, and consumers. Notably, the Mayor’s plan would not deliver a tax cut to residential property owners.
With $552 million in the City of Boston surplus fund, this commitment to raising residential taxes is unnecessary and unfair.
To ease the burden on taxpayers, the Legislature, working with Governor Healey, passed the most sweeping tax relief bill in a generation. The law expanded the Earned Income Tax Credit, increased the Senior Circuit Breaker, enacted the most generous universal Child and Family Tax Credit in the country, and increased the rental deduction cap for tenants. In addition, the state has also provided significant support office to housing conversion efforts, to help the city’s efforts to revitalize the downtown core.
The Senate has also advanced legislation enabling Boston and other municipalities to provide direct property tax relief to homeowners, including rebates beyond expected increases, without burdening small businesses or residents.
Instead of raising taxes, the Senate legislation prioritizes leveraging surplus funds to provide relief from municipal property tax increases.
Boston can and should deliver property tax relief now, but it must do so responsibly. And it can. In the short term, the city should leverage new growth revenues to provide property tax relief, while in the long-term reprioritizing new growth and fiscal discipline to make living in Boston affordable.
Nicks Collins represents the South End.
Seaport and South Boston in the MA Senate.
