While income tax rates may be a top political issue, state elected and opinion leaders are all wrapped in the housing issue.
The Globe covers the boom in home sales in Lawrence in today’s paper.
Housing is the biggest problem facing Massachusetts, because if people can’t afford to live here they will move. And if businesses can’t afford to pay employees to live here, they will move. They’re doing that now, and will continue until we fix this problem.
We’ve seen some movement on this issue from the Legislature, with the passing of Chapts. 40r and 40s, but have yet to see as much media attention on this issue.
We need a smart candidate to take the lead on this issue, because this ties right back into property taxes — as home values increase so do property taxes, regardless of whether the tax rate is hiked. One way of doing this is tapping into Massachusetts satellite cities which have plenty of existing housing, like Lawrence and Lowell. The other way is to support innovative legislation which encourages more housing construction and at higher densities.
And the trick to get people to live in satellite cities is to ensure efficient, accessible public transportation into Boston. I know plenty of young professionals who live in Waltham, where you’re a 20-minute commuter rail ride from North Station. Make that a reality all over and I think there are a lot of people willing to look for housing where they can afford it.
I’ve seen a lot of suggestions like this one, urging improved public transportation from places like New Bedford to Boston. The theory seems to be that we can create outer-ring suburbs to help meet the demand for housing in the Boston market and to stimulate the economies of these dying industrial cities.
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I’m hardly an expert on urban development, but this doesn’t seem like a viable solution to me. Beyond all the logistical problems (commuter rail delays, increased traffic, etc.), it just doesn’t seem like the wrong model. Isn’t there a limit to the (pardon the Boston pun) hub-and-spoke model, and wouldn’t it be more desirable to redevelop some of these cities as industrial centers instead of as bedroom communities?
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It seems like the amount of money that could be spent investing in inter-city transportation could instead be spent on local infrastructure, increased law enforcement, incentives for entrepreneurial small businesses to open and remain in the city, incentives for educated individuals to live in the area, etc.
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As I said, I’m no expert on this stuff. I really have to believe, though, that there’s a better solution than turning all of eastern Mass. into a giant suburb of Boston.
because it is these issues that have steered me in Tim Murray’s direction. Whenever I have heard him speak it is about improving transportation and affordable housing (linked to cities & towns reliance on the property tax).
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He really has been able to grasp all of the issues that effect voters & particularly working families & young people and knows them in depth.
is the best way to ensure that we don’t simply get more sprawl and more auto traffic. But, the schools suck.
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Extending the subway and rail lines helps, but the green line between Kenmore and Park is at maximum capacity. The only way to really expand the T is to tunnel from Kenomre to Hynes, and trench from Hynes to Park so that the green line is — brace yourselves — 2 rails in each direction. This would allow some trains to express Kenmore -> Copley -> Park, which would reduce commute times for those on the B/C/D/E, and would reduce congestion at all times, as well as not make a stuck car such a showstopper.
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That, and connect North and South stations by commuter rail.
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Those two things would be incredible improvements for our public transit system, thereby allowing substantially more choice for riders and much more capacity.
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But, we blew our wad on burying the highway for cars, with little regard for walkers, cyclists, riders, and rollerbladers — you know, the folks who allow for dense cities with less pollution and a lower cost of living.
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In the mean time, the insane prices of condos have started to cool around Boston, as the glut of for sale signs is starting to accumulate. That will help a bit, at least in the mean time.
a lot of the huge leap in existing home prices can be attributed to people snapping housing stock up as investment properties. this not only drives up prices, but also erodes community as the buyers often have no intention of putting roots down in the particular locale or even living there. the first time home buyer or the family looking for a place to raise their kids are currently at a great disadvantage to these kind of buyers.
by readjusting tax credits and homestead exemptions, primary home buyers could be helped, while the people who were buying up homes solely to flip them in a couple of years for an easy profit would find it less financially advantageous to do so.
the rates of mortgage lending are another area where sliding scales for speculators would benefit the community at large.
but there’s been a political backlash against the Big Dig and the transportation improvements attached to it. (One of the most interesting pieces of the Dig, aside from its marvel as a political and engineering feat, are the public transportation projects required to be built in conjunction with the Dig. Many of those were significant commuter rail improvements spurring redevelopment in urban centers like Worcester. And Tim Murray will be the first to tout this.) That backlash is starting to cool, however, and now’s the time to lay groundwork for improved transportation.
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There’s another problem, too, and this has been highlighted by a number of regional think tanks ([The Rappaport Institute http://www.ksg.harvard.edu/rappaport/%5D at KSG and Northeastern University’s [Center for Urban and Regional Policy http://www.curp.neu.edu]) — you have no regional planning ability in Massachusetts. Developers have a hard time building homes b/c Massachusetts has 351 autonomous local governments setting 351 different rules and regulations for construction.
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This is a big problem that elected leaders have attempted to beat in the past (through Chapter 40b, which set affordable housing requirements.) Leaders have since changed their tactics, toward more gentle handling of localities with Chapter 40r, which encourages greater housing densities, and Chapter 40s, which provides school aid.
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And both of these problems can only truly be answered in the corner office. But that’s why we’re all here.
On the one hand, the big dig is part of how we got the Green Line extension. On the other hand, as far as public transport goes, the big dig is the biggest missed opportunity in state history. We had a chance to connect the south and the north of Boston by rail, finally, and we totally blew it. Sure, it would’ve cost more, and there was a big scandal about the cost so it might’ve been politically hard. But in the long term, we lost out immensely. The fact that we didn’t put in a rail connection should be the biggest scandal of the big dig.
If housing prices go up by more than 2.5% on average in a town, that means the prop tax rate for that town the following year actually goes down to keep growth of prop tax revenue at 2.5%. However, the main thrust of the diary is totally true, and we should be funding gov’t services with income tax, not property tax.
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I wonder if Deval will come out for a local income tax levy? It would probably be an accounting nightmare but would be much more palatable to the public than further property tax increases.
In many suburbs, overrides have become fairly common (for both town and school district spending), so property taxes have been increasing beyond Prop. 2 1/2 limits.
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Tommylo is right on about the problems of local control and the lack of statewide or regionwide planning. 40s and 40r are good ideas, but one of the problems is that since they are incentive plans, many suburban communities may simply decide that doing smart growth isn’t worth the incentives. I think regional planning agencies with some real power are a good idea, but their creation would probably be strongly resisted.
There is a nuance that many people miss about “increased single family property tax bills”.
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If a town is building new housing, that housing is almost always high-end. If a town has an average single family proeprty of $200k, but all new developments are in the $500k range, it is possible that although the “average single family tax bill” has gone up in value by 20% over the past three years, that is because a lot of high end housing was added to the tax rolls.
I’ll second the calls for smarter urban and extra-urban planning in this thread, but I’m not sure the anxiety over housing is as big a seller as we’re making it out to be. For instance, drgonzo says,
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So… we’re supposed to go to homeowning voters and promise we’ll bring their home values down so they won’t have pay as much in taxes? High prices are a problem for those who don’t own and who might like to buy one day, but are good for those who do own and might like to sell one day.
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Similarly, high prices mean not only fixed supply but high demand. If population loss continues, at some point soon demand and hence prices go down. End of problem, right? Don’t blame speculators unless you can point to tons of real estate held vacant and off the market. If “speculators” are living in their property, that frees up housing units elsewhere.
High home prices help those who are trying to ‘flip’ property, but don’t much help those who actually need a place to live. My parents bought their house for 100k, a four bedroom with a good sized yard. It’s now worth 400k, and they would like to sell it (since the kids have all left) but can’t because they’d be lucky to buy a 1 bedroom apartment now for 400k.
I’m not sure why owners of a 4BR house with a yard wouldn’t be able to sell and buy a house of similar size and quality in a comparable neighborhood, but you do have a point that on one hand paper gains don’t do a lot of good if the cost of buying in the area goes up as well. Then again, a lot of people cash out and retire elsewhere. Still others aren’t looking for capital gains at selling time but value the increased equity in their home, which they can borrow against or know they can borrow against in the future. I think it’s smart for politicians to begin addressing property taxes in a rising market – and one does well to adress housing supply in a general, econ. development kind of way – but campaigning against rising home values per se seems like a nonstarter to me.
I think you misunderstand the way that most homes are financed. Increasing real estate value has benefitted almost anyone who has purchased real estate at any time during the last 10 years, because the rising value has given them a big chunk of equity.
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Decades ago, that equity may have been locked up and unavailable, but in recent years, the easy availability of home equity credit has unlocked that value in a big way.
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The above poster was correct that any proposal that sounds like “reduce real estate taxes by reducing real estate prices” is political suicide.
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That’s not to say that it is no small issue for first-time buyers that values are climbing. It’s just that once those first-time buyers finally realize that it is cheaper to buy than rent, even if they haven’t saved tens of thousands for a downpayment, their perspective shifts dramatically.
Opening a satellite campus is not affordable or an option for most schools who are already struggling with budgets and are raising tuition yearly (All of which are non-profits -even the private schools). Besides several schools already have sattelie campuses, and this hasn’t happand. Your logic just isn’t there.
My response to this got a bit too long for a comment, so I posted it separately:
Housing Prices and Property Taxes
Springfield, Holyoke, New Bedford, Fall river, Lawrence, Lowell, Brockton etc. But how do we get people to move there. Very simple make a requirement that every college and university that receives property tax exemptions (all do) should open a satellite campus in each of those cities. Yes Harvard, Boston College, Boston University and MIT , you too. Students will migrate there and compannies will expand closer to these schools. Transportation , is of course, crucial but there is sufficient access now to get started.
Opening a satellite campus is not affordable or an option for most schools who are already struggling with budgets and are raising tuition yearly (All of which are non-profits -even the private schools). Besides several schools already have sattelie campuses, and this hasn’t happand. Your logic just isn’t there.
I’ve got a better idea. If you want people to live in Springfield, Holyoke, New Bedford, Fall River, then how about the state making it attractive to live there?
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Those cities are all experiencing huge problems, mostly related to crime and the quality of life. There’s a reason the housing prices are low — because there are an overabundance of things like homeless, group homes, substandard subsidized housing, mentally ill, criminals, sex offenders, etc. living in those towns.
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I don’t know if anyone has noticed this but there is a movement in Massachusetts — and also the country in general — to recreate cities without the bad stuff that has typically gone with them.
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Commerce has shifted to the suburbs with the advent of malls — a climate-controlled, behavior-controlled shopping environment. Some places in the west are even creating outdoor malls that look like Main Street used to look — except that they have the legal right to prevent things like panhandlers from hitting up the customers.
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Suburbs are also courting business away from urban centers. But only the high-return businesses — leaving things like trash transfer stations and noisy industrial complexes behind. Why? Because a lot of businesses pay quite a bit in taxes but consume few services. Who wouldn’t want a win-win scenario like that?
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Unfortunately this state’s policy has been to ignore the cities. Mitt Romney’s “urban strategy” is to make sure the poor are all in an urban area, and then decrease funding because poor people deserve what they get, they should only have what they can afford (which is not much).
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The biggest reason that urban areas are unattractive is that the economic segregation has made them predominately the realm of the poor, and the poor are generally poor for a reason — because they are often ill-equiped to live in society. How do you make it more attractive to live among the poor? Well, close monitoring and enforcement of rules, coupled with educating the poor to stop behaving so badly.
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I could care less if the people living next door to me were living in Section 8 housing and collecting welfare, but the odds are that if I have a Section 8 tenant next door I’m going to have to deal with quite a bit of crap. And when I call anyone in the city about it, the response is usually “sorry, we don’t have the staff to handle that kind of problem”.
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I’m putting my hopes on Deval Patrick because he understands that this state needs an urban strategy. Dense living is the way of the future for this state, but every one of our policies makes dense living a sucker’s bet, because there is never any support to handle the disadvantages of dense living — like higher school expenses, more crime, more litter, more noise, etc.
You can’t tax nonprofits. Property tax or otherwise.
Sure you can, you can sign PILOT agreements with them.
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Yeah, it’s not a “tax” – it’s “in lieu of taxes” 🙂
No one seems to be mentioning one other cause for the high cost of housing. The market is highly regulated here. Zoning restrictions, multiple boards that get to review projects, state laws designed to encourage, or discourage, certain projects and various local concerns all contribute to higher costs.
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Want to build affordable housing? Get rid of the regulations and let builders do what they want. You’ll see plenty of affordable housing then.
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Of course, you’ll also see acres of unsightly tract housing, the loss of open space and more kids than your school system can handle.
Joel Garreau, in his book Edge City, talks about the two irresistible forces of exurban development: Development will flow outwards, with low density, until it runs into “insurmountability” – which basically means development has run out of space. When that happens, it jumps over to the other side.
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The most classic example if insurmountability is San Francisco: mountains to the south, ocean to the west, bay to the east, bay and mountains to the north. San Francisco can’t grow outward at low density, so it grows inward with higher density. Edge cities pop up along the 280, the 580, the 880, and the 101. Each of those edge cities is eventually hemmed in by mountains.
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Here in Massachusetts, we have a different kind of insurmountability, and it’s one Garreau addresses in his book: We’ve run out of unincorporated land, and we have History. Boston is surrounded by land that, for practical purposes, is all used up and almost as closed to new development as a bay. Little towns that have been here since colonial times, and zone to preserve their character and history. We’re never going to see an office park in Concord Center, for example. It’s the home of the start of the revolutionary war, of Louisa May Alcott and Nathaniel Hawthorne and Ralph Waldo Emerson and so on and the residents just aren’t going to allow it to turn into modern development. Ditto for Walden Pond. How about Lincoln and Weston? They don’t have that sort of history, but how easy do you think it’s gonna be to get those towns to give up their forested semi-rural living? They won’t even let MBTA busses stop!
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So think of it as our New England version of insurmountability. Low density development has to jump over, into the towns outside 495 that are less resistant to development. And, as with the bay area, it spurs high density development inside the city.
because it is these issues that have steered me in Tim Murray’s direction. Whenever I have heard him speak it is about improving transportation and affordable housing (linked to cities & towns reliance on the property tax).
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He really has been able to grasp all of the issues that effect voters & particularly working families & young people and knows them in depth.