Varying home assessments emerge as latest tax battle at Boston City Council hearing
As Boston Mayor Michelle Wu tries again to push through a controversial property tax relief measure for homeowners, the latest battleground has emerged over what some city councilors and residents view as inequities in home value assessments.
While expected to be a hearing that focused largely on the mayor’s expanded home rule petition that seeks to shift more of the city’s tax burden onto businesses, the Boston City Council instead devoted hours of discussion to the Wu administration’s tax assessment process — and how it led to residential tax spikes.
Bills delivered in recent weeks have hit property owners with shocking tax hikes on the order of 21% on average for single-family homeowners.
Monday’s discussion was initiated via a hearing order co-sponsored by Councilors John FitzGerald and Erin Murphy, who voted against the mayor’s first tax shift home rule petition, but changed their vote to support her latest petition last fall.
A number of councilors peppered Wu administration officials with questions about assessment quirks, such as why similar homes were valued differently on the same street or in the same neighborhood, and shared data that raised questions about whether the city was under-assessing residential properties in wealthier neighborhoods, while over-assessing homes in lower-income neighborhoods.
“What I worry about when I see these numbers is that they’re really on the backs of the family neighborhoods,” FitzGerald, who shared the data, said. “I want to make … sure this is done fairly.”
FitzGerald compiled and shared assessment data that showed the “median average of the whole of someone’s home value” went up roughly 4.6% across the city, but valuation spikes varied significantly in different neighborhoods.
In prosperous Back Bay, home values rose on average by 4.66%. In Chinatown, value increases were also on par with the citywide average, at 4.73%, he said.
The spike was higher in the South End, at 9.03%, FitzGerald said, and hit double-digits in lower-income neighborhoods like Roxbury and Dorchester, where separate zip codes in those areas saw increases that ranged from 10.2% to 13.2%.
When home values increase through assessment, property taxes do as well.
“I just don’t want to be hurting the middle class in the city, because that’s what we know has always been driven out over the past many years,” FitzGerald said.
Nicholas Ariniello, the city’s assessing commissioner, said the year-over-year assessment differences, resulting in varying home values and spikes that lead to higher property taxes, are due to “market activity” and “demand.”
There’s more of a market for homes that sell for $500,000 than those that are selling for north of $2 million, he said.
“You will see higher increases in overall percentage in places where housing prices in general are low, or you have a lot of lower value homes that allow for more transactions, so there are more people in the market that can buy those things,” Ariniello said.
Gregory Maynard, executive director of Boston Policy Institute, submitted written testimony that shed light on a national assessment problem, also seen and studied in Boston, that researchers have dubbed “vertical inequity.”
“As the value of a single-family home or condo rises, property tax assessments do not rise proportionately, resulting in lower effective tax rates on higher valued homes,” Maynard wrote by way of describing it.
Councilors Julia Mejia and Ed Flynn both raised similar questions about how new development, such as when a Starbucks or luxury apartment building is added, can drive up property values and taxes in a neighborhood — thereby negatively impacting longtime residents and leading, in some cases, to gentrification.
Ariniello said if the new development made the neighborhood “more desirable,” it would likely increase the value of someone’s home and what they could sell it for.
“When their value goes up, then their property taxes are going up,” Ariniello said. “It’s possible for there to be development that drives down property values, which would then make someone’s taxes go down. In general, most of our development has made the city worth more money, not less money.”
Fielding other councilors’ questions about varying valuations, Ariniello said the city assesses homes at 100% of the market value, but copped to discrepancies — which sometimes lead to corrections through homeowner-filed abatement requests — by saying that the process is driven only by data that the city has on hand.
The city assesses roughly 181,000 real estate parcels each year using a “computer-assisted mass appraisal” system, using data from a parcel’s property record card, he said, that lists information like what a home last sold for, its square footage, renovations, rooms, and what its exterior foundation is made of.
There may be instances where information changed and wasn’t documented, he said, which could lead to varying assessments with similar nearby properties.
“We have no right to go and inspect a person’s home,” Ariniello said.
Inspections are often part of the requested abatement process. Last year, he said, there were 1,200 abatement applications, and he expects more this year.
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The mayor’s home rule petition, which is “90%” identical to what has passed the Council and House of Representatives twice but stalled both times in the Senate, drew a lengthy discussion as well.
Wu’s legislation, which could be voted on by the City Council as soon as Wednesday, also includes new provisions to expand the senior homeowner tax exemption.
It further has a built-in backup plan for the first time, that sees the city ask to issue rebates from surplus funds to homeowners who received a residential exemption this fiscal year, should the Legislature not approve the requested new tax rates by March 1.
Ashley Groffenberger, the city’s chief financial officer, when asked by Councilor Brian Worrell, said no cut to the city’s $4.6 billion budget, which grew this year by 8%, would result in lower property taxes, unless it were to be matched with an equal reduction to the property tax levy.
City Councilors Brian Worell and Gabriela Coletta Zapata listen during Monday’s hearing. (Nancy Lane/Boston Herald)
