Somerville Speakup Line: Somerville Real estate tax – Bill h. 4582 – Board of Alderman – Please explain the logic that the tax will not affect current residents

Dear Billy T and Somerville Speakup Line,

Dear Board Of Alderman,

I write to you ALL because, as a current Somerville resident and home owner, I am frustrated. I feel the board has misled the public with regard to impact to current owner residents. Numerous times, the BOA stated current residents will not need to pay the tax, but is it your belief they will be affected?  However, Somerville’s own report in fact indicates the contrary and states all current owner will potentially be negatively affected by lower sale price offers.  It is also supported by basic econ 101 macro economic principles and empirical evidence studies.

Please, can every Board of Alderman, clearly go on the record on this issue. Answer the questions below and provide all the facts to the public.  To the best of my knowledge, this issue was never publicly addressed and I personally brought this up in many emails with members of the board and never received a stance or opinion on this issue.

This is not my opinion but based on Somerville’s own consultant report on the tax, macro economic principles and empirical evidence studies.

If a private investor buys the property from a resident, and “the tax is imposed on the buyer, the buyer will simply reduce their purchase offer ” (RKG Associates – REAL PROPERTY TRANSFER FEE IMPACT ANALYSIS Somerville, Massachusetts October 2017).

“Data show that Toronto’s 1.1% tax caused a 15% decline in the number of sales and a decline in housing prices about equal to the tax” (Journal of Economic Geography Advance Access published May 6, 2011)

Questions for Somerville’s Board of Alderman

1. Do you believe that it is acceptable for current residents to indirectly pay for the tax, through possible lower home sale prices?  A large portion of Somerville is non-owner occupied so moving forward a large portion of the buyers will inevitably a large portion of the buying market will be paying the tax and thus reducing their purchase offers.  This is in line with economic theory, Somerville’s own report and empirical evidence. If so why was this not discussed or disclosed to the public?

2. You clearly state that current residents will not pay the tax, but will current residents be indirectly impacted by the tax through lower offer prices?

a. If you believe current residents will not be affected, do you have a source of information that counters Somerville’s own report by RKG, empirical evidence and economic theory.  And if so, why was why was this issue not disclosed to the public?

b. Will this assessment hold true when the real estate market is a buyer’s market?

3. Were you even aware of this issue during deliberations? I wrote many emails to all Board Of Alderman highlighting this issue. If you were aware of this issue, why was this issue not disclosed to the public in any  of the numerous fact sheets and articles written by Board of Alderman in support of the tax?

Sincerely,

Somerville Resident

Matt Griesbach

One thought on “Somerville Speakup Line: Somerville Real estate tax – Bill h. 4582 – Board of Alderman – Please explain the logic that the tax will not affect current residents”

  1. All great questions. And there are dozens more…. The City doesn’t inform homeowners/taxpayers/residents about any of the things on the drawing board that will affect them. If the transfer tax passes and funds affordable trust fund, combined with downzoning 3 units properties to 2 units thereby subtracting hundreds of thousands of value, and eliminating rental units by the thousands in the midst of a housing crisis, further exacerbated by the tenants right of first refusal, buyers will be running for the Medford hills. Developers who are purchasing most of the multifamily stock will never put their millions on the table, and patiently wait 7 months to see if they can purchase or not!!! The entire market can change in less time than that. Why are tenants allowed 7 months? Because of the ‘right to assign’ which is the backdoor by which the Trust Fund will procure your personal property. Who is this good for??? NO one. It is good for Mayor Joe and his ambitions to get his hands on 6000 rental units cheap. It is not coincidental that all these initiatives work to diminish property values when the city is looking to acquire multi family units. When RB is downzoned, property assessment and taxes are not being reduced even though the city’s rezoning is desicrating the real value of your now 2 family never to be 3 units, never for that property owner to develop that third unit, 3rd floor, or expand, or even to seel that potential to a developer. Add the ludricrous 7 month process that first right of refusal involves, and Somerville multi-family values will experience a tremendous nosedive. RB owners ought to be suing the City – its very like eminent domain. The city does not want property owners to realize the full scope of its agenda. Its insideous and its purposeful – there is no protection for private property owners when the city’s goals reign supreme. People have got to wake up, show up, and stand up to protect yourself. The city is out to screw you – and the last thing they want is to inform you about it!

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