You can agree or disagree with me on thinking commercially taxing 4+ residential units is a good or bad idea, but the Chamber of Commerce thinking it is a good idea? Other then being a boon to local lawyers who would be doing condo conversions of every multi-family in the City of Worcester to retain the residential rate, how can a local Chamber of Commerce supporting an increase of taxes like this be in support?
If you are thinking that it will provide relief for the Commerical tax-payer, it will not. In fact it will only hurt the Commercial base even more. Let me give you an example of someone sitting on a vacant parcel or large building that is being taxed commerically. Right now they will have a difficult time getting another Commercial entity to buy in. Their best bet is to find a residential developer to come in and convert the place to housing like L Farber on Fremont, Biscuit lofts off Shrewsbury Street or the Chevalier Furniture Building on Water Street. Although all of these buiilding converted from Commercial to Residential, they stayed on the tax rolls and may even supply more texes with their increased value.
Now lets assume you have a new system that would tax all of these developments commercially, you just lost all your for profit development groups. What is left? Your non-profits. In other words, if this were to become a reality and you had a large commercial parcel or building, you most likely buyer will have to be a non-profit and the City of Worcester will get no taxes.
Everyone will convert their multis to condos and we scare away larger for profit developers of residential real estate. Can someone tell me how this will provide relief for any tax-payer, commercial or residential?
Same Time Next Year
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It’s been nearly a year since I wrote about the problems that come from
having 11 bosses who are not on the same page about anything, as well as
suggestion...
4 months ago
4 comments:
That threw you for a loop huh?
Fact. Converting to condos = more taxes.
Fact. For devel groups its unlimited opportunity.
Fact. Non-profits are not interested in expanding. I work for a big one.
Fact. Relief = raise the rents.
Whats so hard to understand?
Bill:
1. I dont think condo conversion will help b/c sometimes when you break real estate up into more pieces, the pieces (individual condos) are worth more than the sum of the whole (large apt block) and as a result more property tax revenue will flow from a 6 condo building than from the same 6 unit apt building.
2. Right now, I cant see any private for profit residential dev'er coming in and building or rehabbing a large apt block.
a. the market isnt there
b. they cant cmpete w/CDC's
c. Mason St lays fallow
3. Yes an newly rehabbed factory/residential conversion will yield more taxes for the city, but what about the $13,000 education costs for every child in that factory/residentail conversion...which will more than negate any add'l tax revenue.
4. We also have zoning that precludes residential use in a commercially zoned area....i.e. no use variances.....unless they get one of these overlay districts or one of those other special district (the name escapes me) like the downtown & bio tech park is part
5. What are the opinions out here about teh state going along with this...as it does need state approval, too.
I also wonder how rooming houses would be classified if thsi went through. Would each room be considered a so called rental unit.
Obviously each room does not meet the definition of an individual dwelling unit, as many/most all rooming house have common area bathrooms & kitchens.
If I owed a 4 unit building and this came to pass, a street smart landlord might combine the 4th unit with one of the other units to get down to 3 units and afer the dust settles....viola a 4th unit some magically re-appears.
If this goes through, IMO, it would be the camel getting his nose under the tent......tehn a few yrs down teh road......guess what happens............non owner occupied 3 deckers would be moved to comm. rates. This always happens with gov't. In 1972 the state lottery was ONE that's ONE weekly drawing.................now 4 decades later look what it has morphed into.....I still have some of those old weekly tickets in a drawer somewhere.........awaiting Amer. Pickers or maybe take em to the Pawn Shoppe :)
Anonymous
How does converting to condos raise more taxes??? Lets just say you have a four family that is taxed residentially now assessed at 200K.
If it gets taxed commerically your taxes double. You go from 3000 per year to 6600.
If you turn the 4 unit into condos, the assessed value will be pretty close to the same? Have you seen the market values of conjdos in a multi-family? It is even worse then multis. I think there could be an arguement to even lower the assessed value.
The key is, however, as condos you would keep you overall tax bill in the 3000 range. I ask again how would a condo conversion =more taxes.
Bill
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