An old and previously rejected idea has been raised again in several recent op-eds, including in an “It’s Not That Simple” viewpoint column in the Edge last week: The Residential Exemption, whereby up to 35 percent of the value of primary residences could be exempted from property taxes. The good intention is to help make housing more affordable for lower-income families and individuals.
Unfortunately, adopting the residential exemption would have the opposite effect. Those most in need of affordable housing can’t afford to purchase – they rent. The residential exemption would increase the tax burden for most landlords, which would result in higher rents. About one-third of Great Barrington’s households are in rental properties, and most of those properties are not landlord-occupied. Good public policy should encourage the construction of more affordable rental housing, not discourage it.
Proponents of the residential exemption cite the special legislation that Provincetown received from Boston exempting rentals for full-time residents, and say that the same could be sought for Great Barrington. The problem with creating carve-outs to mitigate the effects of bad public policy is that the bad policy remains. The larger the share of the population that is shielded from that policy, the higher the effective property tax rate becomes for those who are unshielded.
Who would see their property taxes go up? Second homeowners and primary homeowners with higher-than-average property values. What’s the problem with that? Leaving aside that there is not necessarily a correlation between owners’ income and the assessed value of their property (particularly acute for many seniors), the residential exemption proposal ignores the reason that ALL Great Barrington property owners already pay the highest rate in South County: the budget allocation formula for the Berkshire Hills Regional School District. That formula, which is standard for regional school districts throughout the Commonwealth, is largely based on student headcount, and systematically discriminates against taxpayers in towns that are relatively “kid-rich, property-poor.”
Great Barrington property owners currently pay an effective school tax rate that is 3.5 times higher than Stockbridge property owners, due to the fact that Stockbridge has higher per capita property values and a higher percentage of second homeowners (who are unlikely to send students to our local school district). Approximately 70 percent of all property taxes paid in Great Barrington go to the school budget, compared to less than 30 percent in Stockbridge. The most effective way to reduce property tax rates (or at least to restrain their growth) in Great Barrington would be to welcome the building of more second homes, more expensive homes, and more commercial property. The residential exemption would have the opposite effect.
Finally, proponents of the residential exemption argue that “this is about defending the sense of community.” But the biggest impediment to good community relations with Stockbridge is the differential tax rate concerning the school budget. Should we now inject a differential tax rate into the heart of the Great Barrington body politic? There might be much occasion among neighbors for feelings of resentment, allegations of unfair treatment, and special pleadings. With our current flat rate, we have none of that.
I trust that the Great Barrington Select Board will continue to refrain from implementing a policy that runs counter to its proponents’ stated goals of affordable housing, property tax moderation, and community solidarity.
Chip Elitzer is a resident of Great Barrington.
