TDLR: $19 million in free cash and an additional $2.5 million from a reserve fund is going to be used to decrease property tax collection in 7-1 City Council vote. Opponents argue money could be used for more important things - universal pre-k, affordable housing, rent relief

It’s a great program!

How do all these council-members think we'll believe them that this is only for this year, when they do this every single year, and there's no particular reason it couldn't happen this year? This is Huang's first year, and this would've been a perfect time to "change".

They could literally have said, at any time in the last few months since our new Manager got the job, "Hey, I'd like this money to go towards rent relief instead of tax relief, could you present an alternative that has that when you draft your proposal?" And then, they could vote no on this one knowing there's an alternative.

Do you know if this includes landlords/those who rent their properties?

I don't understand the argument that "house rich" people with lower incomes need the help. Do home equity loans not exist?

We already have the cheapest property taxes in the metro by a lot, so can kinda see the opponents side.

It only applies to people who occupy their primary residence, so no.

see below

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oh whack :(

any property tax increases, I generally need to pass on at some point in the form of increased rent. While I haven't increased the rent on my property in a couple years, if/when property taxes go up, eventually the rent would. This at least enables me to put that off for a couple more years. So, there's that.

many, many long time residents who have lived in their homes for many decades can only afford to keep living in them because Cambridge property taxes are so low. These folks live on fixed incomes with no way to repay a home equity loan.

Perhaps a reverse mortgage then? If they've been here for decades, they should qualify.

Let's say that you're a long-time Cambridge resident that owns a house purchased for $150,000 that's now worth $850,000. You aren't rich. Your property taxes are about $2,300/year which helps you "afford to keep living" here.

Let's say that you're a long-time Arlington resident that owns a house purchased for $150,000 that's now worth $650,000. You aren't rich. Your property taxes are $7,300/year - over 3x more than Cambridge.

Cambridge's housing values are high, but not that high that it would put a burden on low-income, long-time residents more than anywhere else. Yes, fixed-income people can face issues with things like property taxes, but arguing that Cambridge should have low property taxes because of some low-income, long-time residents feels like using them to justify low taxes for the majority of rich people.

Why not exempt low-income residents from property taxes if that's the issue? Oh, because rich people want low property tax rates. What about long-time, low-income renters (or any renters)? I guess they can be pushed out.

I do agree that the house-rich might not be able to afford to take out a home equity loan and pay the monthly on that to pay for property taxes. At the same time, Cambridge's property taxes aren't burdensome at all compared to basically anywhere else - even with the high property values. You'd have to find a $200,000 place to get property taxes as low as Cambridge's. So practically everyone in Massachusetts is paying higher property taxes than the Cambridge resident with an $850,000 place.

While a home equity loan might not work, a reverse mortgage might. Reverse mortgages don't require monthly payments and aren't repaid until the borrower moves or dies. If you have an $850,000 place, maybe you can take out a $400,000 reverse mortgage and when you die the bank sells the house and gets their money. You can argue that means their kids might not get to inherit the home, but then why are we concerned about giving some people's kids a windfall while others struggle to make rent?

Likewise, Cambridge could simply allow long-term residents to defer property taxes until a property is sold. Cambridge could even use the city's great credit rating to borrow the money they need today at a very low rate and simply charge the resident that low rate (maybe 1-2%). 20 years later, the resident might have accumulated $50,000 in property taxes and owe $60,000 with the interest and those inheriting the property could decide whether they wanted to pay the taxes and keep the property (getting an $850,000 property for $60k is a steal) or sell the property to pay the taxes (inheriting $790k is pretty sweet too). Plus, given that the owner would have had to pay $50,000 of that $60,000 along the way, that's all money that would be coming out of the kids' inheritance anyway (well, except for the $10,000 in interest). But the point is that Cambridge could just solve the issue for long-term, low-income residents without resorting to lower property tax rates.

The house-rich argument doesn't make sense as an argument to keep Cambridge property taxes low. That doesn't mean that people don't face issues. However, there are much better ways to deal with the issues and there's almost no one in Massachusetts that faces a lower property tax burden than a Cambridge resident in an $850k place - if they're struggling with property taxes in Cambridge, it's not like they'd "be able to stay" in any other town and just got unlucky with Cambridge. Again, that's not to say that people don't struggle, but that it's not a struggle that's unique to Cambridge. Likewise, there are simply better ways of dealing with the issue. Cambridge could simply defer the taxes and use its borrowing power for current spending - and then recoup the taxes later.

I rather hate this way of phrasing the argument. Basically, every town and city does this. Free cash represents money that was allocated but not spent. And it is typically used against the next years budget.

If we want rental relief, that should just be put in the budget at whatever level is appropriate and funded the way we fund all other budget items.

Basically, we should include in the budget all the items that are desired (affordable house, pre-k, rent relief, whatever) and separate that from the source of funds.

It would be far more effective to just pay that money out to the renters directly then than the property owners

You don't need any income to take out a reverse mortgage. If you own a $1.5m home, you're a millionaire. Pretending you can't pay Cambridge's very low property taxes is ridiculous.

Tax rates, per $1,000 of value:

| Cambridge | Boston | Brookline -- | -- | -- | -- Residential | $5.86 | $10.56 | $10.19 Commercial | $10.38 | $24.92 | $16.56

Does anyone know what the Cambridge rates are so low compared to neighboring cities? Is it because we have so much pharma and tech offices and labs?

High property values and lots of alterative revenue streams.

I'm on the outer 495 belt these days, our tax rate is $15.77. Valuations keep going up, so likewise so do our taxes. If property prices take a dip they will cry poor and raise the rate again, this has been the cycle for many years. Tax rate used to be around $12.

Cambridge discloses the top 10 list of biggest tax payers, and it's who you expect. So there might be some correlation

This entire comment thread is a convoluted argument for some form of indirect rent control

It’s not just the house rich though. Raising property tax appreciably will lower the value of homes in the city which could have severe effects.

What is the evidence for this? In principle I understand the argument, but in the real world, where have property tax increases in the 5-10% range been definitively linked to home value decreases? Furthermore, what are the severe effects of small decreases in home value?