Vol. II No. 22 11/15/2021
Town Square: Residential Exemption
A reader, John Hart, kicked off this discussion with his letter to SU in the last issue and now the conversation continues. Join in.
From: Peter Strauss
Like John Hart, I deeply value Stockbridge Updates, am a town resident who wouldn't benefit from a residential property tax exemption and support appropriate measures to care for the town's less-wealthy residents. But your editorial about the exemption issue didn't discuss the inequities the town's formula for assessing real estate values creates for small lot owners (especially around the lakes), and consequent favoritism for the wealthy best able to support our neighbors. A residential exemption would disproportionally increase financial stress for the town's less wealthy second homeowners. Like our national taxes, the way in which real estate valuations in Stockbridge protect the wealthy from appropriate taxation is remarkable.
Stockbridge real estate property tax assessments have two components, house value and land value. The town determines the former by individual valuation, and the latter by a formula based on plot location and plot size. Thoroughly reviewing the tax rolls impressed me that (understandably enough given the potential for challenges) house evaluations may be somewhat understated throughout the town. The land valuation formula effectively penalizes all small plot owners, by valuing any acreage above two acres at a uniform $25,000 per additional acre. Markets don't work that way. A flat, essentially unvarying, addition of about $400,000 per lot to the assessed land value of every lot enjoying lake frontage (whether 40 feet or 400) introduces a further distortion for many.
Applying these formulas to our lakeside home on .22 acres produced a land valuation of about $750,000 — in effect valuing our land at more than $3,000,000/acre. The impact's no different for other small lot owners around the lake. The real estate market recently made clear how unrealistic this valuation is, when a 0.9-acre lot near ours enjoying much larger frontage sold for under $1.5 million. For a 5-acre lot, adding $400,000 for frontage to about $3,000,000 for the first two acres and $75,000 for the remaining three suggests a total land value of about $3.5 million — roughly the implicit per acre valuation of our 0.22 acres.
Assessor Blay, whose openness and integrity I deeply admire, told me these effects result from state controls. But changing the ratio of house value to land value, and realistically valuing how larger acreage contributes to overall land values, would better rebalance the tax structure, in ways that lessened its present disproportionate burden on the owners of all the town's small homes and small lots.
Editor's note: Any taxpayer who believes his assessed value is unfairly high can appeal to the Commonwealth. There are directions online or our Town Assessor can help you.
From: Jonathan L. Stern
I first came to the Berkshires over sixty years ago. My parents rented and later owned a summer cottage in Stockbridge, before they retired to live full-time in Great Barrington. My family and I have owned our own second home in Stockbridge for over a decade. I write in support of the residential tax exemption.
The impact of the residential tax exemption is not in dispute. As Clarence Fanto put it in his October 22, 2021 piece in the Eagle, the exemption "would lower the tax burden for less-affluent homeowners, while increasing bills for most others, especially seasonal residents... the exemption would shift the tax burden to second-home owners and owners who have rental properties but live elsewhere."
As Michael Wise described the exemption in his thorough and thoughtful analysis in the March 31, 2015 post to the Edge, the exemption would "mak[e] the property tax progressive, shifting its impact from lower-valued homes toward more expensive properties and second homes." And, as you have put the point, in the November 1, 2021 edition of Stockbridge Updates and most recently in your November 6, 2021 column in the Eagle, the exemption would make Stockbridge "more affordable for lower-income folks, elderly residents on fixed incomes and owners of less-expensive homes. It eases the tax burden on those who need relief the most."
While my family would not benefit financially from the exemption, I submit to you and to your readers that we would benefit in other equally important, if not more important, ways. Every resident of Stockbridge, part-time or full-time, benefits when the community takes care of those who are "distressed," to quote Select Board member Patrick White, and who have "fewer resources," as your correspondent John H. Hart put it in his recent letter in Updates. Every resident of Stockbridge, part-time or full-time, benefits when we help make it possible for the people who work in our community to live in our community.
Every resident of Stockbridge, part-time or full-time, benefits when we come together, again to quote Mr. Hart, "to help each other." No measure like this is perfect, and I recognize that the residential tax exemption is not without its flaws, again noting Mr. Wise's thoughtful commentary in the Edge. That said, the balance here favors adoption of the exemption, and I would urge that the town take action to enact it.
From: Barney Edmonds
I am flabbergasted by the recent decision of our Select Board!
Roxanne and Chuck both voted to reject a proposed change to our real estate taxes which would have allowed limited residential real estate tax exemptions for those who qualify. Dismissing the Residential Exemption without discussion, expert evaluation, or a trial run, they seem to dismiss a whole segment of our population — full time residents.
Their primary commitment must be to the citizens of Stockbridge, the men and women who elected them. Rather than worrying about a small tax increase for those who can afford one, they should be working to find ways to ensure our elderly, fixed income, and lower income residents can stay here in their homes.
Patrick voted yes to tax exemptions because he supports not just the idea of helping residents keep their homes but the policies which can help make it happen.
What did the Great Barrington Select Board do when the issue of tax exemptions came before them? Rather than vote it down because they feared change, they voted to hire an outside consultant to advise them.
Without considering the big picture, Roxanne and Chuck seem to be influenced by the old maxim — no new taxes. But this exemption is not a new tax (the Commonwealth has allowed it for half a century). It is a way to help ensure that our tax burden is just, and fair, for all.
Stocking up for winter. Note: my wildlife photos are taken with a 600mm lens. These animals are a very safe and far distance away. Photo: Jay Rhind.