Framingham Mayor Denies Millions in Tax Relief for 11,000 Homeowners

At the City Council meeting on October 8, 2024, the City Council continued its discussion of the Residential Exemption. The expectation was that the topic would be thoroughly discussed and its implications for property owners would be made clear, so that City Councilors could make an informed decision on its adoption.

As explained in a prior article published on October 8, 2024, the Residential Exemption, enacted by the state in 1979, is an option under property tax classification MGL c. 59, sec. 5C that shifts the tax burden within the residential class from owners of moderately valued residential properties to the owners of vacation homes, higher value homes and residential properties not occupied by the owner, including apartments and vacant lands.

The City Council discussion of the Residential Exemption was cut short, because the Mayor exercised his option to block its adoption, as he is empowered to do under the state law, which specifies that the Mayor is the gatekeeper on Residential Exemption adoption. It does not get adopted without his approval.

The exact language of the state law is:

"Section 5C. With respect to each parcel of real property classified as Class One, residential, in each city or town certified by the commissioner to be assessing all property at its full and fair cash valuation, and at the option of the board of selectmen or mayor, with the approval of the city council, as the case may be, there shall be an exemption equal to not more than 35 per cent of the average assessed value of all Class One, residential, parcels within such city or town;..."

The major problem with the Mayor’s decision to reject adoption of the Residential Exemption is that all of the reasoning he used to justify it is flat out wrong. He failed to grasp the basics of the Residential Exemption and how it is tailormade for Framingham, the scale of its tax relief, and he produced a series of red herrings to confuse people.

Let us examine those in order.

1. The Mayor Failed To Grasp The Basics

He first argued incorrectly that the Residential Exemption just applied to “communities that have a lot of seasonal housing, where people don’t live there year round”. See the video below:

A Confused Framingham Mayor Thinks the Residential Exemption Only Applies to Seasonal Communities

However, that is only half the picture. Here is the full picture.

The Massachusetts Division of Local Services provides comprehensive information on the Residential Exemption, which is easy to read and understand. It includes a simple explanation, which takes a few minutes to read:

Living with the Residential Exemption

One of the questions addressed there is: “What communities does the Residential Exemption best serve?”, and the answer is:

“Residential Exemption Communities

Residential exemptions are voted annually. Communities that choose to adopt the exemption often have the following characteristics:

• Large cities or towns with many nonowner-occupied properties like apartment buildings
• Resort communities with many seasonal residents”

Communities in the first category, which have adopted the Residential Exemption include: Boston, Brookline, Cambridge, Chelsea, Everett, Malden, Somerville, Waltham, and Watertown.

Communities in the second category are: Barnstable, Nantucket, Provincetown, Tisbury, Truro, Wellfleet.

It is obvious that the Mayor was not informed on the simple basics of the Residential Exemption, and that Framingham fits perfectly into the first category.

2. The Mayor Hid the Scale of Property Tax Relief for Framingham Homeowners

The Mayor also completely left out any discussion of the real impact adopting the Residential Exemption would have on Framingham.

As it turns out, the impact is huge:

1. More than 90% of the 3,000 condominium homeowners in the city would see their annual property taxes lowered by an average of about $470. The total property tax relief would be roughly $1.4 million for these homeowners.
2. Each of the 8,150 single family homeowners, whose properties are assessed at less than $700,000, would see their annual property taxes lowered by an average of $190. The total property tax relief would be roughly $1.5 million for these homeowners.

These are the homeowners in the city who have been punished the most by job loss, post-pandemic inflation and skyrocketing water bills. Broad-based financial relief for moderately valued owner occupied residential properties is a major goal of the Residential Exemption and it clearly is tailormade for Framingham, especially at this time.

The City Assessor, who was at the City Council meeting, has all the property tax data and could easily have laid out this financial impact picture, but the Mayor was so intent on killing adoption of the Residential Exemption that the simple facts of the real financial impact on the community were hidden from public view.

The above numbers were extracted using the Assessor’s Online Database and the state Division of Local Services Residential Exemption Calculator.

There are further impacts.

Owners of residential properties assessed at more than $700,000 would see increased property taxes if the Residential Exemption were adopted. That group includes about 5,400 homeowners whose properties are assessed at more than $700,000, and owners of the large rental properties in the city. The homeowners are residents with the much higher income streams, which allowed them to purchase more expensive homes, and who have been able to invest in retirement plans and have pretty much the maximum social security income, if they are seniors. They are much less affected by inflation and by large water bills. Further, they are the homeowners who got the lion’s share of property tax relief when the annual tax levy increase was held to 0% in each of the first 4 years Framingham was a city.

They are in strong financial shape and have the greatest ability to help ensure that those in the city who are less well off can make ends meet.

Finally, there is a worry that rents across the city could increase significantly due to adoption of the Residential Exemption, but simple estimates show that is not the case.

A useful tool in figuring this out is the city GIS Mapping tool. Using it for a typical case, the residential rental complex The Green at 9&90 can be analyzed. One of its 4 major blocks of apartments is assessed at $43,852,000, and adopting the Residential Exemption would raise its tax rate from $12.46 per thousand dollars of assessed value, to $13.64, so its tax bill would increase by $51,745. The block has 306 apartments, so if the landlord passed on the tax increase to tenants, the monthly rent increase/apartment would be $14 on monthly rents in the range $2,000-$3,000. So, the effect would be tiny.

A similar analysis for lower rent complexes, like those at Interfaith Terrace, yields a monthly rent increase of less than $4.

There is no worry regarding impact on renters.

3. The Mayor Produced a Series of Red Herrings to Help Torpedo the Residential Exemption

The Mayor, in his confusion, also tried to claim that because the Residential Exemption was not aimed explicitly at seniors, it should not be adopted:

A Confused Framingham Mayor Criticizes the Residential Exemption For Not Protecting Seniors

It is true that the Residential Exemption is not aimed specifically at seniors. It is designed to provide property tax relief to homeowners with moderately valued homes, who in Framingham, have been doubly hammered by inflation and skyrocketing water bills.

But the facts remains that there are many other means to provide property tax relief to seniors (and veterans), as can be seen at the city website.

The Mayor completed his symphony of confusion and misinformation by producing two red herrings to confuse people about the effects of the Residential Exemptions:

1. Rich people living in low assessed value homes would get an unfair amount of tax relief.
2. People living in expensive homes who were property rich, but income poor would be in trouble.

The first category hardly bears rebuttal, as there is no data the Mayor produced, and it is unlikely that there are many ‘millionaires living in studio condominiums’.

The other worry has superficial credibility and has been raised many times in the past. Again, the Mayor provided no data on the matter, but it turns out to be easy to make some simple estimates of that population of property rich but income poor homeowners.

First, there is the property tax deferral program which allows seniors with incomes less than $60,000 to defer 100% of their annual property taxes on their homes at 1% interest. The city recovers the deferred taxes plus interest when the property sells. I looked into this a while back with a public records request and found that the city only had 5 seniors taking advantage of that program.

So, this suggests that property rich but income poor seniors is a very small demographic, and they are well taken care of by existing relief programs.

Further, using US Census date, 13.2% of the Framingham population is over 65, so of the 5,400 homeowners who would experience increased taxes if the Residential Exemption were adopted, about 700 are seniors. From US Census data, 7% of seniors in Framingham live below the poverty line, so at most 7% of those 700, or 49 would be in stressed circumstances. That is likely an overestimate, but it is a small number which the city can address by making sure this group has taken full advantage of all of the senior tax relief programs available.

I am also sure that the 11,150 homeowners who would benefit from adoption of the Residential Exemption would be happy to contribute to the Elderly & Disabled Tax Fund which the city has specifically arranged to handle senior homeowners in straitened circumstances.

Surely, a handful of seniors who own expensive homes, but may have a low income stream can be assisted by the city in order to provide $2.9 million in property tax relief to homeowners with moderately valued houses.

Think of what that money will do to also boost the local economy!

The wonderment in all of this is why the City Council did not point out the misinformation pouring forth from the Mayor and why they did not demand a full impact picture from the City Assessor.

It is entirely troubling that the City Assessor’s office, which has powerful data analysis and presentation capabilities, did not make the financial impacts on residents completely clear, and provided exactly nothing for the City Council to consider, other than a faint endorsement of the Mayor’s presentation.

That was another major information management failure, which can be added to those discussed previously in:

Two Information Management Failures of Framingham City Government

The conclusion from all of this is that a clear pattern of misinformed Mayoral decision making is emerging.

This complete Mayoral miscue on the Residential Exemption, with a lack of critical engagement by the City Council, does not stand out as an isolated case.

Framingham has seen:

1. Virtually no progress on solar installations
2. The continuing absence of a 5-year, charter mandated, Capital Plan
3. The clear intent to unfairly shift increased water & sewer costs onto renters
4. The dilution of the state Student Opportunity Act funds intended to help low income, special needs and immigrant children
5. The fiscal cliff created by deploying one time reserves to fund recurring FY25 budget expenses.
6. The year long delay on an easy expansion of citywide curbside composting.
7. The deferral of vital roof replacements in the schools.
8. The inexorable decay of city roads.
9. The lack of transparency on the Community Center and Downtown Garage development projects.
10. The rush to overdevelop Nobscot in ‘response’ to the state’s desire to increase housing density adjacent to transportation lines, when Nobscot has no such adjacency.
11. …

The Mayor’s administration continues to make mistake after mistake.

When will this end?