The residential tax exemption (RTE) was adopted last year with the goal of improving affordability in Concord. Unfortunately, the reality is that the RTE makes the town less affordable for those who are most vulnerable. Why? Because the RTE shifts tax burdens onto rental units which tend to be occupied by those with lower incomes.
To understand the impact of the RTE, consider this: Homeowners of $1.5 million dollar homes are being subsidized by half-million-dollar rental units. While we might wish that landlords wouldn’t pass these tax increases on to tenants, 80 to 90 percent of increases are eventually passed on to tenants, according to research from the MIT Center for Real Estate.
Similarly, some supporters of the RTE have called it a “progressive” tax. However, at least two analyses — one by the town of Lexington and one by the Massachusetts Budget and Policy Center — have concluded that the RTE is a “regressive” tax because it shifts taxes to rental units. The Lexington study concluded that the RTE “may appear to be progressive when considering only owner-occupied single-family homes,” but “when considering all types of residential properties and their occupants, it is not progressive.”
While the RTE was well-intentioned, it not only fails to accomplish the town’s goals of improving affordability and diversity, but it is a regressive tax that increases the tax burden on rental units, which house the town’s most vulnerable population. Clearly it would be unconscionable to reinstate the RTE this year and Concord must find better solutions.
Gwen Acton
Elm Street
