The good news for city homeowners is that they’re worth more.
The bad news is, it’ll cost them.
The total value of residential properties grew for the sixth straight year in 2017, City Assessor Alexcy Vega said in a report to city councilors, allowing them to set tax rates. The growth this time was led by condominiums, which added 17 percent to their average value, and single-family homes, which added 12.3 percent, Vega said.
The tax rates fell into place after the council first agreed not to shift any of city’s overall property tax burden between residential properties and commercial/industrial properties, leaving in place a formula that imposes the maximum burden on commercial/industrial properties allowed by law.
The tax rate on residential properties will drop to $13.68 per thousand, a 64-cent decline. Nevertheless, the owners of the average single-family and multifamily homes and condominiums will pay more taxes this year because of their increased property values.
For single-family homeowners, the tax bill will increase an average of $237, to $3,287. The tax bills will go up 7.8 percent even as the tax rate goes down because the value of their homes increased an average of $27,300 last year, to $240,300.
That’s a 12.8 percent leap that more than wipes out the dip in the tax rate. The increase in the value of the average single-family home last year comes on top of a $20,854 increase the year before, a 25 percent increase in all over the two years that homeowners can reap when they re-finance or sell.
Among all residential properties, condominiums saw the greatest increase in values last year and so will see the biggest tax increase this year. The value of the average condo increased $17,600, to $119,500. The new worth will bump up the property tax bill $176, to $1,645.
The value of commercial and industrial properties also increased last year, but less dramatically than residential values. The average commercial property added $27,000 in value, to $401,100, which will add $138 to its annual tax bill. The average industrial property added $79,600, to just under $1.2 million, which will add $428 to its tax bill.
The bigger bills come even as the tax rate on commercial and industrial properties drops $1.73 per thousand of value, to $29.09 per thousand.
Still, the City Council’s unanimous vote to assign commercial and industrial properties a disproportionate share of the city’s total tax levy means those properties will pay about one-third of the levy this year, even though they own only a fifth of the city’s total property value.
All together, property in Lawrence was valued at $4.2 billion last year, up $400 million. The increase came with new development and as demand drove up prices on existing development. Assessors determined property values based on sales in 2017.
Vega could not be reached Thursday. But last year, following a similar spike in property values, he suggested that the growth may be occurring because the city is largely built out, meaning there is little room for new construction and so the supply is relatively fixed. Vega noted that more people who have been renting in Lawrence are buying homes as the city’s economy improves, spiking demand and driving up values.
There was $62 million in new construction in Lawrence last year, which will contribute $1.7 million in property taxes this year and dampen the tax increase for existing homes and businesses.
Deborah Carberry, a real estate agent who does most of her business in Mount Vernon, said demand for homes is as strong as ever.
“It’s crazy right now,” Carberry said. “When I left my office today, there was nothing in Mount Vernon on the market.”
She added that the image of the city — where the schools are in receivership, the state controls spending at City Hall and some neighborhoods serve as a regional marketplaces for illicit drugs — has been burnished recently, and unexpectedly, by its response to the gas disaster of Sept. 13. The city met the challenge, she said.
“The gas disaster showed that big time,” she said. “It showed there is community in Lawrence, how people take care of each other and come together.”
Also adding to Lawrence’s appeal for homebuyers is that its residential property taxes are among the lowest in the state, driven in part by the City Council’s decision over the years to require businesses to pay more. At last week’s council meeting, Councilor Pavano said requiring businesses bear a disproportionate share of the tax burden year after year keeps new ones from relocating here.
The $3,287 bill the owner of the average single-family home in Lawrence will pay is $1,300 less than the owner of a similar home in Methuen will pay, Vega’s report to the council shows. It’s $1,319 less than the owner of a similar home in Haverhill will pay, the report shows.
In Lawrence, property tax bills for the third quarter of the fiscal year go in the mail Dec. 31.
This article provided by NewsEdge.