On August 10, The Boston Globe published the following op-ed by SPOA member Chris Lehman examining Boston’s property tax structure and the continuing debate over Mayor Michelle Wu’s proposal to shift a greater share of the city’s property tax burden onto commercial property owners.
Drawing on recently published data from the Lincoln Institute of Land Policy, the piece looks at how Boston’s residential and commercial property tax burdens compare with those of other cities and revisits the Legislature’s decision not to approve the mayor’s proposed tax shift. We are reprinting the op-ed below in its entirety.
Wu took on two senators over propertytaxes. New data saythey were right.
New data show Boston homeowners are already among the least-taxed in the country, while businesses carry a disproportionate share of the city’s property tax burden.
by Chris Lehman
Boston Mayor Michelle Wu recently endorsed primary challengers to state Senators Will Brownsberger and Nick Collins, two longtime incumbents. She has supported the two senators’ competition seemingly because they opposed her proposal last year to shift more of Boston’s property tax burden from homeowners onto commercial property owners.
Her argument during the high-profile falling out was that the senators were failing to protect Boston residents from rising property taxes that would make homeownership in Boston unaffordable. But the assumption that affordability is being hampered by high residential property tax rates is not supported by the latest independent data.
A recent study by the nonpartisan Lincoln Institute of Land Policy found that Boston homeowners have one of the lowest property tax rates of any major city in America. The city’s effective tax rate on owner-occupied primary residences is just 0.51 percent — less than half the national average. Among 53 major US cities, Boston places fifth lowest for property tax rates on median-valued homes (roughly $700,000).
Boston is also an outlier locally. An analysis of property taxes among Boston suburbs with more typical tax structures shows that, holding home values constant, suburban homeowners pay about 60 percent more in property taxes than their city counterparts.
Those numbers make it difficult to argue that Boston homeowners are overtaxed or that shifting even more of the city’s tax burden onto commercial property is necessary. They also make Wu’s decision to wield the issue as a political weapon against Brownsberger and Collins particularly difficult to defend.
What’s more, Boston’s effective tax rate on commercial property is already more than five times the effective tax rate on owner-occupied homes — by far the highest ratio of any city in the study. That relative disparity is no accident. It is the result of a tax system deliberately structured to favor residential property owners.
Commercial properties account for only about one-third of Boston’s assessed property value, yet, because the city applies the maximum 175 percent classification shift allowed under state law, commercial taxpayers shoulder about 58 percent of the city’s entire property tax levy. That amounts to an estimated $797 million annual subsidy from commercial property owners to residential taxpayers, reducing the average single-family homeowner’s tax bill by nearly 25 percent, or roughly $2,000 each year.
On top of that 25 percent subsidy from commercial property owners, Boston also has a residential exemption that reduces qualifying homeowners’ 2026 tax bills by as much as $4,353. Combined with the city’s questionable property value assessment practices (particularly on its highest-valued homes), many owner-occupants effectively pay taxes on only a fraction of their home’s market value.
Not surprisingly, these practices have drawn legal scrutiny. A pending class action lawsuit alleges that commercial property owners who exercised their constitutional right to appeal assessments were subjected to a retaliatory policy that artificially increased their assessed values and their property tax bills through unlawful “discretionary adjustments.”
Preferential treatment of the residential sector has broader financial and political consequences. Because commercial taxpayers absorb so much of the cost of increased city spending, homeowners are largely insulated from it. When residents are shielded from the true burden of government expenditures, there is less pressure for fiscal discipline and less incentive to scrutinize spending decisions.
Meanwhile, the commercial real estate sector is under extraordinary financial strain. Office vacancies remain historically high, remote work continues to suppress demand, and downtown office buildings are selling for a fraction of their pre-pandemic values.
Asking this shrinking tax base to shoulder an even greater share of Boston’s tax burden risks accelerating its decline. Higher taxes will further depress commercial property values, discourage investment, contribute to more distressed sales, and make Boston less competitive for employers. The cumulative effects ultimately ripple through restaurants, retailers, workers, and neighborhoods that depend on a healthy downtown economy.
None of this suggests Boston’s affordability challenges are not real. But the evidence shows that property taxes on homeowners are not the driving force. Boston already provides residential property owners with one of the most favorable property tax structures in the country.
Brownsberger and Collins opposed Wu’s tax shift not because they ignored homeowners but because they recognized that Boston cannot solve its affordability challenges by weakening the commercial tax base that supports city services. Expanding housing supply — not shifting ever-greater tax burdens onto struggling businesses — would be a more effective and durable solution.
The Legislature rejected the mayor’s proposal twice because lawmakers understood that reality. Turning that vote into a campaign issue does not change the underlying financial dynamics. If anything, the Lincoln Institute’s findings reinforce why Brownsberger and Collins got this one right.