11.22.22 FY23 Classification Final Hearing UPDATED — File 22-1921

City of Somerville FY2023 Classification Hearing November 22, 2022 Adoption of Tax Levy percentages for FY 2023 Somerville Board of Assessors Francis J. Golden, MAA Chief Assessor & Chairman Michael Flynn, MAA Richard Scanlon, MAA Katjana Ballantyne Mayor

Recommendations 1. A motion that the City Council adopts a minimum residential factor of 85.0125, the legal minimum for the City of Somerville for FY 2023. 2. A motion that the City Council accepts the provisions of Chapter 59, section 5C approving a residential exemption of 35% of average assessed value for owner occupied properties for FY 2023. 2

Comparison of State Form LA-4 FY22 & FY23 USE CODE DESCRIPTION FY 2022 FY 2023 FY 2022 FY 2023 PARCEL COUNT PARCEL COUNT ASSESSED VALUE ASSESSED VALUE 101 SINGLE FAMILY 2,308 2303 $2,216,809,500 $2,357,203,800 102 CONDOMINIUM 6,514 6667 $4,420,923,419 $4,751,278,705 104 TWO FAMILY 4,900 4858 $5,045,722,200 $5,268,290,720 105 THREE FAMILY 2,228 2214 $2,876,422,000 $2,944,176,080 109 2 OR MORE RES. BUILDINGS/1 LOT 74 68 $127,415,900 $117,852,900 111-125 APARTMENTS 4+ 664 668 $2,148,673,635 $2,360,846,005 130-132,106 VACANT RES. LAND 171 171 $19,271,500 $20,573,200 300-393 COMMERCIAL 596 596 $2,197,734,149 $2,653,965,569 400-452 INDUSTRIAL 95 91 $452,559,300 $433,342,800 012-043 MIXED USE RESIDENTIAL 257 253 $724,991,255 $767,941,288 MIXED USE COMMERCIAL $175,885,487 $176,402,406 501-508 PERSONAL PROPERTY 574 584 $446,617,260 $450,822,700 TOTAL REAL & PERSONAL PROPERTY VALUE 18,381 18473 $20,853,025,605 $22,302,696,173 900-990 EXEMPT REAL ESTATE 390 388 $2,297,225,407 $2,361,468,525 3

Parcel Count Changes FY22-FY23: • Added 153 residential condo units (73 conversions) • 35 fewer two-family properties • 21 fewer three-family properties 4 Market & Growth Growth Only Single family 6% 1% Two & Three family 6.8% -35% Condominiums 7.5% -29% Multi – Family 4+ Units 9.8% 0.30% Commercial 20.8% 64% Industrial -4.2% -78% Average Valuation Changes FY22-FY23

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Average Assessment Changes By Neighborhood: Single Family FY22 Value FY23 Value % Change 22-23 1001 West Somerville South & Cambridge Line 1,091,200 1,153,476 5.71 2001 Ward 2 Union Square South 987,973 1,049,622 6.24 3001 Ward 2 Cobble Hill n/a n/a 4001 West Somerville 1,269,290 1,359,134 7.08 5001 Winter Hill North 714,503 759,714 6.33 6001 Ten Hills 802,469 845,262 5.33 7001 Winter Hill & Magoun Square 820,467 874,828 6.63 8001 Central, Spring & Prospect Hill 983,244 1,045,211 6.30 9001 East Somerville 722,234 768,621 6.42 City Average 960,489 1,023,536 6.56 6

Average Assessment Changes By Neighborhood: Two Family FY22 Value FY23 Value % Change 22-23 1001 West Somerville South & Cambridge Line 1,083,064 1,144,109 5.64 2001 Ward 2 Union Square South 1,054,526 1,107,894 5.06 3001 Ward 2 Cobble Hill n/a n/a n/a 4001 West Somerville 1,163,987 1,226,546 5.37 5001 Winter Hill North 761,794 809,339 6.24 6001 Ten Hills 824,344 884,552 7.30 7001 Winter Hill & Magoun Square 886,212 930,530 5.00 8001 Central, Spring & Prospect Hill 1,027,245 1,080,090 5.14 9001 East Somerville 843,294 888,616 5.37 City Average 1,029,739 1,084,457 5.32 7

Average Assessment Changes By Neighborhood: Three Family FY22 Value FY23 Value % Change 22-23 1001 West Somerville South & Cambridge Line 1,437,229 1,479,081 2.91 2001 Ward 2 Union Square South 1,401,583 1,443,945 3.02 3001 Ward 2 Cobble Hill n/a n/a n/a 4001 West Somerville 1,398,323 1,443,109 3.20 5001 Winter Hill North 1,131446 1,165,438 3.00 6001 Ten Hills 992,680 1,004,940 1.24 7001 Winter Hill & Magoun Square 1,133,403 1,169,744 3.21 8001 Central, Spring & Prospect Hill 1,303,580 1,341,886 2.86 9001 East Somerville 1,097,091 1,125,195 2.56 City Average 1,291,033 1,329,800 3.00 8

Average Assessment Changes By Neighborhood: Condominium FY22 Value FY23 Value % Change 22-23 1001 West Somerville South & Cambridge Line 793,894 826,038 4.05 2001 Ward 2 Union Square South 686,879 727,776 5.95 3001 Ward 2 Cobble Hill 641,314 644,395 0.48 4001 West Somerville 778,605 819,142 5.21 5001 Winter Hill North 534,107 596,932 11.76 6001 Ten Hills 619,435 648,775 4.74 7001 Winter Hill & Magoun Square 562,490 584,709 3.95 8001 Central, Spring & Prospect Hill 694,417 729,163 5.00 9001 East Somerville 589,420 620,366 5.25 City Average 678,680 712,656 5.01 9

FY23 Growth Use Type New Growth Valuation Tax Levy Growth Single Family 11,546,000 Condominium 66,602,527 Two & Three Family 37,269,800 Four+ Units 125,068,399 Mixed-Use Residential & Other 36,881,453 Total Residential 277,876,279 2,828,781 Commercial 477,178,187 8,040,452 Industrial 9,703,800 163,509 Personal Property 76,076,270 1,281,885 Total Commercial, Industrial & Personal Property 577,791,977 9,735,794 Total Real & Personal Property 840,834,536 12,314,627 10

Major Contributors to New Growth Valuation u/vanhoosear on Flickr 11 Assembly Row New Valuation FY23 Tax (Estimate) Grand Union Blvd – Corporate Office Under Construction – 61% Complete $19.9M $334,894 74 Middlesex Ave Assembly Row (Office/Lab) Under Construction – 1% Complete $79.6M $1,340,552 Cambridge Crossing – Union Sq - BoyntonYards 250 Water Street – Inner Belt (Office/Lab) Under Construction – 65% Complete $52.9M $893,038 20 Prospect St - Union Sq Apartment /Retail Under Construction – 33% Complete $42.3M $430,656 101 South Street – Boynton Yards (Office/Lab) Under Construction – 65% Complete $46.2M $779,274

FY23 Tax Levy & Classification FY23 Levy Limit: $ 215,317,042 FY23 Proposed Levy : under levy limit $ 214,502,415 FY23 Debt Exclusion $ 6,674,013 FY23 Proposed Levy: $ 221,176,428 FY22 Levy: $ 200,839,916 Tax Levy Change: $ 21,151,139 Excess Levy Capacity: $ 814,627 FY23 Change: 10.53% Commercial Levy: $ 64,464,966.41 Residential Levy: $156,711,461.59 As Assessed With 175% Classification Commercial Value Percentage 16.6551 29.1464 Residential Value Percentage 83.3449 70.8536 12

Tax Levy Share: FY23 70.85% 22.21% 3.54%3.40% Residential Commercial Personal Property Industrial FY22 Tax Levy Share (For Reference) Residential: 72.53% Commercial: 19.92% Industrial: 3.80% Personal Prop: 3.75% 13

Option 1: No Classification & No ResX • Single Tax Rate: $ 9.92 Use Type FY22 Average Value FY23 Average Value FY22 Average Tax FY23 Average Tax Tax Change FY22-FY23 CONDO 678,680 712,656 $6,536 $7,070 $534 1 FAMILY 960,489 1,023,536 $9,250 $10,154 $904 2 FAMILY 1,029,739 1,084,457 $9,916 $10,758 $842 3 FAMILY 1,291,033 1,329,800 $12,433 $13,232 $799 4-8 FAMILY 1,776,072 1,854,005 $17,103 $18,392 $1,289 COM/IND 2,981,201 3,011,030 $28,709 $29,869 $1,160 NOT RECOMMENDED 14

• Residential Rate: $ 8.43 • Commercial Rate: $17.35 Use Type FY22 Average Value FY23 Average Value FY22 Average Tax FY23 Average Tax Tax Change FY22-FY23 CONDO 678,680 712,656 $5,626 $6,008 $382 1 FAMILY 960,489 1,023,536 $7,962 $8,628 $666 2 FAMILY 1,029,739 1,084,457 $8,537 $9,174 $637 3 FAMILY 1,291,033 1,329,800 $10,703 $11,213 $510 4-8 FAMILY 1,776,072 1,854,005 $14,724 $15,629 $905 COM/IND 2,981,201 3,011,030 $50,233 $52,241 $2,008 Option 2: With Classification & No ResX 15 NOT RECOMMENDED

• Residential Rate: $10.34 Commercial Rate: $17.35 RECOMMENDED Option 3: With Classification & ResX Use Type FY22 Average Value FY23 Average Value FY22 Average Tax FY23 Average Tax Tax Change FY22-FY23 CONDO 678,680 712,656 $3,246 $3,458 $212 1 FAMILY 960,489 1,023,536 $6,112 $6,673 $561 2 FAMILY 1,029,739 1,084,457 $6,816 $7,303 $487 3 FAMILY 1,291,033 1,329,800 $9,474 $9,840 $366 4-8 FAMILY 1,776,072 1,854,005 $14,407 $15,260 $853 ResX Value Reduction: $378,203 Tax Savings of $3,910.62 16 (ResX included for condo, 1, 2, 3 & 4-8 family)

FY23 TAX IMPACT DEBT EXCLUSION IS ABOVE & BEYOND THE LEVY LIMIT - THE DEBT EXCL DIVIDED BY THE MAX LEVY = THE RATIO PERCENTAGE APPLIED TO EACH USE THE AVERAGE TAXES OF EACH USE MINUS THE RESX TIMES THE RATIO = DEBT EXCLUSION IMPACT PER USE DEBT EXCLUSION FISCAL YEAR 2023 WITH RESIDENTIAL EXEMPTION WITHOUT RESIDENTIAL EXEMPTION ESTIMATED RATES / FY23 ESTIMATED AVG VALUE USE FY23 USE FY23 EST RES TAX RATE $10.34 FY22 LEVY 214,502,415 FY22 LEVY 214,502,415 DEBT EXCLUSION 6,674,013 DEBT EXCLUSION 6,674,013 EST COM TAX RATE $17.35 MAX LEVY 221,991,055 MAX LEVY 221,991,055 EST RES EXEMPTION $378,203 RATIO 0.03006 RATIO 0.03006 101 - SINGLE FAMILY $200.61 101 - SINGLE FAMILY $318.18 101 AVG VAL 1,023,536 102 - CONDOMINIUM $103.97 102 - CONDOMINIUM $221.54 102 AVG VAL 712,656 104 - TWO FAMILY $219.55 104 - TWO FAMILY $337.12 104 AVG VAL 1,084,457 105 - THREE FAMILY $295.82 105 - THREE FAMILY $413.39 105 AVG VAL 1,329,799 111- 4 TO 8 UNIT $458.78 111- 4 TO 8 UNIT $576.35 111 - 4 TO 8 UNIT 1,854,005 FY23 ESTIMATED TAX INCREASE FY22 ESTIMATED TAX INCREASE FY21 ACTUAL TAX INCREASE WITH RESIDENTIAL EXEMPTION WITH RESIDENTIAL EXEMPTION WITH RESIDENTIAL EXEMPTION USE FY23 USE FY22 USE FY21 101 - SINGLE FAMILY $560.74 101 - SINGLE FAMILY $341.00 101 - SINGLE FAMILY $413.00 102 - CONDOMINIUM $212.24 102 - CONDOMINIUM $39.00 102 - CONDOMINIUM $172.00 104 - TWO FAMILY $486.67 104 - TWO FAMILY $253.00 104 - TWO FAMILY $339.00 105 - THREE FAMILY $365.50 105 - THREE FAMILY $515.00 105 - THREE FAMILY $382.00 111- 4 TO 8 UNIT $852.79 111- 4 TO 8 UNIT $1,010.00 111- 4 TO 8 UNIT $650.00 17

FY22 Residential Tax Community Comparison Municipality Residential Tax Rate Comm/Ind/ PP Levy Share Average FY22 Res Value ResX Percentage ResX Savings Average Residential Tax Bill Waltham $11.14 58.75% $693,240 35% $2,703 $5,020 Boston $10.88 58.32% $867,964 35% $3,305 $6,138 Cambridge $5.92 65.44% $1,476,852 30% $2,623 $6,120 Somerville $10.18 27.47% $1,027,123 35% $3,660 $6,796 Watertown $13.25 38.76% $757,802 30% $3,012 $7,029 18

Exemptions & other options to Reduce RE taxes: • Other than ResX • Reside at property • City allows double the allowed amount for exemptions depending how much their tax bill increased from previous year Exemption Requirements Income limits Asset limits Exemption amount Other requirements #FY22 Elderly 17D Over 70 -- $69,691 $303 -- 64 Elderly 41C Over 65 $24,385 (S) $36,576(M) $48,768 (S) $67,067(M) $1000 -- 37 Blind 37A Blind certificate -- -- 500 -- 19 Veterans 22 VA disability cert over 10% -- -- $400 up to 100% Amount depends on disability 94 Deferral 41A Over 65 Constitutes lien payable upon transfer/death $86,000 -- 100% gaining 2.5% interest Consent other lien holders (mortgage) 8 Senior work off Over 60 -- -- Up to $1500 Contact council on aging 8 19