| Subject: Re: 55 and over housing |
Author:
Dennis
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Date Posted: 15:05:24 11/03/03 Mon
In reply to:
Karen
's message, "55 and over housing" on 05:23:40 11/03/03 Mon
Well, Karen, you have put your finger on it as usual.
During the hearings on the golf course, an environmental group came to tell us that (shock and surprise!) incremental new housing actually costs a town money as opposed to adding to its tax coffers. We stifled the urge to say, "No shoot, Sherlock!" and then went on to raise some questions about their statistical methodology. They said the ratio was $1.15 of expense to $1.00 of revenues, an E:R of 1.15:1. We believed that, given the likely tax levy on those kinds of homes, as well as the likely number of public-school students, that the E:R collectively would be much less -- maybe even less than 1:1. And that it was bound to be much less than for conventional, by-right housing, which is the real point, after all.
[You see, you just can't yank somebody's property rights away by saying, "You can't build there, get lost!" That would be larceny on a grand scale!]
Anyway, I know you know where I'm going with this: Many (not all) homes that do not have children in the system pay for themselves in tax revenues (or have an E:R ratio of less than 1:1) And almost all homes that do have children in the school system "cost the town money" (or have an E:R greater than 1:1).
To see why this is so, assume the following facts, which are probably not exactly correct but are probably pretty close.
--- Tax rate of $12.25/1000.
--- Per-pupil cost of $7,000. ($7,000 times 4,000 students is $28 million.)
--- Per household cost of $2,500 for everything else (police, fire, trash, roads, seniors, parks, etc.). ($2,500 times 10,000 households is $25 million.)
--- $28 million plus $25 million is $53 million -- That's about what out operating budget (general fund) is.
So any home that has a tax valuation less than about $200,000 is not paying the $2,500 per household ($2,500 divided by .01225 is a little over $200,000). Well, since there are about 90% of households that do not have children in the school system, there are a lot of households that do pay more than they "cost the town", as well as a lot of other households that don't pay more than they "cost the town."
On the other hand, if a household has just one child in the system, then the cost is $2,500 plus $7,000 or $9,500. A home would have to have a tax valuation of $775,000 to pay that much in taxes.
If all this seems a little cold-blooded, let me say the following. Any young couple (or whoever) who starts a household first does not have kids in the public schools, then does (maybe), then does not again for a long while. That's just the way it goes. And if you live in a town that has relatively low property values (like ours) but does not get 90% of its school funding paid for by the state (like Lowell and other cities), then you really do have to worry about these things. We simply cannot afford to have lots of the type of development that attracts families with school-aged kids.
So -- This is why we love those over-55 projects so much! Some tax revenue, low costs! Is there a market for it? Wouldn't know -- that's the developers' problem. In the meantime, we get some credit for 40B, and are therefore able to defend ourselves better, and the land in question is taken off the conventional-maybe-even-affordable market, where we know the E:R is way over 1:1.
Does that help? ;-)
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