Letter: Student Rental Industry Should Pay Its Fair Share of Taxes
Parking in front of student rental property Photo: Art Keene
I read in local papers that a house in Amherst that is valued at $508k will have a tax increase of $432, based on that higher valuation.
That is my home value and tax increase, exactly.
The rise in my home value is likely a result of our town’s skewed supply/demand problem, with an endless demand for homes to be converted to student rentals at $1200++ per bed; and regular phone calls to homeowners, offering cash for owner-occupied homes. Those buyers outbid families who can’t compete with that market value. So our population of families that live in owner occupied homes is falling, our school population is declining, as is the number of voters in town..
My tax increase, resulting from student slumlords driving up prices makes think that the Town Council is missing the boat in not classifying the student rental industry in Amherst a commercial enterprise that should bear more of the tax burden.
My house is profitable for the town. Our kids are out of the schools, I don’t need an ambulance to drive my drunken self to the hospital, I do not drive 1000s of cars that are destroying our roads.
Student slumlords have no children in the school system, but they are expensive customers for the town. Even though they drive up taxes, they degrade neighborhoods. Why should they not be responsible for all their true costs?
Landlords insist that the student housing industry here be more recognized as an economic driver. Fine, but how about recognizing them as totally different than owner-occupied houses, and tax them at a special commercial rate?
We appreciate when one of our colleges donates to the town, aside from payment in lieu of taxes (PILOT). But their PILOT and gifts are paltry, compared to other college towns. Local and distant student landlords are not about to help build our public works building, or a South Amherst fire station, or repair our many miles of deteriorated roads. That’s why taxes exist, and though we don’t want to punish our tiny sliver of taxpayers that are businesses, how about getting what is fair from our so-called student rental industry?
Ira Bryck
Ira Bryck has lived in Amherst since 1993, ran the Family Business Center for 25 years, hosted the “Western Mass. Business Show” on WHMP for seven years, now coaches business leaders, and is a big fan of Amherst’s downtown.
Dear Ira,
Our taxes are rising for various reasons, but it is not the consequence of “resulting from student slumlords driving up prices”. The town has a budget obligation that they need to pay for and if you didn’t notice, they have to do it without taxes from only about 50% of the land inside the Amherst Borders. This is because the town of Amherst has land that is categorized as Conservation and Recreation in addition to Academic land that doesn’t pay their share of taxes.
Charging rentals more in taxes is like treating renters as second class citizens. Should we use a red marker to identify where the rental housing is as well? Using a red marker has been frowned upon in the past so I am going to argue that we don’t repeat that behavior.
Our town has substantial capital expenditures that it is obligated to pay for using tax revenue, this includes but it not limited to a new school, new department of public works, new fire station and more. If you want to try to raise more tax dollars to pay for these expenses, I want to encourage you to try to find ways to add to our commercial base with small to medium sized businesses that generate taxable revenue. We should have an adequate pipeline to a entrepreneurial world with the colleges and university, how do we capture that?
Please stop targeting landlords with your opinion pieces because it is landlords who provide shelter from the elements for the people who live in our town. We, the landlords, are trying to balance revenue from the rents to pay our contractors and vendors to maintain the property while upholding our municipal obligation in paying for taxes. Hopefully after we have managed all of our expenses, water, sewer, taxes, insurance, maintenance, capital expenditures, deferred maintenance and debt service, we have funds left over to eat or to create more housing opportunities in our community.
DEAR TOM – PLEASE EXCUSE MY CAPS, I AM NOT SCREAMING, I AM JUST RESPONDING TO YOUR POINTS,DELINEATING YOUR STATEMENTS FROM MY RESPONSES. YOUR FRIEND- IRA
Our taxes are rising for various reasons, but it is not the consequence of “resulting from student slumlords driving up prices”.
THE INCREASE IN TAXES IS BASED ON COMPARABLE SALES IN 2022. THIS IS NOT A COVID HOUSEBUYING BUMP. IT ISN’T NEW CONSTRUCTION. IT IS WHOEVER IS BUYING THE HOUSES FROM OUR DECLINING 12 MONTH NON-STUDENT POPULATION. IF THE NEWCOMERS WERE FAMILIES, WE POSSIBLY WOULD NOT HAVE SUFFERED FROM A BIG DROP IN VOTING RECENTLY. I CONTEND THAT HIGH UP ON THE LIST OF POSSIBLE REASONS ARE HOUSE PURCHASES BY THE PEOPLE THAT ARE OFFERING ME AND MANY OTHERS CASH FOR OUR HOUSES. THE FACT THAT VOTING IS GOING DOWN WHEN THOSE HOMEBUYERS ARE MOVING IN POINTS TO STUDENT TENANTS, WHO DON’T VOTE HERE.
The town has a budget obligation that they need to pay for and if you didn’t notice, they have to do it without taxes from only about 50% of the land inside the Amherst Borders. This is because the town of Amherst has land that is categorized as Conservation and Recreation in addition to Academic land that doesn’t pay their share of taxes.
YES, I KNOW THAT, AND SHARE YOUR PAIN. BUT LIKE THE NATURE. ALSO, THE PILOT PAYMENTS MADE BY OUR COLLEGES AND UMASS ARE SEVERELY LOWER THAN MOST COMPARABLE COLLEGE TOWNS.
Charging rentals more in taxes is like treating renters as second class citizens. Should we use a red marker to identify where the rental housing is as well? Using a red marker has been frowned upon in the past so I am going to argue that we don’t repeat that behavior.
I DISAGREE THAT CHARGING A HOUSE THAT IS A BUSINESS INCOME PRODUCING PROPERTY AT A HIGHER COMMERCIAL RATE IS TREATING STUDENTS LIKE SECOND CLASS CITIZENS. YOUR ARGUMENT IS ILLOGICAL. I AM TOLD BY ANOTHER STUDENT LANDLORD THAT IT WOULD BE AGAINST MASSACHUSETTS LAW TO CLASSIFY A STUDENT RENTAL PROPERTY AS A COMMERCIAL TAX CLASS. THAT IS A BAD LAW.
Our town has substantial capital expenditures that it is obligated to pay for using tax revenue, this includes but it not limited to a new school, new department of public works, new fire station and more. If you want to try to raise more tax dollars to pay for these expenses, I want to encourage you to try to find ways to add to our commercial base with small to medium sized businesses that generate taxable revenue. We should have an adequate pipeline to a entrepreneurial world with the colleges and university, how do we capture that?
AS YOU KNOW, MY WORK OVER THE 30 YEARS OF LIVING IN WESTERN MASS HAS BEEN ECONOMIC DEVELOPMENT THROUGHOUT PIONEER VALLEY, MOSTLY BY SHARPENING THE PLANNING AND COMMUNICATION OF OUR REGION’S MANY FAMILY BUSINESSES. BUT IN MY SPARE TIME, I REGULARLY APPROACH BUSINESS OWNERS FROM OTHER PLACES AND TRY TO CONVINCE THEM TO OPEN IN AMHERST. I’VE CONNECTED MANY OF THEM WITH SPECIFIC COMMERCIAL LANDLORDS HERE. I’VE RUN FREE SEMINARS FOR THE AMHERST CHAMBER OF COMMERCE. ADMITTEDLY, I HAVE NOT MUCH SUCCESS IN LURING NEW BUSINESSES HERE, BUT NEITHER HAS OUR TOWN’S NON-EXISTENT BUSINESS DEVELOPMENT SPECIALIST. THAT BUDGET ITEM SEEMS TO VANISH REGULARLY,
Please stop targeting landlords with your opinion pieces because it is landlords who provide shelter from the elements for the people who live in our town. We, the landlords, are trying to balance revenue from the rents to pay our contractors and vendors to maintain the property while upholding our municipal obligation in paying for taxes. Hopefully after we have managed all of our expenses, water, sewer, taxes, insurance, maintenance, capital expenditures, deferred maintenance and debt service, we have funds left over to eat or to create more housing opportunities in our community.
I HAVE NOTHING AGAINST PEOPLE WHO OWN STUDENT RENTAL HOUSES AND KEEP THEM IN GOOD SHAPE, COMMUNICATE WITH THEIR TENANTS THEIR EXPECTATIONS OF NEIGHBORLY BEHAVIOR, AND DO NOT OVERCROWD AND PRICE GOUGE. THERE’S A REASON WHY UMASS STUDENTS EXPRESS THEY WANT MORE DORMS ON CAMPUS. LAST YEAR THERE WAS EVEN A STUDENT PROTEST ABOUT IT, WITH MANY STUDENTS SLEEPING OUTSIDE AND EXPRESSING THEIR DISSATISFACTION WITH OFF CAMPUS HOUSING. I AM NOT INTERESTED IN LOOKING AT THE BALANCE SHEETS OF LANDLORDS, BUT I’M PRETTY SURE IF A LANDLORD IS SCRAPING BY CHARGING $1200 PER BED FOR 6 BEDS IN A HOUSE THAT IS NOT IN GREAT SHAPE, THEY COULD PROBABLY MAKE A FEW BUSINESS IMPROVEMENTS TO MAKE A BETTER LIVING.
TOM, I TOTALLY UNDERSTAND WHY YOU ARE SO ANGRY AT ME AND OTHERS COMPLAINING ABOUT THIS SITUATION. AND I KNOW YOU TO BE A GOOD PERSON WHO’S JUST TRYING TO LIVE SUCCESSFULLY. I ENJOY BUMPING INTO YOU ON OCCASION AND THINK WE BOTH RESPECT EACH OTHER. BUT I DO THINK YOU COULD SEE A BIT MORE OF THE REASONING OF PEOPLE WHO ARE DRIVING YOU CRAZY, COMPLAINING ABOUT LANDLORDS AND ALL THAT.
YOUR FRIEND,
IRA
Professional landlord Crossman says taxing landlords is equivalent to historic redlining? Yikes, time to read a history book.
Jonathan, great job picking up on the redlining comment, I applaud you.
Ira, I appreciate your diligent response, you are absolutely correct that I have been growing exhausted by the assault on landlords. I am fortunate to be a part of a team that manages a large portion of properties in Amherst and try to put systems in place that allow us to be responsive and diligent managers. We rent to people from all walks of life and that includes students. It is getting challenging when people make blanket statements suggesting that ALL LANDLORDS behave the same way. We do not charge $1,200 per bedroom, but we do understand the cost to construct and new construction will need a relatively high rent level to cover the cost of construction. The students do come to this community with an expectation for what it will cost to live in this community set by the cost of housing on campus. These on-campus housing costs set the expectation for what it will cost to live off campus.
I agree, our community needs more housing to satisfy the demand for living in this town.
Please note, I think the discussion around generating more tax revenue needs to include creative ways to generate more revenue that supports the services that our town looks forward to and enjoys. I don’t think we need to increase the cost of rental housing in order to meet those needs as it is hard enough to keep the rent levels “affordable” and maintain enough revenue to cover the costs of services needed for said housing. Adding to the cost of rental housing through increased taxes, or additional inspection costs is only going to make it worse for our already strained residents.
As you may have heard, UMass Amherst retains a high percentage of students on campus relative to other state schools throughout this country.
Ira, I will note that your years of service at the Family Business Center do not go unnoticed. When you invited me to the table, it was a fruitful experience that was a catalyst in my business management experience. If I didn’t say it before, then let me say it now, “Thank You”.
Cheers good friend.
Tom and anyone:
Why is rental housing so much more expensive in Amherst than Easthampton? Are we charged more for wood and nails? Are there value added services included in the rental of a house with 4++ occupants?
Or is it what the traffic will bear?
As you probably know, Amherst is among the smallest towns or cities that host a state university. When SUNY Buffalo has over half its students live off campus, there is a large (and inexpensive) city to find a home in.
When 42% of UMass Amherst students live off campus, that’s a lot more people trying to find a bed in a small town (albeit bursting at the seams) (where everyone says that everyone who wants to live in Amherst should be able to live in Amherst).
Lastly, I am a believer in people and businesses paying their “true cost.” The price of a gallon of gas should be higher, to include the cost of cleaning up the pollution from that gallon. And the cost of doing business as a student landlord should include the costs of inspections (for safety of occupants and the good of the town) and the wear and tear on the roads, police and fire, mitigating threats to families living here and creating a 12 month economy.
We don’t have a separate business tax rate, because we have so little business in Amherst we don’t want to chase away what we have. But even student landlords are saying they want more recognition that student housing is a major industry in our town. To not be able to charge the tax rate (or PILOT) that considers the cost to our town of that industry isn’t fair or sustainable or healthy for our town.
I’m glad you appreciate the thought partnership you gained from your time in the Family Business Center. Thank you for saying so.
Ira
PS I regularly differentiate between the landlord who charges a fair rent and maintains the safety and quality of their properties, and those that don’t.
I hesitate to jump into this discussion, but it began with noting the tax increase homeowners face this year. Many of our neighbors are finding it more and more unaffordable to live here. Amherst has tried unsuccessfully for at least the 30 years I’ve lived here to increase its revenue from businesses. Meanwhile, Route 9 through Hadley is a goldmine of tax-paying businesses for their town. Maybe Amherst hasn’t zoned commercially to compete, I don’t know. But I do know that housing for students is a profitable commodity that is expanding in Amherst. If it weren’t profitable, than we wouldn’t be seeing the expansion that sure looks out-of-control to me. Once quiet streets of single-family homes are becoming dominated by student rentals. Some people are profiting from this and there’s no point in denying that. To suggest that targeted taxation for student rentals is somehow unfair to the students is a hollow argument. Landlords already charge what the market will bear. The rental industry is clearly a profitable business commodity in our town and we are not realizing the value it represents. Much of this economic value the town has to offer is being skimmed and taken elsewhere. If it’s true that Massachusetts law does not allow student rental properties to be taxed at a commercial rate, then Mr. Bryck is absolutely correct- it’s a bad law. Bad laws should be changed.