Property Tax Troubles: Yellowstone and Cambridge, Ma.

Chief Joseph Ranch near Darby, Montana: Setting of cattle rancher, John Dutton's home in the TV series Yellowstone (wikipedia)

Early episodes of the TV series Yellowstone reveal a lurking danger that many of us now face in Cambridge and elsewhere: the disastrous impacts of property value increases. Indeed as  Mike Warkentin notes in his November 26, 2021 article titled "The Economics of “Yellowstone”: John Dutton Needs a Mentor" in the journal  Two Brain Business "Despite the size and value of the ranch, viewers are constantly told it isn’t that profitable. In fact, the clock is ticking and the Duttons are essentially fighting a losing battle against property taxes and the rising price of labor, fuel and [livestock] feed.” While Cambridge does not face a problem with livestock feed fortunately at this point in our history, we do face similar factors in both escalating property taxes and labor costs. To John Dutton, the outsize property tax increases, are due directly to outside investors seeking to profit from the valley where he and his family have lived for six generations.
 
There are many similarities with Cambridge, Ma., and the concerns that one, three and six generations of families living here are now struggling with. The proposed citywide upzoning will exacerbate problems that property investors and investment companies are already bringing here.
  
In Cambridge, as Robert Winters observes in an October 4, 2024 Cambridge Civic post on the city budget and our increasing tax needs that:

"The bottom line is: The FY25 Adopted Operating Budget increased by 8.1% ($71.8 million) over the FY24 Adopted Budget. This compares to last year’s 7.2% over the FY23 Adopted Budget ($57.8 million) – after some one-time accounting changes. The FY25 Budget adopted by the City Council in June 2024 projected a property tax levy increase of $53.4 million (9.28%) to $628.8 million in order to fund operating and capital expenditures. With approval of the recommendations in this memo, the actual FY25 tax levy required to support the FY25 Budget is $628,388,753 which is an increase of $52,970,264 or 9.21% from FY24. This increase is slightly lower than the estimated increase of 9.28% projected in June 2024 as part of the Adopted Budget, due in large part to higher than projected investment earnings. The property tax levy increase of 9.21% is higher than the FY24 increase of 8.3%. The five-year (FY21-FY25) annual average increase is 7.51%, and the ten-year (FY16-FY25) annual average increase is 6.31%. The FY25 residential tax rate will be $6.35 per thousand dollars of value, subject to Department of Revenue approval. This is an increase of $0.43, or approximately 7.3% from FY24. The commercial tax rate will be $11.52, which is an increase of $1.06, or 10.1% from FY24. By property class, an average a single-family home will see a 7.86% tax increase, a two-family will see a 6.44% increase, a three-family will see a 7.5% increase, and a condo will see an 11.46% increase."

Winters goes on to note that this "...last figure [condo tax costs] is interesting in that due to the flat residential exemption, condo owners have actually been seeing decreases in recent years.” This last point is important because in recent years condos globally are increasingly being acquired by investors who either leave them empty or rent them out for higher costs. 
The graph below, provided  by Winters, shows the median Cambridge tax figures including the CPA Surcharge.  He notes that this year, "[u]nlike previous years, the information on the number of residential properties in each
of the 17 Residential Tax Districts was not provided in this year’s City Manager letter."

One thing we know is that the proposed up-zoning will bring much steeper property values, and much higher property taxes to owners, renters, and neighbors alike once a building is sold. We also know that high property tax increases have a disproportional impact on lower and fixed income residents. Cambridge property taxes, as noted in Cambridge Civic, again increased this year to 9.21%, an amount even higher than the FY24 increase of 8.3%. And  Eversource residential prices appear to have gone up by 17%. Many Cambridge residents simply cannot sustain these kinds of living cost increases. When we add to that increased land prices (property values) that the upzoning will bring – a give away to investors in essence – our lower- and middle-income residents will feel the harm most significantly, and many may be forced out of the city because they will no longer be able to afford to live here. Boston is facing similar problems, with their residential property rates up 10.4%. And here, too, some families may be forced to leave the city because the homes they bought for what were once reasonable prices, have sky-rocketed in value and rising property taxes. Read about one woman’s story in the December 12, 2024 Boston Globe.

While Cambridge benefits considerably from our currently strong commercial base, particularly bio-tech and info-tech, these same resources are fueling our outsize housing costs and needs, as well as the rising property values that puts increasing numbers of residents at risk. John Dutton and his family turned to untenable responses to address the changing landscape, responses that also tore the family apart. We need to be smarter in how we handle related concerns here.