Greg Vasil

When the Boston City Council recently passed Mayor Michelle Wu’s home rule petition to increase Boston’s commercial property tax rate, councilor after councilor claimed that their support for the vote was in the best interest of Boston residents.

“This [vote] allows us the ability, generally, and the flexibility within specific guardrails to move swiftly should we need to, to protect Bostonians,” Councilor Gabriela Coletta Zapata said, per Boston.com.

Councilor Sharon Durkan took it one step farther, arguing if the policy did not pass, “We’re going to have a lot more people that cannot afford to live in the city, cannot afford to stay in their homes.”

That petition now rests in the hands of state leaders on Beacon Hill, who must now reckon with how they may most effectively protect Boston’s residents from increased costs. Unfortunately, forcing businesses to pay more in taxes will not address Boston’s budget shortfall.

Residents Taxes Will Still Go Up

According to research we shared with the Boston City Council, cutting Boston’s residential property tax rate in the short term will actually force residents to face steep property tax hikes in the years that follow. For instance, under the city’s proposed plan, Boston’s residential property tax rate would fall from 10.9 percent in 2024 to 9.4 percent in 2025. But, for the next four years, Boston’s residential property tax rate would climb by 40 percent, reaching 13.3 percent in 2029.

This bears repeating: Whether or not Boston lowers its residential property tax rate in the short-term, the city’s residential tax rate will likely climb from 10.9 percent in 2024 to 13.3 percent in 2029, according to our research.

The city’s proposed plan would not so much protect residents as it would provide them a false sense of security. Even if residents have a reprieve for a year or two when it comes to paying less in taxes, that satisfaction will evaporate as they later watch their bills climb 40 percent in under five years.

Analysts have written extensively about Boston’s looming budget shortfall. Even though it is no one person’s fault, everyone needs to come to grips with this new reality of a post-pandemic world where remote and hybrid work appear here to stay. It is deeply unfortunate that Mayor Wu and the Boston City Council need to address this unprecedented challenge given that they had nothing to do with it, however the fact is their strategy will not work in the long-term.

Cutting residential property taxes in the short term will not protect Boston residents, and neither will hiking commercial property taxes. If businesses are already shrinking their office footprint, then forcing them to pay more in taxes will only increase the likelihood that they look elsewhere for office space. Communities like Newton and Waltham would be happy to have them.

Without these Boston-based businesses, the city’s budget will shrink even further, resulting in cuts to the police department, to school faculty and staff, and to so many other essential services residents depend on every day. How would that protect Boston residents?

Growth Is Only Way Out

Now, if the city’s goal is to protect Boston residents by lowering housing costs, then the solution is simple: Create more housing across all price points. Create more apartments for college students and young professionals. Create more houses for families of all ages. Create more modestly sized spaces, such as accessory dwelling units (ADUs), for seniors seeking to downsize.

More housing will mean more residents and more property tax revenue. But better than that, it will also mean a more welcoming city, a city for people of all ages and backgrounds, a city that average people will have a far greater chance of calling home one day than they have right now.

Many of the policies under consideration in Gov. Maura Healey’s housing bond bill would help Massachusetts and Boston create more homes. For instance, the policy would invest more than $1 billion in housing upkeep and creation. It would not only mean more desperately needed funding for affordable housing to support our most vulnerable residents, but deep investment in middle-income housing to expand homeownership opportunities.

The bond bill’s call to reduce barriers around the creation of ADUs would also help make housing more affordable. Officials estimate that ADUs would help create 8,000 to 10,000 places to live throughout the state in just the first five years – a crucial opportunity for seniors, who often hope to downsize but lack affordable options to do so. These affordable options mean more new units for seniors, and ultimately, more newly-available homes for young families.

The key to protecting Boston’s residents isn’t to increase taxes on businesses. It’s to build more homes. State leaders should reject Boston’s misguided home rule petition.

Greg Vasil is CEO of the Greater Boston Real Estate Board.