State of the City: Something interesting about property in Providence

So a few days ago we had occasion to go over to Whole Foods. We walked since if there is one thing about Providence, it is a very walkable city.

Our route took us down Benefit Street. This is where a lot of the historic properties in the city are located, and there are some very nice homes. I figured it’s all in the million plus range.

But one thing I noticed was the number of houses for sale on that street. So when I got home (For some reason google was being a pain in the ass on my phone!) I looked up a couple of the homes for sale.

One was very nice, a big yellow colonial style. And literally, it dated to the 18th century. The price was $895,000 – monthly mortgage estimated at $6,000. So you’d need to be making about $250,000 to afford this ($250,000 after tax would net $165,000 [Based on 33% tax] or $13,750 per month) home.

But taxes – it’s about $32 per thousand of valuation right now, which means the annual tax bill would be $28,640, or $2,386.66 per month! So you go from $13,750 less $6,000 less $2,400 for tax and you’re left with $5,350 – not bad. But that tax rate is only going to continue to climb so get out while you can.

Meanwhile we have multi-million dollar properties in the city that got temporary abatements lasting 20 years. Such properties as Providence Place Mall, the Gtech property, the Westin properties. All of them got some sort of favorable tax treatment before they ever broke ground.

But city finance is in crisis. And the low hanging fruit has already been picked. It’s time to buckle down, EVERYONE has to sacrifice. And I don’t buy the Mayor Taveras’ arguments that it brought in jobs, that’s a red herring and he knows it.

Honestly, if you rescinded the tax abatements what are the property owners going to do? Tear them down? When they’re making money? Or pick them up and move them?

There is STILL a $22 million dollar deficit. If you went to the property owners, and really looked at the churches, you could close the gap. Mayor Taveras and his administration have already started the process of going down the hard road of reigning in health care costs for retirees, and they are chipping away at the cost of living adjustments too. At 6% per year, the COLA’s outpace inflation! You have fire chiefs who left making $70,000 who now collect $190,000 a year in pension.

And the Mayor has said that they are only going after the COLA’s, not the pensions. So those of you who got out before the crunch, you had it good. It won’t be so good until they city gets the opportunity to move those over 65 into Medicare, and the city will provide subsidies to purchase supplemental plans. And those retirees under 65 will be asked to shoulder 20% of the health care costs. If you’re making $100,000 a year you can afford to take the 20% hit.

In conclusion, in dire times EVERYONE has to shoulder the burden. No tax breaks, no giving away the candy store. Pay the damned tax!

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