The latest from the Providence Landlord Association and the Real Estate Professionals for Fair Taxes
July 7, 2011: If you have an interest in Providence taxes, mark your calendars and get yourself to City Hall next month. On July 7th, the Providence City Council will be taking its first vote on the City’s new budget.
Last year, on July 31, 2010, the Providence City Council eliminated the non-owner occupied property 33% tax exemption by an 8-7 margin. The result was a wave of community outrage and action. Many opposing local landlords joined forces in organizational campaigns to petition the “unfair” tax levy. In result, the combined campaigning efforts and support of everyone involved has reshaped the City Council and has already provided a 15% rebate to taxpayers. But the fight is far from over, and the future of our taxes remains uncertain. No assurances have been made for 2011.
Keith Fernandes, founding Board Member of the Providence Apartment Association (PAA), has since created FixProv.com—an online campaign site petitioning the “short-sighted and harmful” tax increase in the hopes of reinstating the 33% residential exemption in its place. Fernandes owns several property rentals in the metro area and he is one of many who believe the 2010 Tax Levy will cause a devastating effect on the housing industry and even more to the state’s economy.
As non-owner occupied rental taxes increase, so will tenants’ rent. Basic economic sensibilities allow us to also anticipate an “increase in foreclosures, deferred maintenance, and the deterioration of our neighborhoods,” according to Nelson Taylor, co-founder of Real Estate Professionals for Fair Taxes (REPFT).
Established earlier this year, REPFT aims in educating real estate agents on how the increased tax levy will affect those working in the local market. According to co-founders George Potsidis, President of Geo Properties, Inc., and Nelson Taylor of The Taylor Group of Residential Properties & RPL Commercial, “some property owners have experienced a tax increase of upwards of 50%.” As a consequence, the sales of multi-unit properties in the City are at a standstill.
Fernandes is frustrated by the lack of realtor involvement in this crisis: “Real Estate professionals need to get much more involved. They have as much on the line as property owners do.” The message is clear: local agents are losing business as investors move on to the brighter and lesser-taxed pastures of neighboring cities and towns.
Providence City Council members who supported the decision have argued that the tax increase will only affect the more affluent of Providence landlords, in neighborhoods such as the East Side. In this case, investment property owners in these areas can “afford” it. But the loss of the residential tax exemption has hurt more than those assumed to be financially secure enough to take the loss. Taylor argues that these tax increases will “also affect many others—the working class of this city who own three or four multi-families, which they manage as their sole means of income.”
Although an unpopular vote it may have been, legislators deem the 2010 Tax increase as a necessary advancement towards recovering from our enormous budget deficit—an estimation of 19 million dollar increase. Mayor Taveras’ stated in his May 2nd budget address that property taxes will increase by 13% and the tax levy by 1%– the highest increase in over thirty years, according to an article by WNRI.
What do you think? Are these attempts of closing the budget gap leading to a more unstable economy in Rhode Island?
Most of us are pointing fingers at the City’s Prestigious Universities. If the City’s colleges paid taxes on their properties like the rest of us, the City would be billing them for nearly 100 million dollars. Instead, Mayor Taveras has asked for the universities to pay 25% of their assessed property values. The universities have refused.
*If you’re wondering what the next step to take as a constituent is, there are many ways to get involved:
Join the fight at http://www.fixprov.com/, or contact Geo friend Keith Fernandes at 401-241-3537, or via email at email@example.com.
Speak up at Citizenspeak.org.
Realtors! Get off your behinds and call George Potsidis at 401-265-1155, or Nelson Taylor at 401-486-1948 to find out how you can help.