HomeMy WebLinkAbout2019-05-20 BOS Packet - Released SELECTMEN'S MEETING
Monday, May 20, 2019
Town Office Building, 1625 Massachusetts Avenue, Selectmen's Meeting Room
6:30 PM
AGENDA
EXECUTIVE SESSION
1. Exemption 3: Collective Bargaining Up d ate - Fire Union 6:3 0 p.m.
2. Exemption 6: Interest in Real Estate - Fiske Common Easement 6:40 p.m.
3. Exemption 6: Interest in Real Estate - Muzzey Senior Center Condominium Unit 6:5 0 p.m.
PUBLIC COMMENTS
Public comments are allowed for up to 10 minutes at the beginning of each meeting. Each speaker is
limited to 3 minutes for comment. Members of the Board will neither comment nor respond, other than to
ask questions of clarification. Speakers are encouraged to notify the Selectmen's Office at 781-698-4580
if they wish to speak during public comment to assist the Chairman in managing meeting times.
SELECTMAN CONCERNS AND LIAISON REPORTS
TOWN MANAGER REPORT
ITEMS FOR INDIVIDUAL CONSIDERATION
1. Fiscal Year 2019 Third Quarter Financial Report 7:05 p.m.
2. Joint Meeting- Board of Selectmen and Ad Hoc Residential Exemption Policy 7:30 p.m.
Study Committee
• Committee Report Presentation
• Discussion
3. Ad Hoc Crematory Study Committee Update and Proposed Committee Charge 8:30 p.m.
Amendment
4. Discussion of Planning Department 8:35 p.m.
5. Selectmen- Committee Appointment and Reappointments 8:50 p.m.
6. Discuss Future Meeting Dates 8:55 p.m.
7. Discuss Fall Delegation to Antony, France 9:00 P.M.
8. Discuss Initial Request for Race Amity Day Proclamation 9:10 P.M.
CONSENT AGENDA
1. Approve and Sign Proclamations
• Immigrant Heritage Month(IHM)
• Lexington Goes Purple Days
2. Water and Sewer Commitments
3. Approve Minutes
4. Approve and Sign Eagle Scout Commendation Letters
ADJOURN
1. Anticipated Adjournment 9:30 p.m.
The next regularly scheduled meeting of the Board of Selectmen will be held on Monday, June 3,
2019 at 7:00 p.m. in the Selectmen's Meeting Room, Town Office Building, 1625 Massachusetts
Avenue.
Hearing Assistance Devices Available on Request •.
All agenda time and the order of items are approximate and Le e *
subject to change. Recorded by LexMedia
AGENDA ITEM SUMMARY
LEXINGTON BOARD OF SELECTMEN MEETING
AGENDA ITEM TITLE:
Fiscal Year 2019 Third Quarter Financial Report
PRESENTER: ITEM
Carolyn Ko sno ff Assistant Town NUMBER:
Manager for Finance; Jennifer Hewitt,
Budget Officer I.1
SUMMARY:
Finance staff will present a budget-to-actual up d ate on the To wn's fiscal year 2019 finances as of the end of the
third quarter, March 31, 2019. This will include an up d ate on supplemental tax billing which has been
implemented for fiscal 2019 and is expected to generate new revenue before the end of the fiscal year.
SUGGESTED MOTION:
n/a
FOLLOW-UP:
n/a
DATE AND APPROXIMATE TIME ON AGENDA:
5/20/2019 7:05 p.m.
ATTACHMENTS:
Description Type
00
PR, 1191H
MEMORANDUM
TO: Select Board
FROM: Carolyn Kosnoff,Assistant Town Manager for Finance
Jennifer Hewitt, Budget Officer
DATE: May 20, 2019
SUBJECT: FY20191 3rd Quarter Budget Status Report
Summary
This report provides 3rd quarter analysis of Budget to Year-to-Date revenues and expenditures as of
March 31, 2019 for FY2019 General, Enterprise and Revolving Funds. The General Fund accounts for
the Town's annual operating budget. Water, sewer and recreation/community programs are reflected in
the Enterprise Funds. Revolving funds are self-supporting operations for a specific task or program.
For the purpose of analysis, it is assumed that at the close of the 3rd quarter, approximately 75% of
estimated revenues will have been collected, and that departments will have spent approximately 75% of
their appropriation. Line item expenditures that exceed 75% are reviewed by staff to determine if there is
a risk that the department will exceed its appropriation by the end of the fiscal year.
In general, both expenditures and revenues are in line with expectations as of the end of the 3rd quarter.
A detailed breakdown of revenue collections can be found on pages 7-11, with expenditures on pages
12-23. The summary table below indicates the total activity for these items:
Summary of Operating Revenues and Expenditures
Revenue (A) (B) (A-B) B/A
Estimates Collections Uncollected % Collected
General Fund $ 223,8705118 $ 1715389,787 $ 52,4801331 76.56%
Enterprise Funds $ 23,705,866 $ 15,263,079 $ 8,442,787 64.39%
(A) (B) (C) (D) (B+C)/A (B/A)
Expenditures Revised % Used % Used
Budget* Expenditures Encumbered Available (Exp. & Enc.) (Exp. Only)
General Fund $ 2085028,555 $ 1359000,520 $ 91509,967 $ 633518,067 69.47% 64.90%
Enterprise Funds $ 223251,264 $ 15,536,006 $ 722,942 $ 53992,316 73.07% 69.82%
Grand Total $ 230,279,819 $ 150,536,526 $ 10,232,910 $ 69,510,384 69.81% 65.37%
*Incorporates$12,211 in supplemental appropriations approved at Special Town Meeting 2018-1.
FY2019, Quarter 3 Budget Status Report 1
General Fund Revenue Collections
Revenue collections were largely in line with estimates. As of March 31, 20191 76.56% or $171,389,787
of total estimated revenue for FY2019 ($223,870,118) had been collected. The majority of revenue
(82.8%) is received from Property Tax receipts, which have recorded 74.25% of budgeted levels for the
first three quarters.
In the fourth quarter of FY2019 the Town should expect to see additional revenue from supplemental
property taxes. Twelve supplemental bills will be issued in May for a total of$56,960 which will be due
before the end of the fiscal year. Going forward this new revenue will be included in the line for
Miscellaneous Non-Recurring Revenue.
A breakdown of General Fund Revenue is shown below:
Summary of Revenue Collections - General Fund
(A) (B) (A-B) (B/A)
FY2019
Revenue Percent
Estimates* Collections Uncollected Collected
Property Tax $ 185,4015053 $ 1379665,449 $ 4737353604 74.25%
State Aid $ 153947,874 $ 11,985,829 $ 3,9629045 75.16%
Local Receipts $ 1336003729 $ 123811,290 $ 7899439 94.20%
Motor Vehicle Excise $ 5,080,000 $ 47693,736 $ 386,264 92.40%
Other Excise(meals,jet fuel,hotel/motel) $ 11583,000 $ 17304,284 $ 278,716 82.39%
Penalties and Interest $ 341,500 $ 427,673 $ (86,173) 125.23%
Payment in Lieu of Taxes(PILOTS) $ 614,000 $ 470,074 $ 143,926 76.56%
Rentals of Town Buildings $ 510,800 $ 311,416 $ 199,384 60.97%
Departmental-School $ 443,500 $ 233,788 $ 209,712 52.71%
Departmental-Municipal $ 2,525,000 $ 1,985,970 $ 539,030 78.65%
Licenses&Permits $ 11941,550 $ 17815,745 $ 125,805 93.52%
Special Assessments $ 16,379 $ 19,879 $ (31 500) 121.37%
Fines and Forfeitures $ 200,000 $ 130,041 $ 69,959 65.02%
Investment Income $ 345,000 $ 172347840 $ (889,840) 357.92%
Misc. Non-Recurring Revenue $ — $ 183,845 $ (183,845) ---
Interfund Operating Transfers $ 839209462 $ 839273220 $ (63758) 100.08%
Total General Fund Revenue $ 223,8703118 $ 17193893787 $ 5234803331 76.56%
*Does not include Free Cash appropriated under Article 4 to support the FY2019 Operating Budget
Explanation of Significant Variances
1. Motor Vehicle Excise -The majority of revenue is received after the first commitment (billing) in
February, which is typically for all vehicles registered in Town.
2. Other Excise - The higher revenue is due to the timing of receipts for Hotel/Motel excise, which is
concentrated in the first half of the year. Actual revenue will likely exceed estimates.
3. Penalties and Interest -The Treasurer's Office continues to see the results from an initiative to collect
back taxes. As of March 31 st, 6 payments of more than $25,000 were received ($214,903 total) for
the penalty and interest portion of delinquent accounts which extended from 1998 to 2017.
FY2019, Quarter 3 Budget Status Report 2
4. Rentals of Town Buildings - Staff will continue to monitor this category of spending, which was
increased in FY2019 to reflect higher cell tower rental contracts.
5. Departmental - School -The largest driver of school revenue is from Medicaid reimbursements, which
are concentrated at the end of the year.
6. Licenses & Permits - Building Permits continue to benefit from construction activity in both the
residential and commercial markets. In the third quarter, three large commercial projects generated
more than $430,000, or approximately 35%, of the total $1.2 million in building permit fees.
7. Fines and Forfeitures - This is primarily made up of parking fines, which have experienced a decline
since the new parking policies were implemented.
8. Investment Income - The Treasurer reports that the rate environment for Town deposits continues to
improve. In addition, the Town continues to benefit from having sizable account balances due to
bond and note issuances in anticipation of spending on a number of construction projects - $57.5M in
bonds and notes in February 2018, $12M in BANS in June 2018, and $63M in bonds and notes in
February 2019. Those funds earn interest until spent.
General Fund Expenditures
As of March 31, 2019) 64.90% of the FY2019 General Fund budget of$208,028,555 has been expended
and 69.47% has been expended or encumbered. Expenditures represent actual payments made for
goods and services and encumbrances are reservations of budgets for goods or services ordered but not
yet paid in FY2019.
As of March 31St, analysis of those line items exceeding 75% of budget revealed no risk of those
departments exceeding their appropriation at the end of the fiscal year.
A breakdown of the General Fund Operating Budget is shown below:
Summary of Operating Expenditures - General Fund
(A) (B) (C) (D) (B+C)/A (B/A)
Revised % Used % Used
Budget* Expenditures Encumbered Available (Exp. & Enc.) (Exp. Only)
Education $ 1101237,662 $ 70,210,221 $ 64063423 $ 33,6213017 69.50% 63.69%
Shared Expenses $ 59,508,858 $ 40,196,584 $ 6113875 $ 1837003399 68.58% 67.55%
Municipal $ 38,282,035 $ 24,5933715 $ 2,4913669 $ 11,1963651 70.75% 64.24%
Total $ 208,028,555 $ 135,000,520 $ 935093967 $ 63,518,067 69.47% 64.90%
*Incorporates$12,211 in supplemental appropriations approved at Special Town Meeting 2018-1.
Explanation of Significant Variances
1. Education is heavily weighted (83.9%) towards personal services. The majority of staff begin in late
August and work through June. As a result, personal service spending does not follow the
expectation for 75% spent. As of March 31St, 15 of 22 paychecks had been issued (68%), and
personal services spending is at 64.8% of budgeted levels.
2. The largest Shared Service item is employee health benefits, for which the Town submits premiums
to the Group Insurance Commission one month in arrears.
3. Municipal - While a small number of salary line items have spent more than 75% of their total year's
budget, this is primarily attributed to salary adjustments that were not built into the FY2019 budget
projections such as retro payments for contract settlements and retirement buybacks. Additional
retro payments and buybacks are expected in the second half of the year. Finance will continue to
FY2019, Quarter 3 Budget Status Report 3
monitor these departments and a transfer from the Salary Adjustment Account will be recommended,
if appropriate and necessary.
Enterprise Fund Revenue Collections
As of March 31, 20195 64.4% or$15,263,079 of total estimated revenue for FY2019 ($23,705,866) had
been collected.
A breakdown of Enterprise Fund Revenue, by fund, is shown below:
Summary of Revenue Collections - Enterprise Funds
(A) (B) (A-B) (B/A)
FY2019
Revenue Percent
Estimates* Collections Uncollected Collected
Water
User Charges $ 1074153321 $ 77317,372 $ 37097,949 70.26%
Non-Rate Revenue $ 2727920 $ 3477083 $ (747163) 127.17%
Retained Earnings $ 617000 $ 61,000 $ 100.00%
Total Water $ 10,749,241 $ 7,725,455 $ 33023,786 71.87%
Sewer
Charges for Services $ 976927978 $ 57228,152 $ 47464,826 53.94%
Non-Rate Revenue $ 3657620 $ 4457229 $ (79)609) 121.77%
Retained Earnings $ $ $ %
Total Sewer $ 10,058,598 $ 5,673,381 $ 4,385,217 56.40%
Recreation and Community Programs
Recreation Fees $ 173101452 $ 7217676 $ 5887776 55.07%
Community Center Fees $ 4337253 $ 3367042 $ 97,211 77.56%
Golf User Charges $ 7757000 $ 4237198 $ 3517802 54.61%
Non-Fee Revenues $ 4,322 $ 8,327 $ (47005) 192.66%
Retained Earnings $ 3757000 $ 3757000 $ 100.00%
Total Recreation/CP $ 21898,027 $ 1,864,242 $ 1,033,785 64.33%
Total Enterprise Fund Revenue $ 23,705,866 $ 15,263,079 $ 8,442,787 64.39%
*Inclusive of revenue to fund indirect costs.
Explanation of Significant Variances
1. Water- none.
2. Sewer- Currently staff are projecting a revenue deficit in the Sewer Enterprise Fund, primarily due to
actual usage rates coming in lower than what was projected for rate setting. Further analysis will be
done, particularly once the Spring meter reads have been completed in order to better project the
shortfall. The Sewer Enterprise Fund has sufficient retained retained earnings to cover any shortfall
that may occur for FY2019.
3. Recreation - none.
FY2019, Quarter 3 Budget Status Report 4
Enterprise Fund Expenditures
As of March 31St, 69.8% of the FY2019 Enterprise Fund budgets of$22,251,264 has been expended and
73.1% has been expended or encumbered, leaving $5,992,316 of the budget available, which will be
available for spending in the 4t" quarter.
A breakdown of the Enterprise Fund Operating Budgets is shown below:
Summary of Operating Expenditures - Enterprise Funds
(A) (B) (C) (D) (B+C)/A (B/A)
Revised % Used % Used
Budget* Expenditures Encumbered Available (Exp. & Enc.) (Exp. Only)
Water $ 9,857,819 $ 71049,256 $ 1333663 $ 216745901 72.87% 71.51%
Sewer $ 9,542,952 $ 6,6995222 $ 2343154 $ 216095575 72.65% 70.20%
Recreation/CP $ 21850,493 $ 197875528 $ 3553125 $ 707,840 75.17% 62.71%
Total $ 22,251,264 $ 15,536,006 $ 722,942 $ 5,992,316 73.07% 69.82%
*Exclusive of indirect costs
Explanation of Significant Variances
1. Water/Sewer- None.
2. Recreation/CP - None.
FY2019, Quarter 3 Budget Status Report 5
Revolving Fund Revenues and Expenditures
Continuing the practice started in FY2018, this report reflects a quarter-end snapshot of Revolving
Funds. Generally, these funds maintain a small balance from year to year, and generate revenue during
the year that covers expenses. Revolving Funds cannot spend more than they have in available
revenue, and have an annual spending limit set by Town Meeting. For FY2019 there are 11 active
revolving funds, listed below.
A B C D E
YTD YTD
Beginning Revenue- Spending - Current
Fund Mar.31, Mar. 31, Encumb- Balance FY2019
Revolving Fund Department Balance 2019 2019 ered (A+B-C-D) Authorization
School Bus Schools $ 5275620 $ 6365034 $ 7267851 $3853699 $ 515104 $ 151509000
Transportation
Building Rental Facilities $ 266,775 $ 377,106 $ 352,563 $ — $ 2915318 $ 535,000
Revolving Fund
DPW Burial Containers Public Works $ 219,833 $ 35,205 $ 13,960 $ 13,985 $ 2271093 $ 50,000
Lexington Tree Fund Public Works $ 229224 $ 60,900 $ — $ — $ 835124 $ 45,000
DPW Compost Public Works $ 9095905 $ 255,905 $ 357,795 $ 34,031 $ 773,983 $ 810,000
Operations
Minuteman Household
Hazardous Waste Public Works $ 817632 $ 917973 $ 817625 $ 507330 $ 415650 $ 190,000
Program
Regional Cache— Public Works $ 157873 $ 177756 $ 97874 $ — $ 231755 $ 10,000
Hartwell Avenue
Senior Services Human $ 50,595 $ 39,590 $ 377334 $ — $ 52,851 $ 75,000
Program Services
Health Programs Land Use $ 897709 $ 131173 $ 47202 $ — $ 987681 $ 45,000
Tourism/Liberty Ride Land Use $ 177437 $ 1291487 $ 1117876 $ 397220 $ (47172 $ 2105000
Visitors Center Land Use $ 145,813 $ 1201856 $ 1512802 $ — $ (16,133 $ 2125000
Items of note -
• Regional Cache - Hartwell Ave. - Staff report higher repair costs on equipment being rented to
other communities, and will be seeking a $10,000 increase in the FY2019 authorization, to be
covered by rental fees. That increase is continued in the Recommended Budget for FY2020.
• Tourism/Liberty Ride - staff continue to monitor the revenues and expenditures for this enterprise,
which has traditionally maintained spending at or close to annual ticket sales.
• Visitors Center- staff continue to monitor the revenues and expenditures for this enterprise. The
Economic Development budget will contribute $18,000 for supplies, as planned in the FY2019
budget. The impact of staff turnover and moving the Visitors Center to the Cary Memorial
Building are anticipated to impact final revenues and spending in the fund.
FY2019, Quarter 3 Budget Status Report 6
FY2019 3rd Quarter General Fund Revenue Report
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FY2019 Uncollected
Revenue from Collections as as of Percent
PERSONAL PROPERTY TAX Recap of 3/31/2019 3/31/2019 Collected
10010020 41119 19 PERSONAL PROPERTY TAX $ 573877447 $ 4,100,044 $ 17287,403 76.10%
10010020 Prior Years Personal Property Tax $ 217799 $ (21,799) —%
TOTAL PERSONAL PROPERTY $ 5,3877447 $ 4,1213843 $ 1,265,6041 76.51%
REAL ESTATE TAXES
10010030 41219 19 REAL ESTATE TAX $ 18070137606 $ 133,343,062 $ 46,6707544 74.07%
10010030 41218 18 REAL ESTATE TAX $ (671,058) $ 671,058 —%
10010030 41217 17 REAL ESTATE TAX $ 87076 $ (8,076) —%
10010030 Prior Years Real Estate Tax .%
10010030 41451 DEFERRED TAXES $ 213,582 $ (213,582) —%
10010040 j 41420 j TAX LIENS/TITLES REDEEMED $ 642,388 $ (642,388) —%
TOTAL REAL ESTATE $ 18070137606 $ 133,543,605 $ 46,470,001 74.19%
TOTAL PROPERTY TAX j$ 185,4017053 $ 137,665,449 $ 47,735,605 74.25%
..................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................
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Revenue from Collections as as of Percent
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Recap of 3/31/2019 3/31/2019 Collected
10010130 46204 CH 70 SCHOOL AID $ 14,217,984 $ 10,663,488 $ 3,554,496 75.00%
10010130 46209 CHARTER SCHOOL ASSESSMENT $ 893 $ 3,649 $ (2,756) 408.62%
10010130 46602 VETERANS BENEFITS CH 115 $ 517518 $ 40,720 $ 10,798 79.04%
10010130 46605 LOTTERY AI D $ 17584,615 $ 1,188,459 $ 396,156 75.00%
10010130 46102 EXEMPTIONS-VET,BLIND,ELD,SURV $ 92,864 $ 89,513 $ 3,351 96.39%
TOTAL CHERRY SHEET,$ 15,947,874 $ 11,985,829 $ 3,962,045 75.16%
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10Recap of 3/31/2019 3/31/2019 Collected
10010050 41519 19 MVE TAX $ 570807000 $ 3,785,982 $ 1,294,018 74.53%
10010050 41517 17 MVE TAX $ 97171 $ (9,171) —%
10010050 41518 18 MVE TAX $ 901,746 $ (901746) —%
10010050 Prior Years Motor Vehicle Excise $ (37164) $ 3,164 —%
TOTAL MOTOR VEHICLE EXCISE[$ 570807000 $ 4,693,736 j$ 386,265 j 92.40%
FY2019 Uncollected
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Revenue from Co ecti ns as as of Percent t
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Recap of 3/31/2019 3/31/2019 Collected
10010080 41901 OTHER EXCISE- HOTEL/MOTEL $ 915,000 $ 783,530 $ 131,470 85.63%
10010080 41902 OTHER EXCISE-JET FUEL $ 1937000 $ 170,276 $ 22724 88.23%
10010080 141903 1 OTHER EXCISE- MEALS TAX $ 4757000 $ 350,478 $ 124522 73.78%
TOTAL OTHER EXCISE $ 1,5837000 $ 1,304,284 $ 278,716 82.39%
FY2019
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Recap of 3/31/2019 3/31/2019 Collected
10010060 41701 PEN & INT PP TAX $ 107500 $ 87006 $ 2,494 76.25%
10010060 41702 PEN & INT RE TAX $ 2227000 $ 140,204 $ 81796 63.15%
10010060 41703 PEN & INT TAX LIENS $ 50,000 $ 253,150 $ (203,150) 506.30%
10010060 41704 PEN & INT MVE TAX $ 597000 $ 267313 $ 323687 44.60%
TOTAL PENALTIES AND INTERESTS $ 3417500 $ 427,673 $ (86,173)1 125.23%
FY2019, Quarter 3 Budget Status Report 7
FY2019 Uncollected
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RevenuefromCo Collections as as of
Percent nt
Recap of 3/31/2019 3/31/2019 Collected
10010070141801 PAYMENT IN LIEU OF TAXES $ 6147000 $ 470,074 $ 143,926 76.56%
TOTAL PAYMENT IN LIEU OF TAXES (PILOTS) $ 6147000 $ 4707074 $ 143,926 76.56%
FY2019 Uncollected
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Revenue from as of
Recapof 3/31/2019 Collected
3/31/2019
10010090 43298 CELL TOWER REVENUE $ 4267828 $ 2573592 $ 1693236 60.35%
10010100 43601 RENTALS OF TOWN BUILDINGS $ 83,972 $ 53,824 $ 30,148 64.10%
TOTAL RENTALS $ 5107800 $ 311,416 $ 1993384 160.97%
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Revenue fr mCoI Collections as f Percent nt
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of 3/31/2019 Collected
Recap 3/31/2019
10010200 43299 MISC. FEES $ — $ — $ — —%
10010200 43401 TUITION $ — $ — $ — —%
10010200 43406 TRANSCRIPT FEES $ 31,500 $ 2,201 $ 29,299 6.99%
10010200 48403 MEDICAID REIMBURSEMENT $ 400,000 $ 221,337 $ 178,663 55.33%
10010200 43405 STUDENT PARKING FEES $ 127000 $ 107250 $ 11750 85.42%
10010200 43407 HOMELESS STUDENT TRANSPORTATION $ — $ — $ — —%
TOTAL DEPARTMENTAL-SCHOOLS $ 443,500 $ 233,788 $ 209,712 52.71%
FY2019 Uncollected
/
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Revenuefrom as as of
Percent nt
Recap of 3/31/2019 3/31/2019 Collected
10010090 42701 FIRE DEPT REC-AMBULANCE FEES $ 17340,000 $ 1,042,456 $ 297,544 77.80%
10010090 42702 FIRE DEPT REC-FIRE ALARM FEES $ 137675 $ 27525 $ 113150 18.46%
10010090 42703 POLICE DEPT REC-HOUSE ALARMS $ 14,650 $ 240 $ 14,410 1.64%
10010090 43200 PUBLIC RECORDS REQUEST FEE $ — $ 50 $ (50) —%
10010090 43202 CERTIFICATE OF REDEMPTION $ 100 $ 24 $ 76 24.00%
10010090 43205 MUNICIPAL LIEN CERTIFICATES $ 33,830 $ 14,975 $ 18,855 44.27%
10010090 43210 PROTECTED TREE FEES $ 237000 $ 47110 $ 18,890 17.87%
10010090 43213 FEES FOR ENGINEERING SERVICES $ 200 $ 81 $ 119 40.50%
10010090 43219 BATTLE GREEN CHARTERS $ 500 $ 297 $ 203 59.31%
10010090 43221 LEXPRESS FARES $ 687000 $ 567732 $ 11,268 83.43%
10010090 43226 FIRE FEE-CERT OF COMPLIANCE $ 337000 $ 16,750 $ 16,250 50.76%
10010090 43227 TOWN CLERK FEE $ 35,900 $ 25,424 $ 10,477 70.82%
10010090 43228 POLICE DEPT FEE $ 627000 $ 657597 $ (3,597) 105.80%
10010090 43229 REGISTRY SURCHARGE FEE $ 207000 $ 127380 $ 7,620 61.90%
10010090 43230 DPW FEES FOR SERVICE $ 425 $ 180 $ 245 42.35%
10010090 43231 P.B. FILING & REVIEW FEES $ 217800 $ 127000 $ 9,800 55.05%
10010090 43232 B&Z MICROFILM FEES $ 127000 $ 67090 $ 5,910 50.75%
10010090 43233 B.O.A. HEARING FEES $ 215400 $ 27400 $ 19,000 11.21%
10010090 43234 P.B. SALE OF MAPS&DEV. REGUL $ 150 $ — $ 150 —%
10010090 43235 ANR PLAN FILING FEES $ 470 $ 15,000 $ (14,530) 3191.49%
10010090 43236 RENTAL CAR SURCHARGE FEES $ 37000 $ 17753 $ 1,247 58.44%
10010090 43238 CONSERVATION FEES $ 317000 $ 267564 $ 4,437 85.69%
10010090 43240 CEMETERY PREPARATION $ 1487250 $ 148,173 $ 77 99.95%
10010090 43299 MISC. FEES $ 25,000 $ 13,010 $ 11,990 52.04%
10010090 43302 AVALON BAY MONITORING SERVICES $ 97650 $ — $ 9,650 —%
10010090 43547 TRENCH PERMIT FEES $ 77000 $ 47650 $ 2,350 66.43%
10010090 43550 NET METERING CREDIT REVENUE $ 6002000 $ 514510 $ 853490 85.75%
TOTAL CHARGES FOR SERVICES $ 2,525,000 $ 1,985,970 $ 539,031 78.65%
FY2019, Quarter 3 Budget Status Report 8
FY2019 Uncollected
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Revenue from Collections as as of Percent
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Recap of 3/31/2019 3/31/2019 Collected
10010120 44105 ALCOHOL& BEVERAGE LIC $ 807000 $ 807800 $ (800) 101.00%
10010120 44201 BUILDING PERMITS $ 173007000 $ 1,224,859 $ 75,141 94.22%
10010120 44202 GAS PERMITS $ 289200 $ 167122 $ 12,078 57.17%
10010120 44203 WIRING PERMITS $ 2007000 $ 194,090 $ 5,910 97.05%
10010120 44204 PLUMBING PERMITS $ 1127000 $ 367853 $ 753147 32.90%
10010120 44205 SHEET METAL PERMITS $ 27000 $ 587284 $ (56,284) 2914.20%
10010120 44224 MECHANICAL PERMITS $ 25,000 $ 52,242 $ (27,242) 208.97%
10010120 44225 SELECTMAN'S LIC. & PERMITS $ 17000 $ 27545 $ (1,545) 254.50%
10010120 44227 BOARD OF HEALTH LIC& PERMITS $ 457000 $ 137745 $ 31,255 30.54%
10010120 44229 FIRE DEPT LIC. &PERMITS $ 457000 $ 439225 $ 1,775 96.06%
10010120 44230 B&Z MISC PERMITS $ 67800 $ 27181 $ 4,619 32.08%
10010120 44253 CABLE FRANCHISE LICENSE $ 67000 $ 47574 $ 1,427 76.23%
10010120 44258 FIREARMS LICENSE $ 2,800 $ 17950 $ 850 69.64%
10010120 44290 TOWN CLERK'S LIC& PERMITS $ 487000 $ 237825 $ 24,175 49.64%
10010120 44293 DPW STREET OPENING PERMITS $ 387000 $ 597285 $ (21,285) 156.01%
10010120 44294 RIGHT OF WAY OBSTRUCTION $ — $ 150 $ (150) —%
10010120 44295 STORM WATER/DRAIN PERMIT $ — $ — $ — —%
10010120 44296 DRAIN LAYERS LICENSE $ 17250 $ 990 $ 260 79.20%
10010120 44299 MISC. LICENSE&PERMITS $ 500 $ 25 $ 475 5.00%
TOTAL LICENSE&PERMITS $ 179417550 $ 1,815,745 $ 125,806 93.52%
FY2019 Uncollected
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10010160 147502 1 STREET BETTERMENT $ 167379 $ 197879 $ (3,499) 121.37%
TOTAL SPECIAL ASSESSMENTS $ 167379 $ 197879 $ (3,499) 121.37%
FY2019 Uncollected
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10010150 46801 COURT FINES $ 57000 $ 27178 $ 2,823 43.55%
10010170 47702 PARKING FINES $ 657000 $ 42,490 $ 22510 65.37%
10010170 47704 NON CRIMINAL FINES $ 102000 $ 12550 $ 8,450 15.50%
10010170 47706 REGISTRY CMVI $ 1207000 $ 837824 $ 36,176 69.85%
TOTAL FINES& FORFEITURES $ 2007000 $ 130,041 $ 69,959 65.02%
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10010180 148211 1 INT EARNED ON SAVINGS $ 345,000 $ 1,234,840 $ (889,840) 357.92%
TOTAL INVESTMENT INCOME $ 345,000 $ 1,234,840 $ (889,840) 357.92%
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Recap of 3/31/2019 3/31/2019 Collected
10010090 43300 MISC NON-RECURRING REVENUE $ — $ 1587896 $ (158,896) —%
10010140 46807 RECOVERIES FROM STATE $ — $ 17231 $ (1,231) —%
10010140 46814 EXTRA POLLING HOURS $ — $ 239718 $ (23,718) —%
Supplemental Billing
TOTAL MISC NON-RECURRING REVENUE REVENUE $ — $ 183,845 $ (183,845) —%
FY2019, Quarter 3 Budget Status Report 9
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10010190 49724 TRANSFERS FROM OTHER SPEC REV $ 1,107,966 $ 1,114,724 $ (6,758) 100.61%
10010190 49760 TRANSFERS FROM SEWER ENT FUND $ 515,280 $ 515,280 $ — 100.00%
10010190 49761 TRANSFERS FROM WATER ENT FUND $ 869,833 $ 869,833 $ — 100.00%
10010190 49770 TRANSFERS FROM RECREATION ENT $ 261,826 $ 261,826 $ — 100.00%
10010190 149783 1 TRANSFER FROM TRUST FUNDS $ 6,165,557 $ 6,165,557 $ — 100.00%
TOTAL INTERFUND OPERATING TRANSFERS $ 8,920,462 $ 8,927,220 $ (6,758) 100.08%
GRAND TOTAL GENERAL FUND REVENUE $ 223,870,118 $ 171,389,787 $ 5274807334 76.56%
TOTAL ENTERPRISE FUND REVENUE $ 23,705,866 $ 15,263,079 $ 8,442,787 64.39%
GRAND TOTAL REVENUE $ 2471575,984 $ 18636523866 $ 6079237118 75.39%
FY2019, Quarter 3 Budget Status Report 10
FY2019 3rd Quarter Enterprise Funds Revenue Report
FY2019
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Estimates of 3/31/2019 Uncollected Collected
61010500 42102 WATER USER CHARGES $ 1074157321 $ 7,317,372 $ 3,097,949 70.26%
WATER NON-RATE REVENUE $ 2727920 $ 347,083 $ (74,163) 127.17%
RETAINED EARNINGS $ 617000 $ 617000 $ — 100.00%
TOTAL WATER $ 10,749,241 $ 7,725,455 $ 3,023,786 71.87%
FY2019
,iiiiiiiiiiiiio �///oil t✓o ,�a / o Revenue Collections asPercent
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60010500 42101 SEWER USER CHARGES $ 9,692,978 $ 5,228,152 $ 4,464,826 53.94%
SEWER NON-RATE REVENUE $ 365,620 $ 445,229 $ (79,609) 121.77%
RETAINED EARNINGS $ — $ — $ — —%
TOTAL SEWER $ 10,058,598 $ 5,673,381 $ 4,385,2171 56.40%
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70010500 42450 RECREATION USER CHARGES $ 193105452 $ 721,676 $ 588,776 55.07%
70010500 42460 COMMUNITY CTR REVENUE $ 4331253 $ 336,042 $ 973211 77.56%
70010500 42470 GOLF USER CHARGES $ 775,000 $ 423,198 $ 351,802 54.61%
70010500 48211 INT EARNED ON SAVINGS $ 4,322 $ 8,327 $ (4,005) 192.66%
RETAINED EARNINGS $ 3757000 $ 375,000 $ — 100.00%
TOTAL RECREATION $ 278981027 $ 1,864,242 $ 1,033,785 64.33%
TOTAL ENTERPRISE FUNDS REVENUE $ 2337059866 $ 153263,079 $ 8,4429787 64.390/40
FY2019, Quarter 3 Budget Status Report 11
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MAKE PAYMENTS TO: FISCAL YEAR 2019 SUPPLEMENTAL REAL ESTATE TAX BILL
TOWN OF LEXINGTON THE COMMONWEALTH OF MASSACHUSETTS Bill Number: SB-1901
COLLECTOR OF TAXES TOWN OF LEXINGTON Bill Date: May 21, 2019
1625 MASSACHUSETTS AVE OFFICE OF THE COLLECTOR OF TAXES
LEXINGTON, MA 02420 PHONE: 781-698-4600
OFFICE HOURS Your Supplemental Real Estate Tax for the fiscal year
8:30-4:30 p.m. Monday, Weds., Thurs. beginning July 1, 2018 and ending June 30, 2019 on the
8:30-7:00 p.m. Tuesday; 8:30-1:00 p.m. Friday Real Estate described below is as follows:
Town of Lexington AMOUNT DUE: $4,368.63
1625 Massachusetts Ave. (DUE DATE: 06/20/2019)
Lexington, MA 02421
Payments must be received in the Tax Collector's Office on or
before the due date to avoid penalty
Map XX, Lot XX TAXPAYER'S COPY— RETAIN FOR YOUR RECORDS
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Supplemental Tax Bill: $49258.40
Supplemental CPA Increment: $ 110.23
Total Supplemental Tax Bill for FY2019: $4,368.63
Certificate of Occupancy(COO) Date: 1/30/2019
Number of Days following COO to June 30: 151
FY2019 Assessed Value at COO: $111207000
(Improvement Only,excludes land value)
See reverse side for important information.
Abatement applications for supplemental real estate taxes must be submitted per instructions on the back of this bill.
Interest at the rate of 14% per annum will accrue on overdue payments from the due date until payment is made.
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------
MAKE PAYMENTS TO: FISCAL YEAR 2019 SUPPLEMENTAL REAL ESTATE TAX BILL
TOWN OF LEXINGTON THE COMMONWEALTH OF MASSACHUSETTS Bill Number: SB-1901
COLLECTOR OF TAXES TOWN OF LEXINGTON Bill Date: May 21, 2019
1625 MASSACHUSETTS AVE OFFICE OF THE COLLECTOR OF TAXES
LEXINGTON, MA 02420 PHONE: 781-698-4600
OFFICE HOURS Your Supplemental Real Estate Tax for the fiscal year
8:30-4:30 p.m. Monday, Weds., Thurs. beginning July 1, 2018 and ending June 30, 2019 on the
8:30-7:00 p.m. Tuesday; 8:30-1:00 p.m. Friday Real Estate described below is as follows:
Town of Lexington AMOUNT DUE: $47368.63
1625 Massachusetts Ave. (DUE DATE: 06/20/2019)
Lexington, MA 02421
Payments must be received in the Tax Collector's Office on or
before the due date to avoid penalty
Map XX, Lot XX COLLECTOR'S COPY— REMIT WITH PAYMENT
FISCAL YEAR 2019 TAX: This tax bill shows the amount of supplemental real estate taxes you owe for
fiscal year 2019 (July 1, 2018 - June 30, 2019). The tax shown in this bill is based on the increased
value attributed to your property as of the Certificate of Occupancy issue date through June 30, 2019.
PAYMENT DUE DATES/INTEREST CHARGES: Your supplemental tax bill is payable in full within 30
days or May 1, 2019, whichever is later. If your payment is not made by its due date, interest at the rate
of 14% per annum will be charged on the unpaid and overdue amount. Interest will be computed on
overdue supplemental taxes from May 1, 2019, or the payment due date, whichever is later, to the date
payment is made. You will also be required to pay charges and fees incurred for collection if payments
are not made when due. Payments are considered made when received by the Collector. To obtain a
receipted bill, enclose a self-addressed stamped envelope and both copies of the bill with your payment.
ABATEMENT/EXEMPTION APPLICATIONS: You have a right to contest your assessment. To do so,
you must file an application for an abatement in writing on an approved form with the Board of
Assessors. You may apply for an abatement if you believe your property is valued at more than its fair
cash value, is not assessed fairly in comparison with other properties, or if a classified tax system is used
locally, is not properly classified. The filing deadline for an abatement application is 90 days after the bill
issuance date.
Applications are timely filed when (1) received by the assessors on or before the filing deadline, or (2)
mailed by United States mail, first class postage prepaid, to the proper address of the assessors, on or
before the filing deadline, as shown by a postmark made by the United States Postal Service. If your
application is not timely filed, the assessors cannot by law grant an abatement or exemption.
INQUIRIES: If you have questions on your valuation or assessment or on abatements or exemptions,
you should contact the Board of Assessors. If you have questions on payments, you should contact the
Collector's Office.
For abatement application, view: jh sl/www ii /--iii / u ii int / 1 / iir,,,,, iir -tax foirim,,,,,
AGENDA ITEM SUMMARY
LEXINGTON BOARD OF SELECTMEN MEETING
AGENDA ITEM TITLE:
Joint Meeting- Board of Selectmen and Ad Hoc Residential Exemption Policy Study
Committee
PRESENTER: ITEM
Mark Andersen Ad Hoc Residential NUMBER:
Exemption Policy Study Committee
Chair I.2
SUMMARY:
Mark Andersen will provide a brief summary of the the Ad Hoc Residential Exemption Study Committee's
Final Report to the Board of Selectmen regarding their research evaluating residential property tax exemptions
and present the Committee's recommendations.
SUGGESTED MOTION:
Move to accept the report of the Ad Hoc Residential Exemption Policy Study Committee.
FOLLOW-UP:
DATE AND APPROXIMATE TIME ON AGENDA:
5/20/2019 7:30 p.m.
ATTACHMENTS:
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An Examination of
Residential PropertyTax Exemptions
for the
Town of Lexington, Massachusetts
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The Lexington Select Board's
Residential Exemption Policy Study Committee (Ad Hoc)
Mark V. Andersen, Chair
Victoria Lawrence Blier
Sara G. Bothwell Allen
Howard B. Cloth
Katie Ponty Cutler
Thomas B. Whelan
John Zhiqian Zhao
April 2019
V1.0
Abstract
This report of the Lexington Select Board's Residential Exemption Policy Study Committee
(Ad Hoc) presents the Committee's year-long research to evaluate residential property tax
exemptions as a tool for helping Lexington residents to remain in their homes.
Massachusetts offers a local option residential exemption that allows municipalities to apply a
uniform exemption to property assessments of owner-occupied residential parcels. The
exemption does not reduce total tax revenue, and thus shifts property taxes from lower valued
properties to higher valued properties and properties that are not owner-occupied. Sixteen
municipalities have adopted this local option. Alternatively, at least five municipalities have
adopted their own means-tested residential exemptions that apply only to properties owned
and occupied by residents who meet certain income, age, length of residence and asset
criteria.
The Committee executed its charge to determine "if adopting the exemption could help reduce
the property tax burden and make it easier for residents to remain in their homes"by studying
financial housing stress and out-migration through a combination of expert testimony from
Economists and local with
implementation experience, as well as surve research
. I n and in open
meetings, residents expressed concern about local taxes and support for a thoughtful
approach to determining the course of action which would balance direct and indirect effects of
a proposed tax exemption.
After consideration and review of all issues raised, the Committee finds that no single
exemption or other policy tool alone can address the existing property tax stress in our
community. However, an approach which includes several tools could provide targeted tax
relief, but policy details would require further study.
At its conclusion, the Committee makes eight policy recommendations and urges prioritized
attention to residential tax relief by the Select Board.
Local Tax Policy:
1. Do not adopt the Massachusetts Residential Exemption (SRE). (Chapter 5)
2. Develop for community consideration a proposal for a means-tested and/or age-based
residential exemption. (Chapter 7)
3. Promote awareness of existing programs such as tax deferrals, exemptions, and the
Massachusetts Senior Circuit Breaker Tax Credit. (Chapter 3)
4. Evaluate increasing eligibility thresholds significantly for the Lexin ton Prgpgdy Tax
Deferral Ecgqrarn.
State Advocacy:
5. Advocate for expanded access to tax deferrals for homeowners with existing or future
mortgages and home equity loans.
6. Advocate for expanded access to the state administered Senior Circuit Breaker Tax
Credit for surviving spouses and those with homes above the current eligibility
thresholds, as well as expanding the level of rebate.
Further Study:
7. Further study the financial needs and supports necessary for Lexington's population of
older (80+) seniors to age in place.
8. Further study methods to retain
rate of self-forecasted
Although Committee members unanimously approved the recommendations above, individual
Committee members found their own basis for support in different ways. The executive
summary describes the rationales which were used by Committee members to support these
recommendations.
2
Abstract 1
Executive Summary 6
Recommendations 11
Introduction 16
1. Criteria for Examining Residential Exemptions 18
Direct, Intended Consequences 18
Economic and Psychological Impact on the Household 18
Impact on Household Migration 18
Indirect and Second-Order Effects 18
Housing Impact 19
Lexington Budgetary Impact 19
Equitable Taxation 19
Evaluative framework 19
2. Housing-Cost Stress and Out-Migration in Lexington 20
An Analysis of the Public Services and Housing Costs Survey 20
Housing stress 21
Migration potential 25
Open Response Comments 29
Statistical Study 30
Summary 30
3. Property Tax Relief Measures Currently Available to Lexington Residents 32
Town Programs 32
Property Tax Exemptions 32
Property Tax Deferrals 33
Senior Service Program 34
Utilization of Property Tax Programs in Lexington 34
The Massachusetts Senior Circuit Breaker Property Tax Credit 35
4. Residential Properties in Lexington 36
Classification of Residential Properties 36
Residential Property Types 37
Single Family Homes in Lexington 38
3
Two-Family Homes in Lexington 39
Condominiums in Lexington 40
Large Apartment Complexes in Lexington 42
Undeveloped Land 43
For-Profit Child Care Facilities 43
Group Living Facilities 44
Brookhaven 44
Affordable and Subsidized Housing 45
Conclusion 45
5. The Massachusetts Residential Exemption 47
State Residential Exemption Process 47
Setting an Exemption Percentage and, thereby, an Exemption Amount 47
Eligibility and Verification 48
Exemption Amount and Tax Rate Calculation 48
Misunderstandings about the SRE 54
Direct Consequences of SRE on Homes and Property Classes 54
Owner-occupied Single Family Homes and Condominiums 54
Tax Burdens Relative to Peer Communities 56
Indirect Consequences of the State Residential Exemption 64
Perspectives from the Lexington Real Estate Community 64
Perspectives from Economists and Housing Policy Experts 65
Aggregate Residential and Commercial Property Value in Lexington 67
Condominium Conversions 68
Effects of the SRE by Income Profile 69
Residential Exemptions in Massachusetts Communities 72
Summary 73
6. Massachusetts Model Means-Tested Residential Exemption Laws 74
Existing MTRE Laws in Five Towns 74
Massachusetts Model Means-Tested Exemption Laws 75
Adoption 75
Offsetting Loss of Circuit Breaker Tax Credits 76
Funding 76
4
An Assessor's Perspective on Means-Tested Residential Exemptions 77
Implementation Issues Experienced by Concord 77
Perspectives from Economists and Housing Policy Experts 78
Summary 78
7. Lexington Means-Tested Exemption Proposals 79
Lexington Proposals 79
Rationales for Eligibility 80
Rationales for Benefits 81
Proposal #1: Circuit Breaker Style Means-Tested Exemption 82
Proposal #2: Octogenarian Means-Tested Tax Exemption 84
Property Tax Freeze Models in other States 87
Evaluation 87
8. Conclusions and Recommendations 89
Appendix: Property Tax Benchmark Chart 90
Appendix: Services, Housing Stress and Emigration Survey 102
Survey Executive Summary 102
1. Overview 103
2. Survey Process 104
Survey Structure 106
3. Survey Respondents 108
4. Comparative Charts and Correlation Analysis on Housing Stress 114
and Migration 114
4a. Housing Stress in the Survey 115
5. Correlation Charts 149
6. Open Responses to Survey 152
7. Statistical Analysis of Housing Stress and Predicted Migration 162
8. Survey Response Summary 168
Survey Data and Analysis 188
Dr. Jonathan Haughton Tax Equilibrium Model 188
Public Hearings Summary 189
5
Executive Summary
This report summarizes the year-long research undertaken by the Select Board's Residential
Exemption Policy Study Committee (Ad Hoc). This Committee was charged by the Lexington
Select Board' to evaluate residential property tax exemptions as a tool for helping residents
remain in their homes. During the course of the year, the Committee surveyed residents,
interviewed subject matter experts, reviewed legislation, held two public hearings, and
evaluated its applicability for Lexington.
The State's Residential Exemption (SRE) is a local option available to all municipalities. When
adopted, it allows the Select Board to set a uniform flat exemption that is applied to the property
tax assessments of verified owner-occupied residential property. A provision of the law
maintains revenue levels by increasing the residential tax rates to compensate for exemptions.
Thus, the exemption effectively reduces taxes on residential properties with lower assessed
values, increases taxes on residential properties with higher assessed values, and substantially
increases taxes on residential properties that are not owner-occupied.
provides an overview of the framework and terminology developed by the Committee
to examine residential exemptions. The Committee identified criteria for examining the effects of
residential exemptions as:
• Economic and Psychological Impacts on the Household - the role that property taxation
has on financial stress and feelings of alienation toward the Town, and what effect
residential exemptions may have on these factors.
• Impact on Household Migration - the effect that residential exemptions may have on
migration decisions.
• Housing Impact-whether residential exemptions might change housing costs, the mix of
housing types and as a result, the demographics of Lexington.
• Lexington Budgetary Impact - the effect that residential exemptions may have on
demographics with resulting impacts on the Town budget.
• Equitable Taxation - how residential exemptions comport with concepts of tax fairness.
An evaluative framework was used that examines residential exemptions in terms of Precision
and Recall, a methodology borrowed from data science.
Precision: Out of the group of people that receive benefits from an exemption, how many of
them are the intended beneficiaries? The fewer unintended beneficiaries, the higher the
precision.
1 During the tenure of this committee, the name of Lexington's Board of Selectmen was voted by Town
Meeting to be changed to Lexington's Select Board. This document will use the term Select Board for all
references.
6
Recall: Out of the intended beneficiaries of an exemption, how many of them will receive
benefits? The more intended beneficiaries included, the higher the recall.
Finding limited information from existing studies to answer the Committee's
questions regarding the relationship between home value, housing stress, age, income, the use
of Town services and migration decisions, the Committee undertook a detailed survey that
reached a representative 7% of the adult population of Lexington. Key findings are presented in
this chapter, and all details covered in the surve,I Dendix.
Findings presented in Chapter 2 include:
• Renters report high housing stress more often than owners.
• High housing stress is reported at all ages, lengths of residence, incomes, and home
values.
• Income is a better predictor of housing stress than is home value.
• Means tested targeting offers higher precision than the State's Residential Exemption
(SRE), but low recall (under-reaching those with high housing stress).
• Renters are more likely to migrate than owners.
• Housing stress significantly drives migration for homeowners.
• Home value and income are not significant predictors of migration for homeowners.
• Middle aged populations have the highest forecast of migration.
• Lexington residents are very concerned about the steady increase in local taxes
These survey findings suggest that the SRE would not directly target those with high housing
stress, and that its impact on migration patterns would be limited. Residential exemptions may
impact economic health and psychological stress, but survey data suggests that policy makers
should not expect an exemption to have a material impact on migration.
provides an overview of property tax relief measures currently available to Lexington
residents and the extent to which they are utilized. Most relevant for this discussion are two
programs:
• The Massachusetts Senior Circuit Breaker Tax Credit,a State administered program
which provides a partial rebate for senior homeowners whose property tax exceeds 10%
of their income. The provisions of the State Circuit Breaker are important to understand,
as this $19100 State tax rebate could paradoxically be diminished when the taxpayer
receives a residential exemption.
• , which is an option for homeowners to manage
cash flows by deferring payment of their property taxes. The Committee identified
common obstacles that exist for use of the tax deferral: income eligibility ceilings and
blocking-actions by mortgage and home equity creditors.
7
describes and enumerates the various types of residential property in Lexington and
discusses how they may be influenced by the effects of an SRE.
• Homes which could be owner-occupied account for 97% of residential value in
Lexington.
• Condominiums account for 10% of all residential parcels and have a median assessed
value of$530,000. Due to their lower assessed values, nearly all Lexington
condominium owners would benefit from the SRE regardless of their personal level of
assets or income.
• Lexington has eight large commercial apartment buildings comprised of 984 units. These
large apartment buildings do not qualify for residential exemptions and will receive
significant property tax increases with an SRE.
• Lexington has 53 remaining buildable lots. Buildable lots are not owner occupied and will
experience an increase in property tax with an SRE. Increased property tax could
incentivize development of these parcels.
• Lexington's five for-profit child care centers and four for-profit group living facilities are
taxed as residential properties but are not owner-occupied. They would experience an
increase in property tax with an SRE.
• None of Lexington's affordable and subsidized rental housing would be affected by an
SRE.
Owner-occupancy is the only eligibility criteria for a residential property to qualify for an SRE. It
is described by the Massachusetts Division of Revenue as the owner's primary residence where
family, social, civic and economic life is centered and where the homeowner plans to return
whenever he or she is away. Owner-occupancy verification is determined by local policy, and
may be confirmed by tax returns, driver's license, utility bills or other evidence.
describes Massachusetts' State Residential Exemption (SRE) in detail, provides
quantified examples of direct effects, discusses the expected indirect effects, defines key
concepts, and clarifies misunderstandings articulated at the Committee's two public hearings.
A direct effect of SRE adoption would be to lower property taxes for owner-occupied homes with
assessments that are below a breakeven point' and increase property taxes for owner occupied
homes above that breakeven point and for all non-owner occupied properties.
• An owner-occupied home at the breakeven point would experience neither an increase
nor decrease in property tax due to the SRE.
• The impact on owner-occupied households is proportional to how far above or below the
breakeven point their property assessment is.
'The breakeven point (approximately $1,150,000 in FY2019) is the total of residential value in
Lexington divided by the number of owner-occupied properties receiving a residential
exemption.
8
• The breakeven point is irrelevant to non-owner-occupied properties because all such
properties would experience tax increases of the same percentage.
The financial impact of the SRE is Select
Board. At the higher exemption rates, for owner-occupied properties near the extremes of
assessed-values, tax impacts could amount to thousands of dollars per year. All
non-owner-occupied homes would also see large impacts. Tables and charts are provided both
to illustrate these effects, and also to compare Lexington's current and SRE modeled property
taxes with example communities. An appLendaix extends these charts to numerous adjacent,
peer, and competing communities.
Over the long term, the SRE has an indirect effect by incentivizing ownership housing and
disincentivizing rental housing. This policy could have lasting effects on Lexington housing and
demographics, hypothesized to include the following:
• Absentee homeowners may prefer to sell their homes due to higher taxes rather than
lease them to others.
• Rental units may be converted to condominiums, because, with an SRE, �aach
condominium unit caL_gi by qualifying for its own residential exemption.
• Conversion of rental units to condominiums would shrink the rental market, which would
likely increase area rental rates.
• Converted rental units could reduce economic diversity in Lexington by displacing
asset-poor renters.
• Increased numbers of owner-occupied housing due to ownership incentives could
increase the total number of residential exemptions and therefore reduce the tax benefit
for each owner-occupied home.
At the Committee's Economist and further indirect effects
were discussed:
• Economists hypothesize that tax a tax
decrease for lower-valued properties, such as condominiums, initially makes these
properties seem more affordable, this improved affordability would be expected to make
them more attractive to buyers. Many buyers are constrained by ability to pay and will
apply their tax savings or tax loss to the purchase price. Purchase affordability could
drive an increase in market value for lower priced properties causing their tax
assessment to subsequently increase. The opposite would happen for higher priced
homes and multi-tenant properties which would find their values and subsequent
assessments declining. These housing market adaptations to SRE implementation are
anticipated to reverse 28% of the initial tax shift.
• SRE-prompted changes in property values are hypothesized to make a residential
exemption a single-generation affordability benefit. Current owners would receive both
an adjusted tax bill and an adjusted market value, while future property buyers would
purchase a property whose value had already shifted in the opposite direction from the
9
tax shift. Future owners would not realize any net affordability benefit when purchasing a
Lexington property.
The Committee combined survey data (see Chapter 2)with the projected direct effects of the
SRE finding that:
• The SRE would not o hava3ignff[Qant
houabg-jima.
• The SRE could adv ss.
After identifying deficiencies of the SRE, the Committee sought and was granted an enlarged
scope by the Select Board to additionally examine Means-Tested Residential Exemptions
(MTRE), and to evaluate them in comparision to the SRE.
ChapLer 6 examines Means-Tested Residential Exemptions (MTRE), which are tax exemptions
given to qualifying residents based on criteria that include income, asset, age, and residency
thresholds.
• MTREs of two basic setts towns
through Special Legislation (state approval), and provide meaningful assistance to
qualified households.
• MTREs can have an unintended side-effect ofi by
decreasing property taxes.
• Using survey data from Chapter 2, the Committee projects that typical means-tested
exemptions would precisely target beneficiaries with limited means, however the m&rity
of residents
In view of inherent limitations and side-effects of existing MTREs, the Committee recommends
that Lexington evaluate creation of its own MTRE variant rather than directly copy from existing
models.
Chapler 7 outlines two new models for possible Lexington-specific exemptions which could be
further developed through community conversation:
• A Circuit BreaKgLa1yta_M=with guidelines to avoid unintended consequences such
as reduction in Circuit Breaker benefits or penalties for surviving spouses.
for seniors over 80 years old.
These proposals target two different populations in Lexington. Detailed notes are provided to
guide future legislation away from limitations identified in current programs. Because eligibility
for both of these proposed MTRE models attaches to the homeowner rather than to the
property, minimal impact on housing values is anticipated.
Conclusions summarizes final thoughts and provides eight recommendations.
The Committee urges policy makers to review the detailed
which provides insight on housing stress and migration attitudes in relation to age, income, and
home value, as well as general concerns about taxes. 'Tax benchmarking against peer and
neighboring communities, along with survey data, could be used to inform many Town projects
10
and policies. This research suggests an interaction between taxes, demographics, and
migration which policy makers should further examine to improve Lexington's position in
attracting and retaining residents.
Recommendations
No proposed exemption directly targets all residents experiencing high housing cost stress. The
SRE and existing MTREs present the possibility of unintended consequences including changes
in Lexington home values and housing types, reduced economic diversity, the direction of
benefits to unintended recipients, increased taxation of already-stressed households, and a
reduction in State aid to qualifying beneficiaries.
As a result of these findings, the Committee unanimously makes the following eight
recommendations to the Select Board, spanning actions for local tax policy, advocacy at the
state level, and areas for additional study. Committee members reached the recommendations
based on evidence presented, but individual Committee members found their own basis in this
evidence differently. Below each numbered recommendation we enumerate rationales that were
used by one or more Committee members to support their position:
Local Tax Policy:
1. Do not adopt the Massachusetts Residential Exemption (SRE).
a. The benefit is not targeted to those in need: Data from our survey shows that
concerns about span renters and owners, low
value homes and high value homes, and an SRE would offer tax relief to only a
portion of those with need. It would also provide benefits to other residents who
are not experiencing housing stress.
b. Taxes would increase on
residents
c. The SRE increases the potential for rents to increase either through direct
pass-through of tax increases or indirectly because landlords may be incentivized
to convert apartments to condominiums which will reduce the supply of rental
units, thus changing the market conditions that influence rents. Survey data
shows that renters n
d. Using Lexington tax monies to provide local tax exemptions may reducg_pLQperty
tax rebates that 447 moderate income households receive under the
Massachusetts Senior Circuit Breaker Tax Credit (2016). The net benefit for
these households will be less than anticipated and local tax monies will be
wasted by these offset losses.
e. An SRE does not lower the aggregate residential tax burden in Lexington; it shifts
a portion of residential taxes from a majority of residents to a minority who own
more expensive homes or non-owner occupied properties.
f. An SRE would increase the property tax on , making
these developments less competitive in Lexington. As the population ages and
11
attitudes about housing ownership evolve, Lexington should promote rather than
discourage evolving residential housing solutions.
Q. By providing a tax incentive to owner occupied housing over rental housing, the
SIRE provides e benefit to owner occupigdcondominiums over rental units. |f
landlords were to convert housing stock from rental to ovvnanship, housing and
economic diversity in Lexington would be diminished.
h. Incentives created by a residential exemption may cause actions by owners of
non-owner-occu pied properties that increase the total number of exemptions
granted. These actions include the selling of rental properties to owners who will
occupy the property, the conversion of rental properties into owner-occupied
condominiums, and the development of empty land. /\n increased number of
exemptions would mathematically lower the net exemption benefit.
i. When an SIRE lowers property taxes associated with a home, economic theory
suggests that the price of that home would increase. If this were true, then the
present occupant would receive a double benefit (reduced taxes and higher
home value)while the future purchaser would receive no net benefit (higher
home purchase price required to purchase lower taxes). This dual effect means a
residential tax exemption iaesingle generation adjustment with no long term
benefit for affordability of Lexington homes. Additionally, a higher purchase price
offsetting lower taxes could favor future buyers with more assets and higher
credit scores over those with less, giving preference to economically advantaged
buyers.
' As . 2896of the suggested tax adjustment ioundone
through hypothesized impact of that tax adjustment on housing prices.
h. The SIRE is hypothesized to make it easier for Lexington residents to cc remain in
their homes" by reducing property tax stress. Our survey investigated whether
there was a relationship between home value and likelihood of migration. The
survey results show that beneficiaries of an SIRE have a lower self-forecasted
migration probability and therefore it seems unlikely that creating an SIRE would
materially impact migration.
|. Owner occupancy verification required byen SIRE io time consuming to
administer and verify, especially for properties held in some types oftrusts.
2. Develop for community consideration a proposal for ammeans'tested and/or
age-based residential exemption.
a. A means-tested residential exemption can be designed to provide aid to those
residents who have high property taxes in relation to their income.
i. Survey results show that low income is more
. Thuo, income targeting tax relief
would more precisely reach those with economic need.
ii. Survey data shows that residents who meet all criteria of typical
means-testing (income, age, home value, years of residence) are unlikely
to have children in public schools, and therefore are net contributors to
town finances even with reduced taxes.
12
iii Because e means-tested exemption would affect e small number of
households, it would not materially change tax levels for most residents.
ix Because a means-tested exemption would target the household rather
than the property, impact on home values should baminimal.
V. However, a means-tested residential
agUmanLgf_EgajdgnLs, vvhi|a survey data shows that e large portion of
residents experience housing stress or express open comments of
concern about property taxes; an exemption alone, no matter how
vve||-tei|oned, will not provide relief toall tax-stressed residents.
b. An exemption which targets the oldest members of the community can provide
financial predictability for eoubpopu|etionwith limited flexibility.
i. Residents are living longer, and a greater number of older seniors (8O+)
will live in Lexington in the future.
ii. Older seniors are often unable to take on additional work toaugment
income.
iii. Although older seniors have lower self-forecasted migration, anecdotal
evidence suggests that alternatives are expensive and not attractive,
forcing some ofthese residents to remain in their homes even in
deteriorating conditions.
ix Older residents are more likely to experience the death ofespouse,
which reduces rather than increases economic support from existing
policies such es the State Circuit Breaker.
V. Older seniors are unlikely to have children in aohoo|a, and therefore are e
portion of the population which are net contributors, even if their property
tax bills were to remain unchanged after age 8O.
vi. /\simple model suggests that providing e property tax freeze toresidents
age 8O and above would have e one-time tax effect but would likely cause
little impact after that point. However, if the tax policy were also to extend
Lexington residency among more older seniors, e resulting reduction in
public school children could provide some relief for operating and capital
budgets.
vii. Because on exemption for older seniors would target the household
rather than the property, the expected impact on home prices would bo
rninirne|.
viii. However, itia acknowledged that our survgy does not show that seniors
an elevated likelihood
gjjnjgra�m. Nonetheless, survey results suggest that migration decisions
occur eten earlier age, and therefore households may boanticipating
benefits and costs of retiring inLexington.
3. Promote awareness of existing programs such as tax deferrals, exemptions, and
the Massachusetts Senior Circuit Breaker Tax Credit.
e. Panelists et the Housing Policy and Economics Roundtable Discussion
suggested that the Town could increase awareness of existing programs.
13
b. Residents may not recognize the Circuit Breaker Tax Credit as related to property
taxes because the application is part of the State income tax return process. It is
possible that some eligible community members are not submitting this form.
c. The Committee learned that this tax credit may be lost by some who would
receive an SRE, and therefore public education may also help residents realize
that Lexinaton can not
gai"rfiall -offset oderate
incomes.
4. Evaluate increasing eligibility thresholds significantly for the Lexington Tax
Deferral Program.
a. Income thresholds prevent some Lexington residents from using deferrals; 42
Increasing eligibility thresholds
will enable more residents with financial concerns to avail themselves of
assistance.
b. Some argue that targeted tax relief benefits heirs at the expense of community
members, making deferrals preferable to exemptions.
State Advocacy:
5. Advocate for expanded access to tax deferrals for homeowners with existing or
future mortgages and home equity loans.
a. Anecdotal evidence provided by committee members and at public hearings
indicated that some residents are blocked from obtaining a tax deferral by a
company holding their mortgage or equity loan.
b. It is hypothesized that one reason
in FY2018, may be that mortgage holders do not approve the local tax liens that
are part of the deferral process.
c. Panelists agree that deferrals are an important public policy and that action to
ensure that mortgage or equity loan creditors cannot easily block tax deferrals
would benefit residents seeking such deferrals.
6. Advocate for expanded access to the state administered Senior Circuit Breaker
Tax Credit for surviving spouses and those with homes above the current
eligibility threshold, as well as expanding the level of rebate.
a. A concern was voiced in the Committee's second
s as a distingLqroup. On the
loss of a spouse, income cut-offs for single individuals may disqualify surviving
spouses from Circuit Breaker rebates.
b. The existing cap of$1,100 property tax rebate is inadequate assistance for the
size of property taxes in Lexington in 2019.
It should be noted that despite low deferral participation, Lexington has the third-highest Tax Deferral
participation rate in the State.
14
Further Study:
7. Further study the financial needs and supports necessary for Lexington's
population of older(80+) seniors to "age in place".
a. Our oldest senior residents may experience different housing and financial
challenges than younger seniors, a concern voiced in the Committee's second
2UWLb92dR9.
b. Supports unrelated to property taxes also might be created for older seniors to
"age in place", but further study is needed to identify those supports.
8. Further study methods to retain middle-aged residents, who have the highest rate
of self-forecasted out-migration among all age-cohorts in our survey.
a. Surve sum self-forecast of
migfalign and these residents may have the highest capacity to afford
Lexington's taxes.
b. Anecdotal evidence combined with the survey data leads the Committee to
believe that out-migration for the aging population occurs within a few years after
children graduate from Lexington public schools rather than mid-retirement.
Therefore, the community needs to understand these migration trends to
enhance Lexington's economic stability and make aging in Lexington a realistic
long term option for more households.
While the Committee does not recommend the SIRE nor a direct copy of an existing MTRE,
committee members feel that responding to property tax concerns is urgent and important.
During this Committee's term, we heard the voices of residents at public hearings and undertook
a survey which shows that residents express consistent
® Therefore, members of the Committee urge Lexington's leaders to review these
recommendations and take timely actions to support resident concerns about taxes while
remaining in Lexington.
15
Introduction
A growing school population and a number of significant school and town capital projects have
increased financial pressure on Lexington taxpayers. While the Massachusetts Residential
Exemption (SRE) has been available and unused in Lexington for decades, it remained unclear
whether this law would be an effective tool for tax relief. Therefore, in early 2018 the Lexington
Select Board formed an Ad Hoc Residential Exemption Policy Study Committee (in this report,
"the Committee") to examine whether instituting a residential property tax exemption would
serve the interests of the Lexington community.
The Committee was appointed and presented with this charge:
"Preserving affordability for residents is the Board's top financial goal. This ad-hoc
committee will... study the Residential Exemption and analyze if adopting the exemption
could help reduce the property tax burden and make it easier for residents to remain in
their homes. The ad-hoc committee will focus on identifying policy questions and will
make recommendations to the Selectmen regarding the residential exemption."
The SRE is a local option available to all municipalities. When applied, it allows the Select
Board to set a uniform flat exemption to all owner-occupied residential properties. A provision of
the law maintains municipal revenue at the same level by increasing the residential tax rate by a
compensatory amount. The exemption then has the effect of reducing taxes on residential
properties with low assessed value, increasing taxes on residential properties with high
assessed value, and substantially increasing taxes residential properties which are not
owner-occupied. This exemption is used by only 16 of the 351 municipalities in Massachusetts,
and communities adopting it are characterized by significant numbers of properties which are
not owner-occupied.
After several months of study of the SRE and a first public hearing, the Committee determined
that it should also study state-approved local ordinances which provide means-tested
exemptions. The Select Board supported this requested and extended the Committee's charge
and timeline through the end of 2018. The Committee then expanded its scope to include
means-tested exemptions which are presently adopted in Sudbury, Concord, Hopkinton,
Reading and Wayland.
Means-Tested Residential Exemptions (MTREs) vary across communities, but share the
characteristic that eligibility for the exemption is limited to those who qualify, primarily on the
basis of income and age. These exemptions typically also have requirements for
residency-length, home value, and assets besides one's primary residence. The Committee's
study and this report also encompass an evaluation of these exemptions, which could be
adopted in Lexington through a home rule petition to the Massachusetts legislature.
4
16
After reviewing a prior working group's output and the few reports produced by other
communities, the Committee set an ambitious course of seeking more data and expertise to
inform this analysis. This report describes the results of two public hearings, a roundtable with
real estate brokers, a second roundtable with housing policy experts, and a data analysis of a
Services and Housing Stress survey which reached 7% of Lexington's adult population.
Furthermore, the Committee consulted with assessment staff in Lexington and other
communities to learn about implementation experiences with residential exemptions. This new
empirical research was combined with data on Lexington demographics and ownership to
provide an overview of how residential exemptions would impact Lexington.
Modifying a community's taxation policy impacts not only tax bills, but can impact demographics,
the type of housing, affordability, budgets, and tax policy for decades. We encourage the
community to read this report and debate the present tax policy and proposed changes, and
how adoption decisions could shape Lexington's future.
17
1. Criteria for Examining Residential Exemptions
As the Committee deliberated the pros and cons of various residential exemptions, many
considerations occurred to the Committee. Who gains and who loses? Can apartment owners
pass through taxes as increased rents? What would happen to housing prices? Should
Lexington's tax policy impact a snowbird who lives part time in Lexington?
With many potential intended and unintended consequences (or"second order effects"), it is
challenging to provide a clear and consistent framework. Moreover, effects which seem more
"fair" or desirable to one, may seem patently unfair to another.
Direct, Intended Consequences
The Committee Charge includes the phrase "if adopting the exemption could help reduce the
property tax burden and make it easier for residents to remain in their homes." Interpreting this
charge, the Committee identified two interpretations for the phrase "easier for residents to
remain in their homes".
Economic and Psychological Impact on the Household
A common complaint is that Lexington property taxes make it difficult for residents to remain in
their homes because large tax costs displace necessary expenses ranging from food, energy,
and medical expenses to entertainment. Moreover, even if the economic impact is not a
hardship, the stress that some residents may feel in realizing that property taxes are among
their largest annual expenses can create a sense of stress and alienation from the town. The
Committee's first interpretation of the phrase "easier for residents to remain" is an attempt to
measure for each type of residential exemption whether it significantly impacts economic and
psychological stress in the household.
Impact on Household Migration
Practical interpretation of the phrase "easier for residents to remain in their homes" suggests
that the objective is met if residents in fact would more often remain in their Lexington homes. In
other words, would adopting a residential exemption impact migration decisions of residents?
Some feel that high property taxes have the impact of"forcing" some residents to leave
Lexington. A typical political argument is that if the tax burden is decreased, fewer residents will
in fact leave Lexington. A literal interpretation of the charge was then to leverage data and
expert opinion to evaluate whether residential exemptions would impact decisions made by
Lexington households.
Indirect and Second-Order Effects
Beyond the specific economic and migration impacts of a residential exemption, the Committee
found a wide range of impacts which could ripple through the community. We felt these impacts
could not be neglected, though they fall outside the wording of the charge. Key categories of
these indirect effects also were evaluated for each type of exemption.
18
Housing Impact
Residential exemptions may impact housing in several respects: the balance between
owner-occupied and non-owner-occupied housing may shift while rents and prices may be
affected. For each exemption type, the Committee identified the anticipated housing effects.
Lexington Budgetary Impact
If a residential exemption succeeds in making it easier for residents to remain in their homes,
one should expect a demographic shift to occur and some change in out-migration patterns.
Because demographic shifts impact utilization of local services and, in particular, public school
enrollment which is by far the most expensive service provided by the Town, a residential
exemption might be expected to impact operating and capital costs for Lexington. For each
exemption type, the Committee evaluated possible budgetary impact.
Equitable Taxation
Real estate property taxation is grounded in a concept that owners of more property have
greater ability to pay than those with less property, and therefore tax policy should be related to
that property. This concept of tax policy is enshrined in the Massachusetts Constitution which
provides for equal taxation rates on each class of property. The Committee examined how each
exemption type impacts concepts of tax fairness. Each exemption policy departs from
residential proportionality under some conditions. We identify these conditions and describe how
they can relate to tax fairness.
Evaluative framework
Any potential policy tool created to address the criteria we have described above should be
evaluated for how well it will help target residents, and how well it avoids assisting those outside
the target. Providing tax relief to those struggling seems a significant goal; providing tax relief to
those who are not struggling is an undesirable outcome. It may not be possible to meaningfully
assist all of the former at the exclusion of the latter. Potential public policies can be compared by
how effectively tax relief reaches the target population. In the interpretive portions of this report,
we will use the terms precision and recall (borrowed from data science) as a framework for
evaluation:
Precision: Out of the group of people that receive benefits from an exemption, how many of
them are the intended beneficiaries? The fewer unintended beneficiaries, the higher the
precision.
Recall: Out of the intended beneficiaries of an exemption, how many of them will receive
benefits? The more intended beneficiaries included, the higher the recall.
By employing precision and recall as evaluation metrics, the Committee is able to leverage data
to quantify how effective exemption public policies are likely to be in their direct consequences.
Separately, this report also describes indirect consequences of public policies, which must also
be considered by policy makers.
19
2. Housing-Cost Stress and Out-Migration in Lexington
An Analysis of the Public Services and Housing Costs Survey
The Committee undertook a detailed survey of Lexington residents with a goal of increased
insight into financial housing stress and migration, and how these insights might relate to
proposed residential property tax exemptions. We wanted to assess what portion of the
community experiences high stress related to property taxes, how property taxes and high
stress relate to migration decisions, and whether proposed tax exemptions would benefit
members of the community with greatest need or least use of services. This section of the
report considers survey data as a source of evidence that, by itself, does not constitute a
comprehensive assessment of residential exemptions.
The Committee created a survey in summer-fall 2018 and administered it in the
October-November 2018 time frame. The survey yielded 1,475 responses from Lexington
residents, or approximately 7% of the adult population.
The survey allows assessment of whether relationships exist between demographic and tax
levels along with two behavioral variables: housing stress and likelihood of leaving Lexington
within ten years (migration). While behavioral variables describe subjective experiences, the
Committee believes the broad outlines of the results provide insight into residential exemption
policy. Per the Committee's charges, two goals of a residential exemption would be to assist
those with high housing stress (especially when property taxes contribute) or to impact
decisions to leave Lexington. To discuss measurement of possible policies, we use the
conceptual framework of precision and recalls Precision is the percentage of those helped by a
policy who are in the class of intended beneficiaries. Recall is the percentage of all intended
beneficiaries assisted by a given policy.
A complete description of this survey, including participation, evaluation of response
demographics, illustrative charts, statistical analyses, and responses to open-ended questions
is provided in the appendix to this report. Moreover, all data without personally identifying
information (Pll) will be published. This chapter will summarize key conclusions of the survey,
and the appendix can be referenced for complete analysis.
Each conclusion will be identified along with relevance to the Massachusetts State Residential
Exemption (SRE) or aMeans-Tested Residential Exemption (MTRE). These exemptions are
described in more detail in later chapters.
5 https://www.lexingtonma.qov/sites/lexingtonma/filesluploads/acl hoc,�e�exem oolic�committeegchar9e-101518.odf
6 https://en.wikipedia.org/wiki/Precision_and_recall
20
Housing stress
A first set of insights relates to housing stress, which is the frequency with which owners or
renters report that they experience stress related to housing payments. Housing payments may
include mortgage, equity loans, home improvement, utilities, or property taxes. The Committee
sought to determine whether property tax remedies would materially assist residents
experiencing housing stress.
1. Renters report high housing stress more often than owners.
The survey provided unequivocal evidence that renters are more often stressed by housing
costs than owners. 58% of renters report high housing stress, as compared with only 18% of
owners.
High Housing Stress Reported
Rent
n
This finding argues against adoption of the State's Residential Exemption (SRE), because the
SRE would increase taxes on owners of rental properties which may be passed through to
21
renters. Additional indirect effects of increased tax rates on rental property may include
apartment conversion to condominiums (to avoid the higher tax rate and let individual
condominium owners take advantage of the exemption) and increased apartment rental rates
(due to lower supply of apartments).
2. High housing stress is reported at all ages, lengths of residence, incomes, and home
values.
This finding argues against adoption of the SIRE, because the SIRE would provide relatively low
precision: many of its beneficiaries report medium or low levels of housing stress. At the same
time, an SIRE would increase property taxes for those awning homes above the breakeven
point; some of these owners already report high levels of housing stress.
Age 9 9 Stress(Owners)
2.High Stress 2.High Stress
80+ 19 38 so 56 50
Only inicludes,respondents responsible for housing costs,. Only inicludes,respandents,responsible for lhous�inq costs,.
22
Income v.Housing Stress(Owners) Home Value v.Housing Stress(Owners)
11111111111111111 2.High Stress 11111111111111111 2.High Stress
1.Metliumi stress z0% 69 k 1.Medium Stress
gzoo,000+ 32% 57% D.pow Stress 4z 000.000+ 11 38 0.pow stress
145 260
¢1,750,000-1,999,999 38% 49°/O
17 ZZ
$150,000-199,999 40°k 40%
67 67
$1,500,000-1,749,999 32% 54'°a
27 45
$100,000-149,999 37% 32°h 52%
76 93 41,250,000-1,499,999 47 66
E >
0
5 E
300 1
$75 OOo-94,999 36% 37%O ¢1,000,000-1,249,999 3�
32 33
$750,000-999,999 36% 45%
145 181
20 30
$500,000-749,999 30% "%
53 78
3Z% 39%
lfi 10 $0-499,939
9 11
knly includes respondents,responsible for housing costs. only includes respondents,responsible for housiniq costs.
A note on interpreting stacked horizontal bar charts on stress and migration:
Colors: colors have been chosen to represent levels of the parameter being measured, in
most cases "housing stress" or"forecast of intent to move". Stress and intent to move were
measured on a five or six point scale, but adjacent categories are grouped to be easily
interpreted using a three color scheme.
Stacked bars: Each row corresponds to the entire number of respondents meeting the criteria
labelled on the left (100%). A colored bar is shown with area proportionate to the respondents
in that category (percent). Below the primary label showing the percent value is an integer
value, representing the actual number of respondents. This actual number can be used to
interpret the significance of the finding, as small counts (<20) have less reliability than higher
number counts.
Interpreting percentages: these charts indicate the frequency with which respondents report a
sentiment of the questioned intensity, which is different from respondent intensity. The
language in the report uses the term "frequency" to reference how often respondents
indicated an issue.
3. Income is a better predictor of housing stress than is home value.
This finding (bottom left figure in the prior section) illustrates that ameans-tested residential
exemption based on income would provide for the higher precision than a SIRE based on home
value. Note the higher rates of housing stress at lower income levels (bottom left) in comparison
to rates of housing stress at lower home values (bottom right).
23
4. Means tested targeting offers higher precision than the State's Residential Exemption
(SRE), but low recall.
This chart uses survey variables to construct an approximation for eligibility to a generic means
tested exemption, and shows stress levels for those with value 1 (eligible) v. 0 (ineligible):
In Tested Approx Qualified v. Housing Stress(Owners)
2.High Stress
I.Medium Stress
D.Low Stress
28% 31%
20 22,
Cr
X
0
4g�
0-
34% 49%
'3183 562
Dnly inEduides,respmdents,responsible for housinig costs.
Only a small portion of households that responded to our survey would benefit from an IVITRE
(low recall), but a means-tested exemption would have higher precision. High precision means
that most beneficiaries have the target criteria (high housing stress). However, an IVITRE would
have low recall, because only about 10-15% of homeowners experiencing high housing stress
would be eligible. We conclude that neither the SRE nor an IVITRE offers both high precision
and high recall: helping many who need assistance while ensuring help lands mostly with those
who need it.
24
Migration potential
A second set of insights relates to a question about future migration. Residents were asked
whether they anticipated migrating from Lexington in the next ten years. The survey allowed us
to examine the relationship between high likelihood of departing Lexington and demographic
variables.
5. Renters are more likely to migrate than owners.
Owning n Renting v Migration
Likely
e Ut ra I
Un hkelIIy
Font:
%
Own
4% 1%,
42 386
nly iiniclue es,respondents responsible For housing costs,
51% of renters forecast leaving in the next 10 years compared to 34% of owners. We would
expect renters to constitute a more transient population, and yet find it noteworthy that 34% of
owners also anticipate leaving Lexington. The Committee has no benchmark to evaluate this
percentage, but notes that it seems a high rate for anticipated migration, as actual migration
would also include unexpected life changes and events beyond what survey residents can
forecast.
25
6. Housing stress significantly drives migration for homeowners.
Housing Stress v. Migration (Owners)
Likely
Neutral
Illllllllllllllllllil���lllllllllllllllll������
4.Substantial 18% 20%, Unlikely
3.Sign if icant
27%, 18%,
46 31
Illlllll������������iiiii�l
2.Some 35% 26%
140 103
0
IIIIIIIIIII
1.Litfle 41%, 38%,
�117 �1,10
III n����ulii
0.None 35%, 41%,
�104 121
Pnly induldes,responidents,responsible for housing costs. I
We see a strong relationship between housing stress and forecasted out-migration. This survey
does not prove that a causal relationship exists, only a correlation is demonstrated between
housing stress and anticipated migration.
26
7. Home value and income are not significant predictors of migration for homeowners.
uuuuuuuuu �t�
Value v.Migiration,(Owners) Income v.Migiration,(owners)
IIIIIIIIIIII Likely IIIIIIIIIIII Likely
$2,000,000 33 33% Neutrall Neutrall
+ Unfikely $200,000+ 29% 41%, Unfikely
130 188
aAaaw
$1,750,000-1,999,999 28% 33%,
13, 15
$150,000-199,999 37%, 29%
62 49
$1,500,000-1,749,999uuuuuuuuuiNNhnnnnn� 26% 39%,
23, 34
$100,000-149,999 37% 24%
$1,250,000-1,499,999 36% 33% 77 51
46 42
>
0
U
E
0
T$1,000,000-1,249,99iiiiiiiiiiiiiiiiii���������� 36% 30%
42 22
107 90 $75,000-99,999 38%, 20%,
$750,000-999,999 32% 30%
'129 '122
$5,0,000-74,999 30% 21%
22 15
$500,000-749,999 42% 30%
78 55,
��������
$0-49,9,9919iiiiiiiiiiiiiii �������� 36% 36% $0-44,999IIIIIIIIIIIIIIIIII 42%, 26%
'10 '10 24 !15
Pnly iincludes respondents responsible for housing costs. Pnly iincludes respondents responsible for housing costs.
The finding that home value and income do not predict migration demonstrates that an effective
public policy to address migration concerns would have to address housing stress without
simply relying on home value or income as proxies for stress. Surprisingly, those with the lowest
income levels or home values have depressed levels of migration relative to those with median
incomes and home values. One conclusion is that owners with the lowest incomes and home
values may feel precluded from relocating by economic considerations. Another conclusion is
that a direct application of SIRE or MTRE might not be expected to reduce migration
significantly!
'Note: As the Committee has not compared migration rates with other communities or looked at
changes over time,the extent to which there is a migration "problem" in Lexington is not known.
27
Means Tested Approx Qualified v. Migration (Owers)
imii LI ke I y
Ne ILA ra I
Unlikely
,40% 29%
29 21
Cr
X
0
CL
CL
U)
0-
34,%, 32%
395 365
knly incluides,respondents,responsible for housing costs.
The chart above categorizes survey respondents into those which are quite similar to
(approximately qualified) for a typical means-tested exemption (1) and those which are not
qualified (0). This chart shows very little difference in migration forecasts between the qualified
population and other respondents. Therefore, the data does not provide evidence of migration
impact for the targeted group with a means-tested exemption.
We conclude that both SRE and MTRE approaches may assist in reducing housing stress for
some portions of our community, but it is unclear that these programs would change how long
people stay in their homes.
28
8. Middle aged populations have the highest forecast of migration.
.Age v. Migration (Owners)
likely
80+ 4333% 3 % Neutral
Unlikely
' 278
IIIIII169!g,;,;f;,;puuuua,','+"',
70-79, 47% 24%
83 42"
60-169- 32% 29%
67 62'
g,o-59,- 35% 16%
1 104 49
40-49— 31% 39%
1,10 135
IIII 9kkFNNNNi
30-39- 23%, 58%
23 59
0-29- 25% 75%
1 31
Dnly induldes,respondents,responsible for housing costs,
The survey data shows that expectation to leave Lexington is highest among 50-59 year olds,
with about half of residents in this age category expecting to leave Lexington within 10 years. A
residential exemption with a requirement of age 65+, such as most existing models for IVITRE,
would not benefit this population. Instead, an age 65+-targeted exemption would help a group
that is self-forecasting lower levels of migration. It appears that senior residential exemption
programs target populations which in Lexington have lower levels of forecast migration or
mobility.
Open Response Comments
9. Lexington residents are quite concerned about the steady increase in local taxes
The survey was constructed to focus initially on town services, and yet residents used the first
open response question to raise concerns about property taxes even before the first explicit
29
mention of taxes in the survey. Many respondents expressed gratitude at the opportunity to
share their feelings about taxes and about housing stress, and appreciate that the Town is
listening. The appendix provides an enumeration of the most frequent words used in open
response comments and sample quotes.
Key repeated points from open response comments:
• High property taxes are on the minds of many Lexington residents.
• Fixed income residents or those approaching retirement are concerned about how to
manage large and increasing property tax burdens.
• Residents do not understand why taxes continue to escalate at a high rate, and some
feel Lexington government spends beyond what is necessary.
• Residents would like to stay in Lexington, but some find the cost prohibitive.
• Some residents feel the town services are great, while others feel they are too few for
the high property taxes that they pay.
• Medium and long term residents report that their taxes have tripled or more since
moving to Lexington.
• Residents in unimproved, small homes do not understand why their property taxes are
substantial.
• Property taxes increase much faster than inflation.
Statistical Study
Our multivariable study suggests that property taxes may impact propensity to move via housing
stress, but the effect is minimal and really only exists for those for whom property taxes
constitute the preponderance of monthly housing costs.
Summary
In summary, Lexington residents are concerned about housing costs and property taxes across
a wide demographic spectrum. Fixed exemption programs like the SRE which shift taxes from
low assessed value homes to those with high assessed values would have low precision as
many beneficiaries do not have high housing stress, and such a program would shift higher
taxes on to other residents--including numerous residents who experience high housing stress.
Those receiving a higher tax burden may include those at a life stage and with financial
resources to respond to a tax shift by migrating from Lexington. A residential exemption could
exacerbate migration patterns. Thus, the survey data does not provide support for the state
residential exemption.
A Means Tested Residential Exemption could be structured to provide higher precision, with
many beneficiaries who experience high housing stress. The limitation of such a program is low
recall: fewer than 15% of residents reporting high housing stress would benefit from such an
30
exemption. As a targeted program it may seem more attractive than the SRE, but it will have
very limited scope and yet carry higher implementation costs. (see CbopLer 6)
Residents have voiced concern about the overall level of property taxes in Lexington, and
neither exemption provides across-the-board tax relief to all residents. To address these needs,
the Town would have to look to actions outside the scope of this Committee.
The stress of owning a home in Lexington may not be evenly shared; a high stress burden
occurs across a wide spectrum of Lexington's homeowners. Any public policy which addresses
the needs of some homeowners will necessarily shift this burden onto other homeowners or
onto renters, who may also feel burdened. Policy makers need to take resentment and burden
shifting onto already-burdened populations into account when making such a shift.
31
3
. Property Tax Relief Measures Currently Available
to Lexington Residents
Town Programs
The Committee examined programs in place in Lexington today to assist homeowners with
property taxes.
Property Tax Exemptions
The Town of Lexington has adopted most local-option tax exemption programs enabled by State
legislation and has expanded all program benefits to the maximum extent allowable by statute.
Most programs are designed to aid veterans, blind people, surviving spouses of firemen and
policemen killed in the line of duty, or income-qualified seniors. An exemption from the Town's
Community Preservation Act Surcharge is the only local property tax program that applies to
income-qualified property tax payers of any age.
Tax Exemptions are a cost to the Town, partially reimbursed by the State. The cost of FY2018
property tax exemptions is estimated to be approximately $201,000. The State reimbursement
is estimated to be approximately $89,000.
IIIIIIIIII �I' ppppl IIIIIIIIIIII VV
pµw Allli wM Allu unW ^W emu. pull, Allu M
liu
IVu u
Massachusetts General Laws Abbreviated Description FY2019 Exemptions
Chapter 59, Section 5 More qualifications and details Exemption Granted
Exemptions will apply Amount In FY2018
(latest available data)
Clause and Name
17D Surviving Spouses, minors or Total assets other than house of less $350 2
persons 70 years or over than $40,000. No income limit
18 Hardship. Hardship due to age, infirmity and 100% 0
poverty.At discretion of Board of
Assessors
18A Temporary Deferral-limited Financial hardship due to change to 100% 0
duration active military status
22(a-f)Veterans Purple Heart recipients,or $800 65
service-related 10%disabled or
more, Gold Star Parents, and others
22A Veterans&surviving spouses Service-related loss of one foot, $1,500 0
hand,or sight in one eye, or certain
military service decoration award
winners
22B Veterans&surviving spouses. Service-related loss of use of both $2,500 0
feet, hands,sight in both eyes
32
22C Veterans&surviving spouses Service-related 100%disability and $3,000 0
living in specially adapted housing
22D Surviving spouse Un-remarried spouse of serviceman 100% 2
presumed dead,or who died due to
service-related injury
22E Veterans&surviving spouses Service-related 100%disability $2,000 8
22F PARA Paraplegics&surviving Paraplegic from service-related injury 100% 4
spouses of paraplegics
37A Blind Persons certified blind $1,000 14
41 C Certain elderly persons 65 years Low income and low assets $2,000 25
of age or over
42 Surviving spouses of police 100% 1
officers/firefighters killed in the line of
duty
CPA SURCHARGE EXEMPTION Moderate income seniors and 100% 176
Under Massachusetts General Laws non-seniors. Income limits scaled to of CPA surcharge
Chapter 44B household size. $317
avg.exemption
TOTAL 295
01-17-2019
Property Tax Deferrals
Property Tax Deferrals enable seniors to postpone paying any or all of their property tax until the
property is conveyed or they or a surviving spouse dies. Lexington's Property Tax Deferral
Program provides the opportunity for the greatest amount of property tax relief of all programs
available to seniors. In 2006, Lexington successfully petitioned the State legislature to allow the
Town to provide lower interest rates and more generous income qualifications than the State
property tax deferral law allowed at that time. In the ensuing years, Lexington has incrementally
increased qualifying income limits and has matched deferral interest rates to the Monthly One
Year Constant Maturity Treasury Rate as published by the Federal Reserve Board for the first
week in March preceding the Town's new Fiscal Year. This rate generally runs below the Prime
Rate and roughly matches the interest that the deferred amounts would have earned if the funds
had been held in Lexington's free cash accounts.' Seniors who defer their property tax may
also defer water and sewer charges.
With a total of 877 deferrals among all Massachusetts municipalities in FY2018, utilization rates
for Property Tax Deferrals are very low state-wide. Lexington has been one of the top three
8 The simple interest rates on Lexington deferrals have ranged from a high of 4.77% in FY2007, to a low
of 0.12% in 2015. The FY2019 interest rate is 1.96%. The income cut-off has increased incrementally
from $40,000 in FY2007 to $70,000 in FY2019. Each year's deferral is treated as an individual loan at the
fixed interest rate in effect in its year of origin.
33
municipalities in deferral utilization, but despite recent gains in participation, Lexington, with only
42 deferrals in FY2018, is no exception to the low utilization rates found across the State.
Anecdotal evidence suggests that seniors feel that a deferral would indicate a "desperation" that
is out of proportion to their situation, or they want to leave their home unencumbered to their
heirs. A small number of seniors who would like to defer have existing equity loans or
mortgages and are blocked from deferring by their lenders who are sometimes unwilling to allow
their liens to become secondary to Lexington's tax liens.
Unlike tax exemptions, tax deferrals are not subsidized by other taxpayers beyond any
differential between the interest rate charged and the actual cost to the Town.
Senior Service Program
Administered by Lexington's Human Services Department, Lexington's FY2019 Senior Service
Program provides a property tax credit of up to $1,540 per household for seniors with household
incomes of up to $70,000 in exchange for work performed at$11 per hour for the Town or the
School Department. This program is paid for from a line-item in the Town budget. Twelve
seniors benefited from this program in FY2018 at a cost to the Town of$13,733.50.
Utilization of Property Tax Programs in Lexington
Very small numbers of Lexington residents benefit from the Town's property tax exemption and
deferral programs. With the exception of Property Tax Deferrals, which have seen a substantial
increase in an otherwise extremely low utilization rate, the major programs have experienced
steady declines, likely due to the lower number of veterans now in Lexington and the higher
incomes of the more recent elderly population.
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<'IPRWfi�N�NW1pIUIIIIIIIIIInIVMIWY�wlIQ1101flgypdgAddNry m 'r IAIA��lalllffPff�ll
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i,: iiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiir" nn�v�irini�iiiiiiiiriam�ii�i�aiiiiiii�rranrnriaiiiirrr �r�jpr, »uiuu�iniuu.,��mnru�iiiiiiivrraiarrrivaiiaaiaaiai�iaiair
rrron�iiiiiiiir%oiaaar�r�iiiiiiiiiaiiiiii�iiiaaiirr2 8 2 8 �9 �9 f�di�i��uaamvrvrea��mra�rvaiau�K�i�uax�iuray �� �8
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7 II!U@OpU0N411�IMM
State Program
34
The Massachusetts Senior Circuit Breaker Property Tax Credit
Administered by the State through the income tax return process, this program provides a tax
credit or a direct payment from the State of one dollar for every dollar that the owner's property
tax exceeds 10% of his or her income, up to $15100. Renters also qualify for the State Circuit
Breaker when 25% of their rent exceeds 10% of their income.
Income limits, house value limits and the maximum credit change annually by a cost of living
adjustment.
This program has no cost to the Town of Lexington. In 2009, 735 Lexington taxpayers received
State Circuit Breaker benefits. The number of beneficiaries has declined steadily since then. In
Tax Year 2016, 447 Lexington seniors received Circuit Breaker benefits at an average of$1,032
each. The decline in utilization in Lexington is likely due to the Circuit Breaker's house value
cut-off. Over time, Lexington's median house value has increased faster than the Circuit
Breaker's house value limit, which is based on State averages.
State Circuit Breaker Parameters, Tax Year 2018
Income Limit Single:$58,000
Head of Household:$73,000
Married,filing jointly:$88,000
House Value Limit $7781000
Maximum Credit Given $1,100
35
4. Residential Properties in Lexington
The tax policies discussed in this report apply to properties classified as residential property per
Massachusetts law and assessment guidelines. However, the typical taxpayer or Town Meeting
Member is likely not familiar with all of the instances of residential property. This chapter
provides an overview of all residential property classes, with details specific to Lexington. The
information in this chapter serves as a reference for further chapters that evaluate how changes
in tax policy impact residential property holders.
As a matter of policy, a residential tax exemption pertains to a person's primary residence.
The Committee understands that per the Massachusetts Department of Revenue, a Lexington
home is considered a primary residence when it is the homeowner's principal and legal home,
where family, social, civic and economic life is centered and where the homeowner plans to
return whenever he or she is away. In general this definition would be unambiguous for most
citizens. However, the Committee is also aware that some citizens may live in a gray area
where they could willfully adjust their town or state of residence, legally or illegally. One
example, might be so-called "snow birds" which spend part of a year in Florida and part of a
year in Massachusetts, and may give consideration to a variety of financial incentives in
declaring residency.
Later chapters discuss both the existing State Residential Tax Exemption and possible
means-tested tax exemptions. Because these models largely benefit owner-occupied residential
properties, this chapter also provides information on which types of residential properties are
likely to be owner-occupied.
This section's data reflects Lexington residential property in Fiscal Year 2019, and what we
know of significant near term projects. While these concrete examples help examine near-term
impact, policy makers should consider the evolving needs of the community as well.
Classification of Residential Properties
The State's Residential Exemption (SRE) statute creates exemptions for particular"Class One,
residential" properties. These Code 1 residential properties are distinct from industrial, commercial,
and personal property and are defined as follows:
"CODE 1 M.G.L. Chapter 59 §2A: All real property used or held for human habitation
containing one or more dwelling units including rooming houses with facilities assigned
and used for living, sleeping, cooking and eating on anon-transient basis, and including
a bed and breakfast home with no more than three rooms for rent. Such property
includes accessory land, buildings or improvements incidental to such habitation and
used exclusively by the residents of the property or their guests. Such property shall
include: (i) land that is situated in a residential zone and has been subdivided into
residential lots, and (ii) land used for the purpose of a manufactured housing community,
as defined in Chapter 140, §32F. Such property shall not include a hotel or motel.
36
Incidental accessory land, buildings or improvements would include garages, sheds,
inground swimming pools, tennis courts, etc. Non-incidental accessory land, classified
and coded differently, would include mixed use properties, such as a variety store,
machine shop, etc. on a residential parcel."
Residential Property Types
The Lexington assessment database includes the following types of residential property:
Illlllllllllliiill I Il�l1 ;II I I��� III,, �(II
n
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IIIIIIIII I� III�� „
M sly
u
Single Family 9,030 $9,486,786,000 89.7% $19050,588 $9391000 Yes
Condominium 1,057 $62375127900 5.9% $589,889 $530,000 Yes
Two Family 159 $1357414,000 1.3% $851,660 $783,000 Yes
Three Family 11 $974517000 0.1% $8591182 $8101000 Yes
Multiple Houses 31 $4011793000 0.4% $112967097 $172567000 Yes
Four Unit Apts 1 $899,000 0.0% $899,000 $8997 000 Yes
8+ Unit Apts 8 $196,268,000 1.9% $249 533,500 $14,416,000 No
Group Living 4 $7,0201000 0.1% $117551000 $113291500 No
Child care facility 5 $770277000 0.1% $1,4057400 $1,076,000 No
Mixed Use 17 $11,022,920 0.1% $648,407 $19 082,000 Yes
Miscellaneous (106) 35 $67100,000 0.1% $1745286 $78,000 Yes
Developable Land 53 $301142,000 0.3% $5681717 $5191000 No
Potentially
Developable Land 63 $678647000 0.1% $1081952 $1091000 No
Undevelopable Land 398 $877687000 0.1% $225030 $23,000 No
Land (adjustment) $171857000 0.0% No
$10,570,638,82
109872 0 $972,281
*Parcel count is the number of assessed parcels. A single apartment parcel may provide housing for
hundreds of families, and therefore the parcel count only provides a partial view of the number of
impacted individuals and families.
**Classifications are described in
and
37
From this table, a few key points should be highlighted about Lexington's residential tax base:
• Homes which could be owner-occupied (single family, two family, three family,
condominium, and multiple houses on one parcel) account for 97% of residential
assessed value in Lexington.
• Condominiums account for about 10% of all residential parcels, but are also distinctive in
having lower median and mean assessed values than other owner-occupied properties.
• Eight commercial apartment buildings have a combined $196 million in assessed value.
A fixed residential exemption offers no real benefit to these operations, and is impossible
with commercial ownership. However, as will be discussed in a later section on indirect
effects, the apartments penalized by residential tax exemptions might be convertible to
condominiums, which are rewarded by residential tax exemptions.
• Group living facilities and child care facilities are typically operated with commercial
ownership and not owner-occupied.
• Until developed, land cannot be owner-occupied. Only 53 lots in Lexington are deemed
"developable", and tax policies could impact motivation to develop these properties.
The following sections are intended to provide additional flavor to the types of properties of each
class which exist in Lexington.
Single Family Homes in Lexington
In FY2019, the mean single family home assessment in Lexington is $1,050,588, while the
median home assessment is $939,000. The mean is higher than the median due to the long tail
of high-end residential properties, some even above the $3,000,000 truncation for the following
chart:
38
Bungle Family Homes: IIFrequency by Assessed Value (limit 000,, ,0
$3,000,000
$2,950,000
.$2,900,ODO 1
$2,850,0010
p ,
p ,
.ppd
$2,650,0010
$2,600,0010
$2,550,0010 1:
p ,a
p 50p d M15
,4 , 0 M1
$2,350,000
p , M15
.p50pd 13
.p 15 0,0 0 10, Maui/20,
p ,1 , Von=3
$1,950,0010 46,
1p 1 MM
1p ' p d 11
$1,8 0 0, ai64
1,75 0,0 0 0 ai
1, , ai 132
di
1 p , ai 111
1 p , ii 1,3
$1,400,00101,.ai 179
1p , d ai 2,39
1, , iai29,0
1 p 1'' p d air 31
1,1 , ii 31
" gip
$910,01,00,0i494
$810,01,00,0i711$7510,010101 u
$70101,01010i
/ 705
$65,101,01010i
$610,01,000i
I5 i 1, i 1 %//////////////////////////////////////////////////////////////////////////////////%255.
5.
', d ,.000-MMMMMMMMM W,
l, 1 ai33
$410,01,000
$35,101,1010101
$310d ,
$210,01,000
1 '', ''
1 ,01,
' 'N1„ N0
1: C0 0 7010
Count f Properties
The chart above shows the count of properties assessed by$50,000 increments. For example,
90 properties are assessed for amounts from $500,000 to $549,999.
This chart shows that large numbers of properties are assessed in the $600,000-$900,000
range, well below the median property assessment. This means that a large cluster of single
family home owners would receive some financial benefit from a residential exemption.
Two-Family Homes in Lexington
Two-family homes are typically assessed at lower values than single family homes, and no
Lexington two-family homes are currently assessed above $2,000,000.
39
Two Family Homes: Frequency by Assessed Vallue (limit $2,500,000)
$2,500,0010 0
$2,450,0010 0
$2,400,0010 0
$2,350,0010 0
$2,300,0010 0
$2,250,0010 0
$2,200,0010 0
$2,150,0010 0
$2,100,0010 0
$2,0510,0010 0
$2,0010,010101-0
$1,950,0010-0
$1'900'00101-0
$1,850,0010-10M 1
$1'800'00101-0
$1,750,000-0
$1,700,0010-No=1
$1,650,0010-0
$1,600,0010.111M 1
$1,550,0010-0
$1,500,0010-110M 1
$1,450,0010-0
$1,400,0010-
> $1,350,0010-1111M 1
$1,300,0010-0
(U $1,2 5 0,0 00-MOSEENSEENNNNNNOMM 4
E $1,200,0010-110000010M 2"
Ln
En $1,150,0010 4
$1, 7
$1,0510,0010 5,
< $1,0010"010101- 10,
$95,101,01010-
$91001,000-ONEEMENNEEMENNEEMMM6
$85,101,01010 5
$810,01,00,0- 13
$7510,010101- 17
$70101,01010- 15
$65,10110101()-i
i21
$610,01,000-
$55101,0101()-
$5,10,01,000-OMMMMM 2"
$45,101,01010-No=1
$410,01,000-0
$35,101,01010-0
$310,01,000 VEM 1
$2 5,101,01010-0
$2,00,000-0
$15,101,01010-EM 1
$110,01,00,0-0
$510,010101-0
$0.0
0.0 2_5 5.0 7.5 10.0 1.2.5 15.0 17.5 20.0
Count of Properties
A two-family home can have only one owner occupant, and therefore the physical structure can
earn only a single owner-occupied exemption. However, with sufficient tax incentives, the owner
of a two-family home might convert the structure to two condominiums. The effect of the
conversion would impact taxes (both condominiums could potentially receive owner-occupied
exemptions thereby lowering tax incidence) and demographic (condominium owners could be
expected to be a wealthier and more stable population than renters).
Condominiums in Lexington
With a median assessed value of$530,000, condominiums in Lexington have lower values than
two-family homes. Due to their lower assessed values, nearly all Lexington condominium
40
owners would benefit from the SRE's fixed exemption per property which shifts taxes to higher
valued properties.
Condominiums: Frequency by Assessed Value (Himit$2,500,000)
$2,500,0010 0
$2,450,0010 0
$2,400,0010 0
$2,350,0010 0
$2,300,0010 0
$2,250,0010 0
$2,200,0010 0
$2,150,0010 0
$2,100,0010 0
$2,0510,0010 0
$2,0010,010,01-0
$1,950,000,-0
$1,9 0 0,0 0 101�- I
$1,850,0010—0
$1,800,00101 0
$1,750,000 0
$1,700,0010 0
$1,650,0010 I
$1,600,0010-0
$1,550,0010-0 2"
$1,500,0010-0
$1,450,0010 0
$1,400,0010 0
> $1,350,0010
$1,300,0010-M 3,
$1,250,0010-I=5
E $1,200,00,01,-MM 5
Ln
En $1,150,0010-I=5
(U $1,100,0010-MMMMMMM 17
(A
0 $1,0510,0010 2:Of
< $1,0010,01010,-ONNEENEEMEM 25
$95,101,01010 24
$9,0101,000 32
$85,101,01010 22
$8,0101,000 35
$7510,01010, 30f
$70101,01010 48,
$65,101,01010 745
$610,01,000 72
$55101,01010 52
$5,10,01,000 119
$45,011,01010 131
$410,01,000 M 150
$35,101,01010 5O
$310,01,000-EMEMEMEMEMMMMMMMMM 41
$25,101,01010 24
$210,01,000 19,
$15,101,01010 3-91
$1,0101,000-EM 6
$510,01010,-0
1610, 1.�10 li,c)
Count of Properties
41
Large Apartment Complexes in Lexington
Eight large apartment complexes contribute about $200,000,000 in total assessments to
Lexington's residential property tax base, resulting in approximately $2,800,000 in property
taxes. These properties are comprised of 984 units with an average property tax contribution of
approximately$2,845 per unit.
J.,- = AS M I L
.,
Avalon Lexington Hills 1000 Main Campus Drive $825852,000 387
Avalon Lexington Ridge 987 Waltham Street $37,960,000 198
Battle Green 32 Worthen Road $811353000 48
Captain Parker Arms (Avalon) 125 Worthen Road $19,199,000 94
Countryside Manor 425 Woburn Road $9,633,000 51
Franklin School Stedman Road $514917000 38
Katandin Woods 307 Wood Street $25,382,000 128
1 April Lane 1 April Lane $716163000 40
$1961268,000 984
While the impact of residential exemptions on apartments will be covered in later sections, three
noteworthy points are appropriate when one considers this class of property in general.
First, apartment buildings are commercial enterprises. Yet, Massachusetts tax law taxes
commercial apartment buildings at the residential tax rate rather than the commercial tax rate.
Lexington is among a number of communities which have a "split" tax rate, where commercial
parcels pay a higher tax rate than residential parcels: for FY2019 the Lexington commercial tax
rate is $27.69 compared with $14.30 for the residential tax rate. Therefore, while one could
regret an increase in apartment building property taxes due to an SRE, another perspective is
that these businesses are operating in Lexington at a deep tax discount relative to other
commercial enterprises.
Second, and unlike other commercial businesses, apartments have a clear and negative impact
on Lexington's financial structure. The 2014 Enrollment Working Group Report indicated that in
2015) 43.6% of apartment units had school children with an average 1.46 students per
apartment with children. Therefore, the apartments collectively house about 626 public school
students. In FY2016, Lexington spent $18,003 per pupil'. So, at FY2016 spending levels, the
impact of 626 public school students would be $11,269,878. Because the total contribution of
apartments to Lexington for all taxes ($2,800,000) is less than 25% of the educational operating
9
slide 10.
42
costs (excluding capital), these apartment buildings demand substantially more from the
Lexington fiscal base than is covered by their tax contributions.
Finally, while apartment buildings may support a broader demographic than single family
homes, they also serve another purpose for Lexington, which is to contribute materially to the
town's goal of 10% affordable housing. Of Lexington's 1328 Subsidized Housing Inventory (SHI)
Units,10 802 are provided by five apartment buildings. If Lexington's SHI were to fall below 10%
affordable housing, then Chapter 40B rules would allow developers to bypass certain local
zoning regulations. Therefore, these apartments serve a useful function for a town seeking to
regulate residential development.
Undeveloped Land
Land in residential districts is categorized and assessed depending on the ease with which it
can be transformed into occupied residential property.
Developable land has a higher assessment (median $519,000 in FY2019) than undevelopable
land. A tax policy which penalizes developable land for remaining idle (e.g. missing out on an
owner-occupied residential exemption) could spur development of these assets into
owner-occupied housing.
The terms "potentially developable land" and "undevelopable land" refer to properties which
might not be easily developed. These properties also cannot be owner-occupied, so owners of
these properties cannot benefit from exemptions for owner-occupied properties.
It seems reasonable to expect that many of the privately owned, undevelopable lands are small
tracts abutting a parcel owner's primary residence.
For-Profit Child Care Facilities
Although commercial enterprises, for-profit child care facilities are classified and taxed as
residential properties. Lexington currently has five such properties:
moos , "I
Bright Horizons 903 Waltham Street $11718,000
First Circle Learning Center 80 Maple Street $8791000
Goddard School 332 Concord Avenue $110767000
(under construction at time of assessment)
LEAP School 210 Marrett Road $21445,000
Lexington Knowledge Beginnings 429 Marrett Road $909,000
$79027,000
10httr)s://www.rhsohogainggEgLagd.g�/ i ®i . Note: Under the 40B law, the Town's SHI
receives credit for all affordable and market rate units in a development when at least 20% to 25% of the
units are deeded to be affordable. The Town's current nominal affordable housing percentage is 11.12%,
although the actual percentage of affordable units is smaller.
43
For-profit child care facilities are not owner-occupied, and therefore would not benefit from a
residential exemption. Again, as these are commercial enterprises in practice, one could
reasonably debate whether the desired policy for taxes should be the current residential tax rate
or the much higher commercial tax rate.
Group Living Facilities
Group living facilities are classified as residential rather than commercial. Lexington currently
has four group living facilities:
Artis Senior Living 430 Concord Road $351815000
Supportive Living 7 Oakland Street $1,3785000
50 Percy Road $132813000
52 Percy Road $1,180,000
$7,020,000
Lexington's fall 2018 Town Meeting approved development of two additional facilities: an
assisted living facility (Waterstone) and a memory care facility (Bridges). These are for-profit
enterprises which, once built, are expected to be classified as a residential group facility. The
Fall 2018 presentation to Town Meeting projected that these properties would contribute
$600,000 in property taxes per year to Lexington, suggesting a residential assessment of about
$42,000,000. The combined Waterstone and Bridges projects illustrate how quickly new
residential solutions might be adopted in Lexington, and hence the importance for policy makers
to consider the impact of exemption policies on future housing initiatives.
Again, as commercial businesses, for-profit group living facilities receive favorable tax treatment
in Lexington when compared with commercially zoned businesses. However, because
Lexington's residential and commercial tax rates may already differ significantly from peer
communities, economic competitiveness also deserves consideration, not just fairness relative
to other commercial businesses.
Brookhaven
Brookhaven is a lifecare community for seniors that provides services ranging from assisted
living through nursing home care. It is considered to be a not-for-profit community. Currently,
Symmes Lifecare Inc. (d/b/a Brookhaven) makes a negotiated Payment In Lieu Of Taxes
(PILOT) to Lexington rather than being taxed directly as a residential property. It is unresolved
whether Lexington could tax Brookhaven directly rather than accepting this payment in lieu of
taxes.
44
In 2017, Brookhaven entered into a memorandum of understanding with Lexington that will
increase its PILOT payments. This was part of a larger agreement with Brookhaven concerning
a planned Brookhaven expansion. This revised PILOT will increase Brookhaven's payment in
lieu of taxes to $573,001 in FY2022.
Because Brookhaven pays a PILOT, no change in residential exemption policy will directly
impact tax payments from Brookhaven. However, a residential exemption could increase the
gap between PILOT payments and what Brookhaven would pay if taxed directly. Adoption of the
State's Residential Exemption could motivate renegotiation of the Brookhaven agreement, or
contribute to a revised PILOT level when future negotiation occurs."
Affordable and Subsidized Housing
Lexington has more than 800 subsidized and affordable apartment units and houses that are
owned, managed, funded or overseen by a complex variety of government entities and private
building owners. Units owned by the government are not subject to property tax, and would not
be affected by the adoption of the SRE.
Much of Lexington's affordable housing consists of designated apartments located within
privately owned apartment buildings. While the apartment buildings themselves would see an
increase in property tax if the Town were to adopt the SRE, rental rates for the affordable units
are dictated by the State and would remain unaffected.
Lexington also has almost 90 units of deed-restricted affordable ownership apartments. These
units are privately owned by income-qualified owners and in perpetuity may be sold only to
other income-qualified owners at a controlled price. These units are required to be the primary
residence of the owner and may not be rented out. With low assessments, these residences
would receive a decrease in their property tax if the Town were to adopt the SRE.
Conclusion
This chapter describes the many types of properties which contribute to Lexington's residential
property tax base. While some properties--such as single-family homes, two-family homes and
condominiums--may be owner-occupied, others such as large apartment buildings and group
housing facilities are generally not owner-occupied.
It is noteworthy that some properties are taxed at residential rates despite being commercial in
nature. One could argue that these properties are under-taxed relative to their purely
commercial peers, and in fact some might not provide sufficient taxes to cover their economic
impact on the town. But Lexington does not exist in a vacuum, so these arguments should be
tempered by Lexington's competitive position in the residential housing market.
As Lexington considers changing how taxes are derived from the residential tax base, policy
makers should recognize that new projects as well as zoning changes could impact how
residential properties are utilized. Policy makers should think not only about short term impacts,
11 The Committee does not have any evidence that Lexington would renegotiate with Brookhaven, so this
section serves to make policy makers aware of this possibility or implied tax levels.
45
but also what types of long term impacts are sought as well as whether Lexington will have
flexibility in responding to changes in housing needs in our society, and whether tax changes
would impact competitiveness for all classes of residential owners with surrounding
communities.
46
The Massac usetts Resi entia Exemption
5
The Residential Exemption Policy Study Committee's original charge was to study the
Massachusetts Residential Exemption, a local option available to all municipalities. After
weighing the pros and cons of this exemption, the Committee requested an expansion of scope
to include means-tested residential exemptions as found in other communities, most of which
were enacted by special legislation gained by home rule petitions. This chapter will cover
Massachusetts's statutory residential exemption, while the next chapter examines means-tested
residential exemptions. To avoid confusion, throughout this document, the term SRE is used to
refer to Massachusetts' "State Residential Exemption", while the term MTRE will refer to a
variety of Means-Tested Residential Exemptions which may exist or could be created.
The State's Residential Exemption (SRE) is a local tax option available to the Select Board for
adoption:
With respect r 1 of real property classified1 , residential, in each city
r town...at the option of the boardselectmen... there shall be an exemption equal to not
more than 35 percentaverage lall Class One, residential, parcels
within such city orprovided, r, that such an exemption shall be appliedonly to
the principal r i r as used by the taxpayer forincome tax purposes.12
Only 16 of 351 municipalities in Massachusetts presently utilize the SRE, and these
communities are typically cities or vacation communities, with none closely resembling
Lexington in housing stock or demographics.
State Residential Exemption Process
Setting an Exemption Percentage and, thereby, an Exemption Amount
Each year, as part of the State regulated tax-rate setting process, the Select Board is required
to set a percentage for a Residential Exemption. Lexington's Select Board has historically
chosen a 0% factor, in effect, declining to adopt the SRE. Supporting documentation for options
can be found in the tax classification packetl3, which includes projections for adoption at
percentages such as 10%, 20%, and 35% (typical percentages used by other municipalities).
35% is the maximum allowable percentage.
If the Lexington Select Board chooses a percentage above 0%, the following processes would
be set in motion:
• Lexington residents would be notified of a new residential exemption.
12 hfts-Hmaler . l l r / / i r /Section5C. From 1979-2016 a
maximum 20% exemption was permitted without special legislation, but starting in 2016 this maximum
was increased to 35%.
13 t m// / it / i /i / / i ti t idf
47
• The Board of Assessors and the Lexington Assessor would establish a certification
process and then certify the properties determined to be eligible for a residential
exemption.
• The residential tax rate would be increased to offset the projected revenue shortfall due
to the exemption.
Eligibility and Verification
Per the state law, parcels that are "the principal residence of a taxpayer as used by the taxpayer
for income tax purposes"would receive a residential exemption. In other municipalities,
identification of these parcels occurs via voluntary affidavit by the taxpayer, with required
evidence such as federal tax return, state tax return, drivers license, vehicle registration, utility
bills or bank statements. Practices differ on the handling of real estate transfers and whether
annual recertification is required.
Once affidavits are submitted for an estimated 10,800+ parcels, Lexington would apply its own
process for residency verification. Significant verification may be required given financial
incentives to cheat. Verification of the more than 1,400 properties in Lexington owned by trusts,
requires review of each trust's structure, trustee status and beneficial interest assignments
would be required,14 and will entail both time and expertise.
Exemption Amount and Tax Rate Calculation
The Lexington Assessor provides the Select Board with the assessed value of the average
residential parcel. As shown earlier, this average parcel value includes more than single family
homes, incorporating parcels such as empty lots, non-developable land and apartment
buildings. Therefore, the average parcel value is simply the assessed value of all residential
parcels in Lexington divided by the number of parcels. According to the FY2019 tax
classification packet, the average residential parcel assessment in Lexington is $973,804.
The exemption percentage set by the Select Board is multiplied by the average residential
parcel to determine the exemption amount. The result would be a single fixed exemption
amount which would be applied to every residential parcel in Lexington for which eligibility is
confirmed. The exemption amount is subtracted from the parcel's assessed value before
application of the tax rate.
11 Massachusetts Department of Revenue publications indicate that homes held in trust and occupied as
the primary residence by a named trustee with a sufficient beneficial interest or life estate in the property
would be considered owner-occupied. The Committee has no expertise in trust law and did not seek legal
guidance on this matter, nor does any statement in this report constitute a legal opinion about eligibility.
48
The following table identifies exemption amounts which would occur for various exemption
percentages if hypothetically adopted in FY2019:
0000i�u III � m000i N �I„' �
IIIIIIII I " � bil �
2.5% $243 345
5.0% $483690
7.5% $735035
10.0% $975 380
12.5% $1211726
15.0% $1461 071
17.5% $170,416
20.0% $194,761
22.5% $2197106
25.0% $2431451
27.5% $2675796
30.0% $2921141
32.5% $3161486
35.0% $3405831
The Committee is aware that for many taxpayers, understanding of the SRE stops at this point.
Residents are often enthusiastic supporters of the SRE based on a misconceived belief that this
exemption would lower taxes for all Lexington residents.
However, perhaps the most important point is that the total Lexington tax levy remains
unchanged. Revenue neutrality is accomplished by increasing the tax rate on all residential
class properties to offset the loss in revenue from the properties that received the residential
exemptions.
49
Based on 2019 figures and the Assessor's estimate of 9,265 exempt parcels15, the following
table illustrates how the lower aggregate residential assessed value combined with fixed
residential tax revenue results in an increased residential tax rate:
" Illllllb IIIIIIIU "
IIIIIIU' � III ullllw III III III'( ullllu III gNIdM W '"IUN U WIW I V CIO' W WWI^ I
exn Iln mlu IWnle mlu n,&
IIIIIIIIII IW IIIIIIIIII IIIIIIII
Wal Wal +Iw.
(IIIIIIIIII V' '� "' (IIIIIIIIII I", � wle anv p ' Iwro
��III II IIIII II � pool�I�,,II I e'T"I I II III III IIIII
1 W I4 IIIIIIIIII IIIIIIIN
III
I AI I
(IIIIIIIIII
...........
0% $10,57016381820 $14953083233 14.12 0%
5% $10,119,5241117 $149,308,233 14.75 4.5%
10% $97668409,414 $149,3083233 15.44 9.3%
15% $9,21712945711 $149,3083233 16.20 14.7%
20% $81766,1805008 $149,3083233 17.03 20.6%
25% $8,315,0653305 $149,3083233 17.96 27.2%
30% $7,863,9503602 $14933083233 18.99 34.5%
35% $7541298355899 $1495308,233 20.14 42.6%
As this table shows, higher residential exemption percentages result in a reduction of residential
assessed value that is subject to taxation, and a corresponding increase in tax rates on
residential properties in order to make the exemption revenue-neutral to the municipality.
While the tables above illustrate the range of options available to the men, a more tangible
perspective for residents may be to show the impact on homes. Such an impact illustration
requires the selection of a particular SIRE percentage, and this report does so using 20% merely
to illustrate key relationships between property values and taxes.
The following table illustrates a 20% SIRE assuming FY2019 tax rates, as above. The FY2019
preliminary tax rate is $14.12. At a 20% SRE, the tax rate is estimated to increase to $17.03.
The following table shows the tax paid by the parcel owner at status quo (no SIRE) (column B),
and with the SIRE when owner-occupied (column C), with the SIRE when not owner-occupied
(column D). Columns E and F show the changes in taxation.
15 The 9,265 figure from the tax classification packet is a rough estimate. Policy makers should treat this
figure as an illustration, and evaluate from a longer perspective than how many parcels are owned in
FY2019.
50
FY2019 Tax Illustration with a 20% SIRE
Illlllb IIIIIW"
1111111161111.........1111��1111
yinw gull ^
a Illllllu w I ww l°' " Illllllu
II IIII umw loan" um* ,wb pp
u W'Y dlln dIW MW W
11111
inu, Ill nflWln IIIIIUb IIIIIIIIII mM%o IIIIIW ullllllll
ww .� N lu IIIIIIIIIII I' ���w�� U IIIIIIIIIII ' I
Assessed FY2019 Owner Not Owner Not
Residential Property Tax Bill Owner- Owner-
Property Value No SRE Occupied Occupied Occupied Occupied
p Y ) p p
$4007000 $57648 $37496 $67813 -$2,152 $1,165
$5007 000 $77 060 $53199 $83 516 -$11 861 $17456
$6007 000 $87472 $69 902 $10,219 -$11 570 $1,747
$7007000 $97884 $81605 $11,923 -$11279 $27039
$8007 000 $117 296 $10,309 $13,626 -$987 $27 330
$9007 000 $127 708 $127 012 $157 329 -$696 $27 621
$1,0005 000 $14 7120 $13,715 $17,032 -$405 $2,912
$1,1003 000 $15,532 $15,418 $18,736 -$114 $31 204
$132007000 $167944 $177122 $207439 $178 $37495
$1,3001000 $18,356 $18,825 $22,142 $469 $37 786
$17400,000 $197 768 $205 528 $235 845 $760 $47 077
$1,500,000 $217180 $22,231 $25548 $17 051 $4,368
$1,600,000 $227 592 $23,934 $27,252 $17 342 $47 660
$13 700,000 $247 004 $25,638 $28,955 $17 634 $47 951
$1,800,000 $25,416 $27,341 $30,658 $17 925 $5,242
$1,900,000 $267 828 $291 044 $321 361 $27 216 $57 533
$23 000,000 $287 240 $307 747 $347 065 $27 507 $57 825
Key observations:
• SIRE increases property taxes on all non-owner-occupied properties (it has no relation to
the type of non-owner-occupied property). Non-owner-occupied properties always
experience a significant negative impact from the SRE.
• For owner-occupied properties assessed below $1,150,000, a decrease in taxes occurs;
the lower the assessed value, the larger the decrease .
• For owner-occupied properties assessed near the breakeven point, in the
$111001000-$19200 7 000 range, an immaterial change to taxes occurs
• For property owners with values well above the breakeven point, taxes increase a
material amount, increasing proportionately to property value.
Finally, it is important to observe that the majority of residential parcels will have a reduced tax
burden, offset by increases on a minority of parcels.
51
Using this 20% illustration, the following table shows the impact on the median property of
sub-classes of residential property likely to be owner-occupied:
u
i
,e
I
n ,
u U IiAn^
III
"' low mimu 00000� luu "' III III
moiu nn
a ul VIA mood a u Ulpu moiw , mmil
iu
Single Family $9397000 $131259 $121667 $157982
Condominium $5307000 $71484 $5,706 $97021
Two Family $7837000 $11,056 $103012 $137327
Three Family $8107000 $11,437 $10,471 $137786
Multiple Houses $1,256,000 $17,735 $18,062 $217377
Four Unit Apts $8997 000 $127 694 $117 986 $157 301
This table illustrates that for most of these classes of properties, the owner of the median
assessed property would receive a tax reduction, provided the home is verified as
owner-occupied. However, one subclass "multiple houses 7716, have high enough median value
that the median property would experience a tax increase even if owner-occupied. Conversely,
the median condominium would experience the largest decrease in property taxes.
The chart below further illustrates how tax level relates to property value. The chart is intended
to illustrate two points:
• The term "breakeven" in the residential exemption discussions refers to the point at
which an owner-occupied parcel experiences no change in taxes due to the SRE.
Mathematically, the breakeven point is the total of residential value in Lexington divided
by the number of owner-occupied properties claiming a residential exemption.The red
and blue lines in the following chart intersect at the breakeven point.
• Owners of non-owner-occupied parcels always pays more taxes with an SRE, and are
therefore worse off in all cases under an SRE. These disadvantaged properties are not
only apartment buildings, but also single family homes or apartments owned by investors
or owners living elsewhere.
16 Properties are classified as multiple houses if multiple dwellings exist on a common residential parcel.
52
� III imimimi 0 ill �.imimimi�0 i, lipu� p , mto u10 IIII
1
ta h is Qt jo (no Q imm O iir OCCUIpiiied wll i1 ii� S"II R,II
til r�l n .IIII° C°)c lu iii ed w iii ill IIII IIII
II i 0 0
1000/
�2 5,0
r
ul000i;
/ II
101111
15,0
1101
III
110
,o ,III
11
�I5 I00,00 0 $1 000000100 $ 105 100000
Assessed Value
53
Misunderstandings about the SIRE
The revenue-neutrality of the tax burden shift can be confusing to residents. Clarification about
some common misunderstandings regarding the SIRE may assist resident understanding:
Misunderstanding #1. A residential exemption reduces Lexington taxes
No. The total amount of revenue that is lost due to the exemptions is estimated and then the tax
rate is increased to exactly offset that loss, ensuring that the revenue raised by property taxation
remains unchanged. The sum of all tax relief experienced by residential parcel holders will be
offset by an equal new tax burden experienced by other residential parcel holders.
Misunderstanding #2. A residential exemption simply shifts tax burden onto apartments
It is not that simple. Two types of residential parcel holders would see an increase.
• Those owning residential properties above the breakeven point.
• Any parcel which is not certified as owner-occupied, whether it is the smallest piece of
undeveloped land or the largest apartment building. The variety of parcels which would
experience a tax increase is detailed in an earlier chapter .
Misunderstanding #3. A residential exemption is progressive by shifting the tax burden
from low price homes onto high price homes
A definition of a progressive tax from Investopedia reads:
A progressive tax is a tax that imposes a lower tax rate on low-income earners compared to those
with a higher income, making it based on the jtgaa
3y&s ability to pay.17
The SIRE would reward those who occupy their own homes. Owner-occupants are typically
wealthier members of the community than those who rent. Landlords would see a significant
increase in taxes and attempt to pass those through to tenants. Moreover, Lexington
condominiums, which are generally the least expensive residential properties in Lexington, may
be owned by those with significant income or other assets, who would nonetheless see a
substantial lowering of tax burden. Therefore, while the SIRE may appear to be progressive
when considering only owner-occupied single family homes, when considering all types of
residential properties and their occupants, it is not progressive.
Direct Consequences of SIRE on Homes and Property Classes
Owner-occupied Single Family Homes and Condominiums
The chart below is introduced as a format for evaluation of Lexington taxes as well as for
comparison against benchmark communities. Based on FY2018 tax values, which are the latest
valuations available for all communities, this study provides a guide to understanding the impact
of a SIRE in Lexington and in comparison with other communities. This chart format is
17 httr)s-//www. / r / i
54
introduced here to prepare the reader for comparison charts later in this section.
Lexington Residential Exemption Scenarios
FY2018 Residential Property Tax Demographics and Resitlential Taxes
v"'000"GOO ��'Mg 33,7 27
s oc�aac. w.ss:� � rev n9�on w`">""o""t �illillillillillillilliillillilI rev n9ton
iniois. I ) i i i I!i ii'i I I Dili:. i� Iltl
Owner-Occupietl with a 10%RE Not Owner-Occupietl with a 10%RE
v,o�. si�ois � xinpion l a13�s`3 � rinpton
Owner-Occupied with a 20°o RE Not Owner-Occupietl with a 20°u RE
LA $1,11000,000
51?630 51,3,e00
moo aa� s7.1e0 �1 sex ngton $ia 350 iex ngton
Owner-Occupietl with a 30%RE Not Owner-Occupietl with a 30%RE
00
s,oc. s1<.088 �illillillillillillilliillillil xington $
-
nezitlentialpropertyiaxes a sitlen[ial property saxes
55
This chart series is intended to provide the status quo for FY2018 (top line) and the impact of
possible residential exemption amounts on owner-occupied and non-owner-occupied properties
(chart rows 2-4).
The top left chart shows the FY2018 residential tax rate applied to properties ranging from
$600,000 to $2,000,000. Each bar shows the tax amount in relative proportion with a label for
the tax at each assessed value.
The top right chart shows demographic data and tax rate data useful for comparing
communities. Due to lack of space, the vertical legend occurs as text within the top right chart.
The community population is from recent census estimates. The average single family
assessment is from state data and the average single family tax bill. These figures are included
because different communities may have more or less expensive single family homes, so the
comparison of tax rate does not provide a complete picture for understanding relative
assessments. The tax rate line shows the FY2018 residential tax rate, and for those
communities with a FY2018 residential exemption, the last bar"exempt amount" will show that
amount. For Lexington, there is a 14.30 tax rate and $0 exemption amount for FY2018.
Rows two through four show the impact of various SRE scenarios, ranging from 10% to 30%.
The illustrated percentages are intended to represent options and are not Committee
suggestions. For these rows, the left column shows resulting tax for owner-occupied properties,
and the right column shows resulting tax for non-owner-occupied properties.
Example: If someone owns a $1,000,000 home, we can determine from the upper left
chart that their FY2018 tax would be $14,300 without a SRE. If a SRE were created at
the 20% level, their property tax would be $14,080 if owner-occupied (lower left) and
$17,250 if not owner-occupied (lower right).
Tax Burdens Relative to Peer Communities
Adoption of a residential exemption impacts Lexington's economic competitiveness relative to
peer communities. Benchmark charts are included for 17 communities selected either for
geographic proximity, similar socioeconomic status, or likely out migration within Massachusetts.
Three charts are included in this chapter as examples for discussion, and the remaining charts
are included in an appendix.
Peer Community: Newton
Newton is often cited as a socioeconomic peer with similar distance to Boston:
56
Lexington v. Newton
IFY2018 Residential Proplefty Tax IDemolgIraphl'ics and R,esidlential Taxes
52
00.11��immmmmmmmmmmmmmmmmmmiiillillillilljlllllllllIIIIIIIIIIIIIIIIIIIIIIl1111�528,�60,G(4$6,9,60) ''727,000,0 522,640 B8,9,914
Z3IIIII52 2,880(.4$55,68) IIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIII, 1 mmlmm,11"171M.AM,5slaoi,8,05
"76 51 1600 Goo 517,312 51,0933,67
> 51,400,000 iiiiiiiiiiiiiiiillillillillillillilliillillillillillillillillillilillillillillillillillillilliIillillilillillillilillIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIII1111111$2,D.02,9(+$,4.,872'�,
co 11��IMSERWEMMEEEEMM=Illlll1111111 5 1,7,116,0(+S 4,17 ) 511,830
V) 51,200,000-
512,98A
1"'00,000 J1111$14.300(+$3A80)
50 -
IMMENIMEMMEM0 IIIII
L A $10,820 10.82
$800,000 jIIjjl[jjkjjffMjjjjMM 511,440 2,784)
$8,656,111MININIMMM5,80 �illillillillillillilliilillillI LexFngton Exeiyipt arnount �illillillillillillilliilillillI Lelxrngton
(+$2,088) 1
$6,492 Newton $0 Newton
.............. ..........................................................
Scervil��iO,S ORE)
Owner-Occupiled with a 10%IIRE IINot Ow'Inn er-Occupled with a 10%,IRE
!�2;000,000 (+$8,203)
$21,640 $21,640
$28.15 2(+$,8ip6,7 6)
51,9,,476 51,9,,476
D 51,600,000 11IIINEINEWAININININININININIMMIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIII1111111523,X587?,+ ,m275 IIIII 111111111111111111111111111111111111111111111111111$2 5,024�4$TP 7.12
"76 $17,312 $17,312
> 51,400,000 .111immillillilillillillillillillillillilliilillillillillillillillilliilillillillillilliIillillillillillillilliillillillilljllIIIIIIIIIIIIIIIIIIIIII11111111111111111111$22,896(+$,6,p748)
515,148 S15,14B
coIIIII 11111111111111517331(+ 4,34 71 IIIII IIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIII518,76 B(+�$5,784)
V) $1,200,000
�12,984 �12,984
51,1000,000 1,4,203(+$3,38 3 1,5,640 1,+$4,8 2 0),
L A $1%820 $10,820
$800,000 s 1,1,0 7 5�+s 2,419) -MMMIIIIIIIIIIIIIIIII1111111MON111L$1,2,512(+53,856),
$8,656, $8,656,
111MOVEMV,947(4,$2,455), �illillillillillillilliilillill� LeX,1,1,lgton[ .111MIKIMMM59,384(+$2,892) IillillillillillillilliilillillI Lexkngton
$6,492 Newton $6,492 Newton
Owner-Occupiled with a 20%,IRE IINot OwInn er-Occupled with a 20%RE
$2,000,000IIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIII IIIIIIIIIIIIIIIIIIIlljllllllllllllllllllIIIIIIIIIIIIIIIIIIIIIIllilljlllllllIIIIIIIIIIIIIIIIIIIIIIllilljllllllllllllllllilljllllllllllllllllll1111111111llillillillillillillilliillillilillilljlllllllIIIIIIIIIIIIIIIIIIIIII1111111111llIIIIIIIIIIIIIIIIIIIIIIIlI (
$21,640 $21,640
(+$8,404) IIIII 11111111111111111111111111111111111111111111111111111111111111111111111111111111111$31.0510(+$11,5 74)
51 ,476 51,9,,476
51'600,000-11IIl IIIIIIIIIIIIIIIIIIIIII111111111111111111111 ,430(+ 7,118� IIIII IIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIII52 7,600 + 10,2 88)
$17,312 $17,312
> $1,400,000
T�
$1, ,000 11IIINIJIMMSEEEEEMMIJIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIII11111111 520,700(+$T,716
200
$12,984 $12,984
51,1000,000 (+$3X260), liimmiiiiiiiiiiiiiiiiillillilillillilllm=llIIIIIIIIIIIIIIIIIIII1111I$1,7,2 50(+$,6,,4 3,0)
L A $10,820 $M820
$800,000-11IRKNENEIMMSIA6310(-+$1,974) 1110111MOMMEMIIIIIIIIIII11111513.8010(+$5,144),
$8,656 S8,656
�IIIIIIIIIIIIIIIIIIIIII11111111I Lexvngton D0,150(4$3,85S), IIIIIIIIIIIIIIIIIIIIII11111111I Lexilligton
jjIIJMMMMM 5 7,180(4$688 51
$6,492 Newton $6,492 Newton
Owner-Occupied with a 30%IIRE III OwInn er-Occupied with a 30 IRE
$2,000,000 MMMIIIIIIIIIIIIIIIIIllillIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIII11111111IIIIIIIIIIIIIIIIIIIIIIIlli1111�IIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIllI0IIIIIIIIIIIIIIIIIIIII1111IIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIII11111111IIIIIIIIIIIIIIIIIIIIII111111111111$38,480(+$16ip8,40'�,
$21,64,01 $21,64,1
$34.632(+$15,15,6)
19,476 51,9,,476
D 51,600,000 .11IIIERNMIEEEEEM=IllllllllillillillillillillilljIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIlljl$30,,7'83(4$13,471�
"76 $17,312 $17,312
> $1,400,000 iiiiiiiiiiiiiiiillillillillillillilliillillilillillillillillillillillillllIillillillillillillilliillillilillillillillllIIIIIIIIIIIIIIII111111111111$21,632(+$,6,,4B4r -ilimmillillillillillillillillillillillilliillillillillillilllIillillillillillillillillillillillilliillillilillillillilillIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIII$2,6,935(+$,I.1,7'87)
515,149 515,148
00 liIIimaillormommm=illillillillillillilliIIIIIIIIIIIIIIIIIIIIII1111111111I523,087(.4$10,103)
V) 51,200,0
$12,984 $12,984.
,51"' 0 liimmiiiiiiiiiiiiiiiiillillillillillillillll�IIIIIIIIIIIIIIIIIIIII111111111111I$13�9 3�6 1,+�$3,116) mmmiiiiiiiiiiiiiiiiiiillillilm=llllllllllllIIIIIIIIIIIIIIIIIIIIIIIllI$1Sf,240 1,+$8A 2 0),
00000 -
L A SMUG 51w820
jjIIJMMMMMMG.088(+$1,411��IIIIIIIIEMMMMIJIIIIIIIIIIIIIIIIIIIIIIIIII 5 1,5,391(+S 6,7 35),
$8,656 $8,656
IJIMMM$6,240(-$252) IiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiI LexEngton 111KNIMEM1111111111�1,2,54 3,1,+�$5jpO 5 1) �iiiiiiiiiiiiiiiiiiiiiiiiiiiiii� Lexrngton
$6,492 Newton $6,492 Newton
ReslidenUal Property Taxes Residenti'al Property Taxes
57
The principal difference between this chart series and the Lexington-only chart series is that two
values are shown for each bar, one for Lexington (blue) and one for the comparison community
(green). The difference in tax impact is shown in parentheses to assist the reader in comparing
impact. Again, these charts are all for FY2018 because tax information is readily available in all
communities for the completed fiscal year.
The upper right chart shows that Newton has an average single home assessment that is
$100,000 greater than Lexington but a lower tax rate (10.82 v. 14.30), and therefore a lower
average single family home tax ($11,830 v. $14,169). The result of this tax rate differential can
be seen in the upper left chart which shows that a $1,000,000 property in Newton is taxed at
$10,820, which is $3,480 less than a $1,000,000 property in Lexington.
Readers with an investment mindset might appreciate the $3,480 tax difference, which is a drag
on the value of a $1,000,000 investment in a community. Other readers might focus on the fact
that a $1,000,000 Lexington home might be nicer than a $1,000,000 Newton home, and
therefore the comparison is not apples-to-apples. Because communities and housing stock are
not identical, we encourage considering the differences in average single family home values
and average single family tax bills when evaluating tax differentials across communities.
Next, one would consider how a residential exemption in Lexington would impact
competitiveness against Newton, which currently does not have a residential exemption.
Examining the hypothetical 20% SRE row, one can see that a $1,000,000 home would hardly be
impacted in Lexington if owner-occupied, but if not owner-occupied the tax gap between
Lexington and Newton would grow to $6,430. Thus, a residential exemption would have an
obvious impact on retarding investment ownership and rental of Lexington homes relative to
Newton homes.
Looking at the $600,000 level (condominium end of market), a 20% residential exemption would
substantially reduce the tax disadvantage relative to Newton ($688 v. $2,088 at status quo),
provided the home is owner-occupied. In examining newer homes at the $2,000,000 level, a
20% residential exemption would increase the tax disadvantage relative to Newton from $6,960
today to $9,690 if owner-occupied and to $12,860 if not owner-occupied.
Adjacent Community: Burlington
Burlington is an example of a geographically proximate community where some Lexington
residents have moved for the purpose of downsizing and/or reducing their property tax burden.
Retention of residents requires Lexington policy makers to ensure that taxes and services are
competitive with communities such as Burlington, Waltham, Arlington, Woburn and Bedford.
58
Lexington v. Burlingtan
IFY2018 Residential Proplefty Tax IDemolgIraphl'ics anid R,esidlentiall Taxes
52,000,000 528,600 7,36,D) 33,7 27
$21,240 27,176,
"ME 5slao,8 0 5
Z3 51 22.880 5,
"76 00,000 516,992 5 54775,014
> 51,400,000 liiimmiiiiiiiiiiiiiiiillillillillillillilliillillillillillillillillillilillillilillllllllllllllll§=IIIIIIIIIIIIIIIIIIIIIIII$20�020(+$5,1,5 3)
"C� $14,867 51A 16,91
co 00 5 1,7,116,11)(+S 4,417) 55,071
V) 51,200,1D
512,743,
11��INIIELVMFMMIMIMIMMIIII111111$14�300(+,$3 68,C)
51,"DO0,000 .14.3,D
L A 5MI1520 10.62'
$8,0,0,00,a jjIIJMMWMMMMM 5 11,44,0 2,�944
$8,496
111MINI Lelx[ngton, Exeropt arnount �illillillillillillilliilillillI LexEngton,
$6,0D,00""O NIMMM5,80(+$2�2,09,) .50
$6,371 Burlington, $0 Burhmigton,...................................................................................... ...........,'I'll,......................
ORE)
Owner-Occupiled with a 10% RE INot Ownier-Occupled with a 10%IRE
!�2,000,000 (+$8,6031 31,280(+s.10,,D,,40)
$21,240 $21,240
$2,%1,5 2(+$,9,,C 3,6
D 51,600,000 52 3„58 7 1,+is 65,915) $2 5,024�,4�$8,,0 3 2'1,
"76 $116,9912 $1,61,9912
> 51,400,000 .11immillillillillillillillillillillillilliillillillillillillilliillillilliillillilliIillillillillillillilliillillillillilllllllllIIIIIIIIIIIIIIIIIIIIIIlIll1111111111111I$21,896(+$,7,,029)
S14M7 S14�867
coIIIII 11111111111111111115173 31(+$4,58,81 518,76 B(+ ,0 2 S
V) $1,200,1DOO
$12,743, $12,743,
51",DOO,()00.11lllllllllmllllIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIJIMM1111�1,4.2'03(+$3,,583,) 1,5,640 1,+�$5,0 2 0)
L A $1,G�620 $MI1520
EMMIIIIIIIIIIIIIIIIIIIIIIIIIJIM$11,11D 75�+$2',5 79) mmmiiiiiiiiiiiiiiiiiiillillIillillililllllllllllllIIIIIIIIIIIIIIIIIIIII1111$12,512(+s4,01 6),
$8,496 18,491
111MOVEMV,947(4,$1,576) �illillillillillillilliilillill� LexEngton, .111MISVIVIEM59,384(+$3,013) �illillillillillillilliilillill� LexEngton,
$6,371 Burlington, $6,371 B urllllln to ni,
Owner-Occupiled with a 20%,IRE IINot OwInn er-Occupled with a 20%RE
$2,000,000 NMMIIIIIIIIIIIIIIIIIllilljlllllllIIIIIIIIIIIIIIIIIIIIIIllilljllllllllllllllllilljllllllllllllllllll111111111111IlljllllllllllllllllllIIIIIIIIIIIIIIIIIIIIIIillillillillillillilliillillillillillillillillillillilliillillillillillillilliIIIIIIIIIIIIIIIIIIIIII1111111I�34,50,3(+,$13,260�
$21,240 $21,240
(-+$,B,7,6,41, .11IIlmoLlinsommommommom=llillillillillillillilliillillillilliillillillillillililllllllllllllllllll1111111111111111$31.0510(+$11,'9134)
519,116
51''600,000IIIII IIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIII111111 .430(+ 7,438 IIIII IIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIII52 7,60,10�+$10,608)
>T $1,400,000 .11immillillillillillillillillillillillilliillillilliillillillillillillimmiillilllllllllllllllllllllIIIIIIIIIIIIIIIIIIIIII111111111$24.1�5,0?,+ ,2,B3)
514�867 514,867
co
,000 11��IMININEffMIEEEMMIJIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIII1111111111I 520,700 7,957
V) $1,200
$12,743, $12,743,
51,1000,000 (+$3A60) $17,2 50(+$,6,,,6,30
L A $M62,01 $M62,01
$800,000 11IMMINNOMEMSIA6310(+$2,1,341 111MINIESSIMMIIIIIIIIIIIIIII 5 1 3.8010(+$5,304)
$8,496 18,416
jj��JMMMMM 5 7,180(+$8,09) �IIIIIIIIIIIIIIIIIIIIII11111111� Lexviligton, .11INJIMIkI11=1111510350(4$3,979) �IIIIIIIIIIIIIIIIIIIIII11111111I LexEngton,
a71 Burlington $6,371 Burlllllntnnil
Owner-Occupied with a 30%IIRE III OwInn er-Occupied with a 3 %IRE
$2,000,000IIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIII .11IMM111111111111111llIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIII11111111111IIIIIIIIIIIIIIIIIIIIIIlIIIINNEIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIII11111111111IIIIIIIIIIIIIIIIIIIIIIlIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIII1111111$38,480(+$17',2,40)
S21,240 S21,240
D 51,600,000-11IIIRNBIMIEEEEEEEEEMIIIIIillillilillililljlllll11111111111111111111111525,48O(.+$9,4B,B,) (4,$13,7911)
> $1400000-iiimmiiiiiiiiiiiiiiiillillillillillillilliillillilillillillillillillililllm=lilllllllllllllllllllll111111111111�$21,632(+�$,6,,765) -ilimmillillillillillllillillillillillillilliillillillillillm=lllllillillilill1111111111111111111111lIIIIIIIIIIIIIIIIIIIIII111111111111�$2,6,935(+$,I�2,068)
, ,
T� 514„867 514�867
,000 11IIIMEVIllffMolljolEEMIJ11111111111111 1 7.784?+ 5,04 1) liIIimillowmammmmmiiiiiiiiillillilillililljlllllIIIIIIIIIIIIIIIIIIIII1111111I523,087(.+$10,34-4)
$12,743, $12,743,
11IMM1111111111111111IIIIIIIIIIIIIIIIIINM$13.9 3�6 1,+�$a,,3 11 16)
51"'000,000 liimmiiiiiiiiiiiiiiiiilililllm=llllllllllllIIIIIIIIIIIIIIIIIIIIII111111$Sf,240 1,+$8,6 2 0)
L A $10,620 SM620
$800,000 j��101LIJIMEMS1,10.088(+$1,159,2) 5 1,5,391(+S 6,8915),
$8,496 $8,496
IMMM$6,240(-$.131) �illillillillillillilliilillill� LexEngton, 11��IMNLIMMMIIIIIIIIII��1,1,543,1,+�$5,172) �illillillillillillilliilillill� LexEngton,
IJ
$6,371 Bu rl i n ton, $6,371 B urllllln to ni,
ReslidenUal Property Taxes Residenbal Property Taxes
59
The upper right chart, above, shows that Burlington not only has a lower tax rate than Lexington
($10.62 v. $14.30), but a substantially lower average single family value (at$477,504, less than
half the Lexington average). The result of these two factors is that the average single family tax
bill in Burlington is $5,071 compared with $14,169 in Lexington.
Starting with such disparate property values and tax bills, it becomes more difficult to evaluate
the impact of a residential exemption. A wide gap exists today. A residential tax exemption could
lower the tax gap for a $600,000 property, although one would continue to expect to pay less tax
in Burlington because of lower property values. Conversely, the owner of a $2,000,000 home
would be further penalized by an SIRE relative to Burlington, and could find greater reward in
shifting ownership to Burlington with lower home valuations and taxes.
60
Migration Target: Boston
Anecdotally, some Lexington residents choose to downsize to condominiums or townhouses in
Boston. What is the impact of a residential exemption for Lexington upon competitiveness with
the Boston market?
Lexington v. Boston
IIFY2018 Residential Propleity Tax IDemoigraphlips anid R,esidlentiall Taxes
$2,10100,000 33,72-7
$18�287 685,094
ss'19,0,805
$1,1600,10,00 $0
$14M5
> $1,400,000 $20,020(+$,Sr 02.1
511,999
V) $1,200,0100 s 17.116,0(+s T2 5 7) $3,324
$SJ,903
11I�IMRINEMMMMIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIII11111111111$1,4,300�(+$6,493A =jj��Ja 14.3 0
$7,907 10.48
(+$5,729)
$5,711 11111111111111111111111111111 Lexilington, "'e"n Pt alinjount IIIIIIIIIIIIIIIIIIIIIIIIIIIII L-exilingtorsi
11I�IMRIMMIIIIIIIIIIIIIIII111111111I 8,5,80(+$4,9165) BostO nil PO $254,969 Bosto ni
$3,615
.........................................................
Scerila Ili os III ° III Ir�� IIr a I' i n III° �w ly III II II:III II 1= Ilr°„ III a Ilr�I fj[ IE
J
Owner-Occupied with a 10%(IRE III Owner-Occupled with a 10 IRE
$2,0100,000-11I iiiiillillillillillillilliillillillilliillillillillilliilllllllllllllllllllllIIIIIIIIIIIIIIIIIIIIIIllI$29,,843,(.+$.I1,556,) .11I iiiillillillillilllllllllIIIIIIIIIIIIIIIIIIIII11111111IIIIIIIIIIIIIIIIIIIIII11111I$31,2°80(.+$.10,320�
$18„287
$1,400,000-11110mlillIlillIlilllillillillillillillillillillilillillillillillillillillillillillillillillillilli0=11111111111111111111illillillilliillillilillilljllllllIIIIIIIIIIIIIIIIIIIIII1111111I$�2,6,'7151+.5,10w524)
$1116,191
$1,600,0100-11I�lloollosEENEENEEM11111illillilillillillillll1111111111IIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIII$23,587�+$9,492)
70- $14,095,
> ......IIJIIMIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIllI 2 A5S?�+ 8,4,611)�$ 22,896(+S T2 24)
_0 $1,400,000 L1,9919 $0 $14,672
W s I T3 32�+$'7,428a I's.76 8 + 5,,1 g2)
V) $1,200,0100
$S1,903 $12,576
51,0100,000
0 $7,907 $10AG
$80,10,000 111�IMRINEMMIIIIIIIIIIIIIIIIIIIIIIIIIII$11,0 7 5 f+S 53 64) 11IRRININEEM111111111$12,512 +54,12 8)
551711 11111111111111111111111111111 Lexilingtoni $8,384 11111111111111111111111111111 L-exillingtoni
111�INRIBMIIIIIIIIIIIIIIII1$7,,947 1132) Bosto nil IIjIjNjNN=I$9,a84(+$3;G9,6) Bosto ni
$3,615 $6,288
Owner-Occupied with a 20%,RE III Owner-Occupled with a 20%RE
$2,10100,000 .11��IMMMI§MMMMMMMMMMM 20MIIII111111IIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIlIIIIIIIIIIIIIIIIIIIIII11111111111111111111�$346 ,500(+-$13,54,01
$1,%287 $ ,9,01
$1,B00,000 (+$12,186)
$IU64
51',600"0,00
$1A095
> $1,400,000 $24,1,-5'G + 9A 7 8)
$11,999 $14�672
0 10 liI�iollisommommmillillillillillilillililljlllllIIIIIIIIIIIIIIIIIIIII$17,15 30 + 7,16,2 7 11I�INIRIBMIMMMMMMMIJIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIII$219.700(+$8,12 4),
0 $1,20,00-
59,9103 $12,1576
$1,10100,000 $17,2 50(+$6,7 70)
0 $7,907 $10A80
$80,10,000-11��IMRIMSMMIIIIIIIIIIIIII111$1,0.6310(+$4,919) .11I�I INRINMIMMMMIIIIIIIIII1111111$1,3,8010(+$5,416),
55,711 11111111111111111111111111111 Lexilington, $8,3 84 11111111111111111111111111111 Lexilingtonl
$6011)1100,0.11I�JNUNNWS7,180(+$3,565) .jj��JNJINISMJJJJI S 1,10�350(+$4,06 21
S3,615 Boston,, $6,288 Bosto ni
Owner-Occupied with a 30%(IRE III Owner-Occupled with a 30%,IRE
$2,0100,000 $38A80(+$17,5 2W
S18,2'8 7 VU611)
.11I�imilsommmmmmmmmmm1111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111534w632(+$115,768)
$116,191 $18�864
D -111111111��IIIIIIIIIIIIIIIIIIIIIIillillillillillillilliilillillillillm=llllllillillillillillillilliilillilljlllllllllllllIIIIIIIIIIIIIIIII1111111111111$25 480(-+$.11,385) .1immillillillillilliillillillillillillilliillillillillillilliillill1illillillillillillillillillilliillillillillillillilliillillillillillillillillillillilliilililllllllllllllllll11111111111111111111$30,783(+'$14,,025�
76 $14�095 $16,768
> $1,400,000-11I�iollisomommmmmmillilliillillillillilllllllll1111111111111IIIIIIIIIIIIIIII1111111I$21,632(+$9,633� .11I�INBIIVLIEEEEEEMIIIIIIIillillilillillillillllIIIIIIIIIIIIIIIII111111111111IIIIIIIIIIIIIIIII$26,935 f+512,263)
"a $12,9919 5K672
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Residential Property Taxes Residential Property Taxes
61
Unfortunately, the state does not provide data on the average single family assessment and tax
bill for municipalities such as Boston which have adopted the Massachusetts Residential
Exemption (SRE)." The upper right chart shows that Boston's tax rate is $10.48 (relative to
$14.30 in Lexington), and that rate applies after an exemption of$254,969. Thus, the effective
tax rate in Boston is far lower than Lexington, because as demonstrated earlier, the $10.48 tax
rate is the scaled up tax rate that makes that exempted amounts revenue neutral. If Lexington
were to provide an exemption of$254,969, then its tax rate would be about $18.00, thus it
appears that Lexington's tax rate today is effectively about 70% higher than the Boston
residential tax rate.
The status quo chart (upper left) shows that for a $1,000,000 property in Lexington the taxes are
$6,493 per year greater than Boston. For a $600,000 property the gap is $4,965, which is 137%
greater than the Boston tax bill because the latter has a residential exemption, and therefore tax
ratios do not scale linearly. For a $2,000,000 property, a Lexington taxpayer pays $10,313 more,
which is only 56% more than a Boston taxpayer owning such a property.
With a 20% residential exemption, the $1,000,000 owner-occupied property owner in Lexington
pays $6,273 more than a Boston property with the same valuation, about the same as the status
quo. If the Lexington property were not owner-occupied, the gap grows to $9,443, 121% more
than their Boston peer. Because a 20% SRE benefits lower value properties, the $600,000
property owner would see their relative tax burden shrink to an additional $3,565, in this
scenario -- "only" 99% more than a Boston taxpayer. But the $2,000,000 property owner would
then pay $13,043 more, an increase to 71% above Boston taxpayers.
Because Boston has a residential exemption, the Boston property tax values shown in the left
column assume an owner-occupied home and in the right column assume a
non-owner-occupied home. The Boston tax for a non-owner-occupied $1,000,000 property is
$10,480. A Lexington non-owner-occupied home is today taxed at $14,300, almost$4,000 more
than the Boston home. This gap is smaller than other gaps because Boston's
non-owner-occupied residences pay the scaled-up tax rate without benefitting from the
exemption. If Lexington were to adopt a residential exemption, the property tax gap to Boston's
tax on non-owner-occupied properties will increase as exemption levels rise.
18 The average single family tax bill is available in Boston's own report, and it provides figures for
Cambridge (FY17)and Brookline (FY18) used in those diagrams. The Boston report contains useful
history and also demonstrates that the majority of Boston's residential property is classified as
condominium: htt s-//www.boston
62
Non-OwnerAccupied Impact
As described earlier, residential properties might be non-owner-occupied because they are
undeveloped land (low value) or because they house acommercial-style operation (medium to
high assessed value). With an SRE, non-owner-occupied properties will experience the
scaled-up tax rate which is required to make the exemptions revenue-neutral but will not benefit
from the exemption.
The chart below illustrates a previous table, showing the percent increase in residential property
taxes which would apply to anon-owner-occupied parcel, based on the residential exemption
percent set by the Select Board (zero to 35%).
Tax Impact on Non Owner Occupied Properties
35%
30°0 34 5Y.
E ]UY. 36 E°.'o
LU
Tfj
� 15% 14]°,:
KV
kP
SY'o 45'b
p.: 5°', ]04,. 15'b 30?% ZS% 36°i: 355:. AO
Nan Owner occupied Tax Increase
63
Indirect Consequences of the State Residential Exemption
While the logistics for verification and calculation of taxes can be easily described, the
Committee focused on learning about the indirect and long term consequences of adopting an
SRE. Little academic research appears to have been published on this topic, and therefore the
Committee interviewed various experts and undertook its own survey and data analysis. In this
section, we will first introduce the opinions of experts that framed the Committee's analysis, the
concerns raised, and ultimately the conclusions reached in this area.
Perspectives from the Lexington Real Estate Community
The Committee invited Real Estate Brokers with experience in Lexington residential real estate.
Participants were Diamond Hayes (William Raveis Real Estate), Robert Cohen (Coldwell
Banker), and Beth Sager (Keller Williams Realty). These subject matter experts were asked
questions about property tax stress and how people make decisions to buy and sell Lexington
residential property.
Do High Lexington Property Taxes Drive Migration?
The brokers agreed that downsizing has been the primary reason for migration from Lexington
in recent history, however downsizing square footages doesn't necessarily mean downsizing
financial investment in real estate.
Brokers had a mixed view of the role of property taxes as a motivation to sell. One broker
indicated that buyers who are trading up within Lexington don't care about taxes, but for sellers
who have lived in their homes for 40 years, taxes are a primary issue. Other brokers saw
property taxes for this older group as secondary to the personal challenges of stairs and
upkeep. Property taxes were discussed as part the overall financial picture for some senior
homeowners, factoring into whether they can afford to maintain their houses. After paying their
property tax, fixed income home owners may not have enough funds to maintain the home and
things start to fall apart. Houses in need of much repair are more likely to become tear-downs,
which present an easy exit plan.
The brokers discussed whether tax breaks, even as much as $3,000 would change the selling
decisions of homeowners who are considering leaving Lexington. The brokers felt that this was
not likely and that, overall, many residents support the higher taxes. The brokers felt that
Lexington's existing tax deferral program, which could improve a senior homeowner's cash flow
by the entire amount of their tax bill, is not taken advantage of by most who would qualify. They
indicated that most residents do not know about the tax deferral program.
Lexington's House Rental market
Brokers indicated that the Lexington house rental market is very strong, with even some
high-end houses being purchased for the purpose of renting them out. Some house purchases
are made as an investment vehicle, where Lexington residential property may be seen as a
more reliable investment than liquid capital markets.
64
Not all renters are families with children. The desirability of living in Lexington, aside from the
value of the public schools, drives motivation to live here. Monthly rents of$3,500 are typical of
single family home rentals, although some rents are much higher.
All brokers agreed that any property tax increase on private homes would be passed on to
renters. In contrast, anecdotal evidence from assessors and appraisers has indicated that the
sophisticated algorithms used by large rental property owners allows them to charge the highest
rents the market can bear, leaving little room for tax increases to be passed on to renters.
Property Tax as a Disincentive to Buy in Lexington
The brokers had varying responses about the level of concern expressed by home purchasers
regarding property taxes. All agreed that Lexington schools are the top motivating factor and
that many buyers will "do whatever it takes" to make it work. One broker pointed out that for
every lower priced home on the market, there are 10 to 12 potential buyers.
Home buyers looking to move from Boston or Cambridge for better schools often question the
tax rate because Boston and Cambridge property taxes are significantly lower. However other
towns close to Boston and Cambridge with highly regarded schools, such as Winchester,
Concord, Newton, Brookline and Belmont, also have high property taxes. Property tax concerns
for school-motivated buyers are mitigated by the high cost of paying private school tuition which
exceeds what could be saved by moving to a town with lower property taxes and less desirable
schools.
Other Effects of the State's Residential Exemption in Lexington
The brokers agreed that increased taxes on higher cost houses would not change the business
model for developers. Developers pay property tax on the knocked down house's assessed
value, not the value of the newly built house. The buyer is the one who pays the new, higher tax
rate.
The brokers also agreed that the SRE property tax reductions at the lower end of house values
would not be material enough to slow out-migration, and the increases at the higher end house
values would not be material enough to discourage buying.
Perspectives from Economists and Housing Policy Experts
The Committee invited four experts on housing policy and economics to a round table
discussion which took place on October 5, 2018. The participants were Peter Enrich
(Northeastern University law professor), Jonathan Haughton (Suffolk University economics
professor), Chris Herbert (Managing Director of Harvard University's Joint Center for Housing
Studies), and Chris Kluchman (Housing Choice Program Director, Massachusetts Housing
Partnership/Department of Housing and Community Development).
The panel agreed that the intended primary effect of the Massachusetts Residential Exemption
(SRE) is a tax burden shift among homeowners from lower valued homes onto higher valued
homes and onto non-owner-occupied residential properties. They noted that an underlying
assumption behind this shift is that people with lower value homes also have lower incomes and
65
experience more financial stress exacerbated by continually increasing property taxes.
However, the panel also noted that that income and property value are not perfectly correlated.
Another effect of an SRE that was discussed would be an indirect shift of some of the property
tax burden onto renters, who may be a financially vulnerable, asset poor population in
Lexington. Increases in the property tax on apartments and multi-family homes may create an
incentive to convert rental units into condominiums, capturing more tax benefit from the
residential exemption. This could reduce the size of the rental market in Lexington, depending
on the size of the exemption (incentive) and the market response.
Owners of rented-out single family homes may prefer to sell the home because market
conditions may not allow them to pass along the increase. Because the Lexington rental market
is already very small, shrinking the rental market could increase monthly rental rates. If the goal
of this Committee's exploration is retention of financially strained current residents, the panel
discussion indicated that shifting more of the property tax burden onto renters could increase
migration.
It was pointed out, however, that property taxes can also be viewed as a services fee which
would reasonably be passed on to renters. Lexington provides excellent services, which is part
of why it remains a desirable place to live.
Panelists observed that implementation of the SIRE would have implications for all facets of the
housing market. An important hypothesis is that property tax changes would be capitalized into
home value, increasing the property value for lower valued homes and decreasing the value of
higher value homes. Capitalization can occur both because a buyer is shrewd in analyzing the
impact of taxes on an asset purchase, or because a buyer has a budget and the sum of
mortgage and property taxes determine the maximum amount which can be invested in a home
purchase.'9
A first ramification of capitalization is that future homeowners would not receive any benefit or
penalty from a residential exemption, and the effect of the SIRE is twice impactful to existing
homeowners. For example, a typical Lexington condominium owner would benefit doubly: first
with a property tax reduction and second with an increase in property value due to the fact that
potential buyers could bid higher when a lower tax bill applies. Conversely, the owner of an
expensive home would be twice cursed: they would face a higher tax bill and their property
would be less attractive in the housing market, lowering sale price. The future home buyer
confronts these higher and lower prices, respectively, and therefore would experience an
investment/mortgage cost which offsets the impact of the tax policy change.
19 The only evidence of capitalization directly presented to the Committee was the representation by
brokers that buyers may have a "budget"which has to cover all monthly housing costs for a prospective
property. General understanding of housing market forces is that home buyers' budgets impact their
offers for purchase, and thus housing prices. Members of the committee diverged in accepting market
capitalization as a fact, with some members accepting general economic principles and others pointing
out the lack of any specific evidence for these claims. This text refers to market capitalization as a
hypothesis to represent the varied reactions to this argument.
66
This first ramification is reasonably well understood, and anecdotally can be observed in
Cambridge and Boston where entry level units have risen in price, reflecting their low tax rates.20
A second ramification was introduced by Dr. Haughton, which is that the initial capitalization
would change the home price and that in turn would erode the property tax impact promised by
static analysis.
Example: A condominium owner is told that their$600,000 assessed value condominium
will have a decrease in property taxes from $8,580 to $7,180 ($1,400 less) with a 20%
SRE. However, within a few years and a full assessment valuation cycle, their$600,000
condominium has increased in value to $640,000 while more expensive properties have
not increased as much or may have declined. This same homeowner sees their$7,180
tax bill increase to $7,582 due to the fact their property is now more attractive.21
Dr. Haughton developed a and estimated that about 28% of the residential tax
exemption effect would be lost due to change in property values in the opposite direction from
the tax effect.22 For policy makers concerned about affordability for Lexington decades hence, it
may be disconcerting to realize that a residential exemption is a double handout to existing
homeowners of lower-valued homes with no expected long term benefit for affordability by future
residents.
There was a clear consensus among panel members that the State Residential Exemption is a
blunt instrument, affecting the entire residential housing market in both potentially desirable and
potentially undesirable ways.
None of these experts advocated adopting the State Residential Exemption to address the
challenge of assisting lower income seniors with remaining in Lexington, although two panelists
said they could support it being implemented at a low level (i.e. a 10% exemption) as either a
progressive tax or a symbolic consideration for passing a contemporaneous override. To
address the core challenge, these experts preferred the Means-Tested approach and urged
increased promotion of Lexington's Tax Deferral Program.
Aggregate Residential and Commercial Property Value in Lexington
Under Proposition 2 Y2, the total tax levy in Lexington cannot increase faster than a calculated
rate. Each property class (residential, commercial, industrial, and personal) pays a percentage
of the levy. But any change in the percentage of the tax levy that each class pays is driven by
the change in assessed value of each class. Because residential properties have been
20 This capitalization effect undermines the ability of the average citizen to compare home prices across
markets. Boston home prices are often cited as indicators of the high cost of housing in the Boston area
when tax rates are lower than many comparable cities. A corollary is that there are no"free lunches", so a
Lexington home buyer cannot save money by shifting assets to another city, but instead is shifting
property tax costs to mortgage or investment opportunity costs. These capitalization effects seem true in
principle but are difficult to accept at face value given varied circumstances of home buyers. This
deserves further theoretical and empirical research.
21 According to the Haughton model in the years immediately following an SIRE, assessments and
therefore tax bills would increase more rapidly for those homeowners who received an SIRE benefit.
22 Hypothetical example above uses 28% to give the reader a sense of the magnitude in practice.
67
appreciating in Lexington more rapidly than commercial properties, a "tax shift" occurs where
residential properties in effect absorb most of the town tax increase, and therefore homeowners
experience tax rate increases higher than the aggregate levy limit increase.
Adopting a residential exemption will impact home values in Lexington, but the Committee has
not determined whether the aggregate impact of the dynamic system would be to increase
residential aggregate value or decrease residential aggregate value. Any change in aggregate
value would further impact the taxes paid by each class of property. A change in aggregate
value is a secondary effect and should therefore be small, but to homeowners stressed by a 5%
increase, a change to 4% or 6% might be seen as psychologically material.
Condominium Conversions
Neither the Committee nor the roundtable experts have conducted empirical studies of the
factors which drive Massachusetts condominium conversions. It could be that market forces
beyond property tax policy largely drive this phenomenon. However, in observing the extent to
which condominiums have replaced apartments in formerly large rental markets, one should be
concerned how tax policies impact conversion.
The potential for applying a full Residential Exemption to each condo unit makes condos more
valuable with an SRE in place than without an SRE in place. This creates an incentive to the
building owner to reap that higher value by converting each rental unit into a condominium and
selling it.
By itself, this might not be sufficient motivation for conversion, but when combined with other
benefits it could serve as a tipping point. Some two-family home owners may convert to
condominiums in response, decreasing rental availability and changing Lexington
demographics.
For a larger property, the incentive to convert to condominiums could yield a significant asset, as
illustrated below:
Assumption: Lexington Select Board Adopts 20% SRE
Illustrated Impact: Katandin Woods (128 units).
Direct, Immediate SRE Effect: 20.6% increase in taxes ($362,963 to $437,732).
No exemptions would exist for this apartment complex as it is not owner occupied.
Conversion Benefit: If all 128 units were converted to condominiums, each owner occupied
unit would be entitled to a 20% exemption ($194,761). The total exempt property would be
128 * $1945761 = $24)949)408. At a 17.03 tax rate, this is a reduction of$424,888 in property
taxes.
This illustrated exemption amount would substantially equal all property taxes due from the
apartment, and a greater amount than paid by Katandin Woods today.
In practice, market forces would be expected to increase the value of these new
68
condominiums, so it seems likely that increased property taxes would be paid by
condominium owners. However, accepting this argument means recognizing that Katandin
Woods would be rewarded with a substantial increase in property value as a result of a
condominium conversion under SRE.
Net Present Value (NPV): The simplest valuation process is to calculate the NPV of the
$424,888 net exemption. The NPV of this reduction depends on the discount rate used:
3%: $145162,933
4%: $10)6225200
5%: $8,497,760
Katandin Woods assessed value in FY2018 is $25,382'000.23 Hence, SIRE adoption could
create a material incentive for condominium conversion.
Significant condominium conversions may increase rental rates by reducing supply and change
the demographics of Lexington by excluding renters without the resources to purchase a
condominium. These newly owner-occupied conversions will erode the benefit of a residential
exemption for existing beneficiaries because the tax rate will have to be further increased to
cover the cost of the new exemptions.24 The Committee is therefore concerned that direct
implementation of the SRE could negatively impact Lexington's diversity and housing goals, and
even fail to provide the forecast financial benefit once second order effects occur.
Effects of the SRE by Income Profile
Those who lose most with an SIRE are owners of parcels which are not owner-occupied. We do
not have detailed information profiling owners of single family homes. However, using the
Committee's survey of residents, insights can be offered about who benefits with adoption of an
SRE.
23 The Committee did not examine the relationship between apartment assessed values and market
values, a concern raised by some residents. Katandin Woods was selected as an example because
conversion to condominiums is possible, but this illustration does not reflect any restrictions associated
with affordable housing or prior Special Permit.
24 Certain Lexington apartments have restrictions associated with affordable housing. At Avalon Lexington
Ridge and Avalon Lexington Hills, by law or by binding agreement, presently affordable units must remain
affordable in perpetuity. Under the Special Permit by which Katandin Woods was built, if the complex
were to convert to condominiums, the Town would have to purchase Katandin's affordable units to retain
their affordable status.
69
Using self-reported income, this chart shows the frequency distribution for homeowners:
Home'Valuie,v., Income (Hb m woll Ir Survey Res,ponidents)
125
000,000aid rnoire, 2 3 2 40
1,7 5 0,0 C'I 0 1 9,99,9,99 1 1 5 36
1 5 0 0,0 CI 0 1 7 49,999 2 3 4 12
7�\� 5,
1,2 5 0,0 0 0 1,499,999 1 3 5 5 13, 17'
E
1,0 0 0,0(DO 1,2 49,999 2 5 14 11 40
0 1 N IIIR Hireilakeven ix)jlint
_50
TIN
75 CI,OCIO 999,99,9 8 13, 30 29
5 0 0,0(DO 749,999 6 101 16, 35, 44 32, 21 25
L,ess,i han$500(3 D 0 4 5 7 4 4 1 1
{rN
CID
0
071 Illy
17D
C1 17-1 (D Cl",
C1 r-71
III Ln
j Ln
ID Ln
r.-I r__j
Income
In each cell, the number represents the count of respondents who had the income and home
value at the intersection shown. The coloring of the cell is simply a heatmap (bar on the far
right)with darker blue colors showing more frequent occurrences.
A few observations are noteworthy:
• Below the breakeven point (about $1,150,000 for this chart), all income levels are
represented and most households report incomes over$100,000.
• For those living in homes assessed below $750,000, only a minority have household
incomes above $200,000, while this income level is more prevalent among higher valued
homes.
le Some households live on very limited incomes (under$75,000) in homes valued as high
as $1,749,999. Households above the breakeven point with limited income may struggle
to pay increased taxes under an SRE.
70
One might also review the ability to pay property taxes directly for homeowners versus the
indirect payment of property taxes by renters. Among survey respondents, owners reported
household income as follows:
Income (Owners)
I' Income
:200,000 and over
^s�
$iso,000 sisv,s 168
Sloo,000 b1a9,9 209
g75.000-g99,000 �
850.000-874.999 �4
g35 aoo-gas 555 36
Less than 835.000 27
hnly mcludes respondents responsible for housing costs.
The majority of owners have household incomes above $100,000 per year.
Renters reported household income as follows:
Income(Renters)
Is lincome
$200,000 and over 1�
$150,0004199,9991�
g100 000-gla9 999
S75,000 g99,000 1�
S50.000-S74,955
S35,000 ga5,55s 1�
Less than 835,0 1�
�nly includes,respondents,responsible for housing costs,.
71
Slightly less than half of renters have household incomes above $100,000 per year. As shared
earlier, renters pay far less property tax than owners, even on a pass-through basis. However,
these statistics demonstrate both a somewhat lower ability to pay property taxes among renters,
and also that the incomes of renters range from very low to high. The Committee's hypothesis is
that some portion of increased property taxes could be passed through to renters, except for
renters living in rent-controlled housing set at regional rates. However, if owners react by
converting to condominiums, such change could be especially difficult for those with incomes
below $75,000 (with presumably low asset levels), a group which represents 44% of renters as
compared with 12% of owners.
Residential Exemptions in Massachusetts Communities
The Committee examined towns which have adopted the SIRE to understand their procedures
and whether they are solving issues similar to Lexington. This table shows the municipalities in
Massachusetts which have adopted the SRE:
ww � � miiiiiiiii V �„ W III
III P U
ryi i III
'I, W U mlu lug
Boston 35%
Brookline 21%
Cambridge 30%
Chelsea 30%
Everett 25%
Malden 30%
Somerville 35%
Waltham 35%
Watertown 23%
i
Barnstable 20%
Nantucket 25%
Provincetown 25%
Somerset 10%
Tisbury 18%
Truro 20%
Wellfleet 20%
72
The first set of communities are cities, which have large rental populations. For these
communities, the SRE serves the purpose of shifting the tax burden from homes to apartments.
With the exception of Somerset, the listed towns are vacation communities on the Cape or
islands with significant numbers of absentee owners of second homes. The effect of these
exemptions is to shift financial burdens from the year-round owners to the seasonal owners.
The Committee has not found any published studies from these communities justifying a
residential exemption.25 Two municipalities have discontinued the SRE: Marlboro and
Weymouth.
Summary
This chapter describes the implementation of the State's Residential Exemption (SRE) including
the anticipated verification process. It provides a static analysis of which property owners would
pay more and which would pay less, and provides three series of charts benchmarking
Lexington to other communities with and without a residential exemption, with further examples
in the appendix.
Beyond static analysis, many issues are raised about indirect and long term effects of adopting
an SRE:
• A tax shift is expected to be capitalized into home values, providing a "double impact" on
existing homeowners and eliminating any economic benefit for future Lexington
homeowners.
• A dyoami�g�sis of tic chaDge
® . The actual impact on homeowners will be
less than stated in the static analysis because properties at the lower end would inflate
some amount while high end properties would suffer some deflation.
• There is speculation on whether these tax changes would be passed through to renters.
In the short term, it was reported that large rental complex owners already charge the
maximum amount possible, leaving little room for further increases. Private house
rentals might experience pass through of tax increases.
• Over the long term the rental market might be reasonably expected to shrink with an
SRE. Absentee landlords would be less likely to invest in Lexington real estate for
investment purposes (due to differential to peer towns) and two-family homes and
apartment buildings would have material incentive to convert units to condominiums.
Conversion to condominiums would shrink rental inventory and likely drive rental rates
upwards, changing Lexington's demographics.26
25 Several communities which adopted a means tested exemption instead of the SRE published studies.
26 Qualified subsidized housing inventory (SHI) could be reduced by conversions as well.
73
6. Massachusetts Model Means-Tested Residential
Exemption Laws
Five towns27 in Massachusetts have adopted a local alternative to the State Residential
Exemption (SRE) known as aMeans-Tested Residential Exemption (MTRE). Unlike the SRE,
which applies an exemption to all owner-occupied residential properties without regard to the
income, assets, age or residency length of the owners, MTRE's grant property tax exemptions
to seniors which meet income, asset, and residency criteria. MTRE's are subject to specified
caps on house value and overall cost to the town's budget. Most MTRE's are revenue-neutral to
the town, with the cost of the benefit redistributed among all residential taxpayers by a
commensurate increase in the tax rate.
The appeal of means-tested exemptions is their higher precision in targeting residents in need
of assistance. Moreover, providing tax relief to a more limited population reduces the magnitude
of tax shifts, and may be expected to have a smaller impact on housing markets.
Existing MTRE Laws in Five Towns
Through a Special Act of the State Legislature in the year 2000, the Town of Wayland adopted
the first means-tested Residential Exemption in Massachusetts. Under Wayland's MTRE,
homeowners who meet the State Circuit Breaker's eligibility criteria (see second table below)
receive a match of up to a 100% of the Circuit Breaker limit (presently $1100). The towns of
Reading and Hopkinton have adopted a similar version of this model, providing a benefit that is
between 50% and 200% of the Circuit Breaker benefit.
In 2012, Sudbury created a new model of means-tested exemption, which has its main
elements copied by Concord (see table, below, with distinguishing details among these models).
Under the "Sudbury model", a taxpayer who is 65 or more years old, possessing home and
asset values below a modest level, and at least ten years residency could receive a property tax
reduction calculated to bring their property tax obligation down to 10% of their income.
27 After Committee acceptance of this report, information was received that the Town of Harvard has also
received special legislation for ameans-tested exemption. It is similar to the Sudbury model, but paid for
from the municipal budget without reallocation. A local committee evaluates the applicants assets for
eligibility.
74
Massachusetts Model Means-Tested Exemption Laws
b 11111e
Ilu I
Income Limit Per Circuit Breaker Per Circuit Breaker Per Circuit B ElPer
reak Circuit Breaker Per Circuit Breaker
Asset Limit "Excessive" "Excessive" "Excessive" "Excessive" "Excessive"
Age Per Circuit Breaker Per Circuit Breaker Per Circuit Breaker Single 65+,joint 60+ Per Circuit Breaker
allowed
House Value Average Single Family <Median SFH Per Circuit Breaker Per Circuit Breaker Per Circuit Breaker
Home(SFH)+10%
Residency 10 year consecutive 10 year consecutive 10 year consecutive 10 year consecutive 10 year consecutive
Benefit Exemption of the Exemption of the 50%to 200%of the Set annually by Up to 100%match of
amount that property amount that property amount that the Selectmen-benefit is the Circuit Breaker.
tax exceeds 10%of tax exceeds 10%of homeowner qualified 50%to 200%of State
income,less the income,less the for under the Circuit Circuit Breaker Tax may not be
amount that the amount that the Breaker reduced to less than
homeowner qualified homeowner qualified 10%of household
for under the Circuit for under the Circuit income..
Breaker income limits. Breaker income limits.
Benefit Cost Cap Maximum total of Maximum total of None
benefits is.5 to 1 %of benefits is.5 to 1 %of
levy,pre rate-setting levy, pre rate-setting
per Selectmen per Selectmen
Who funds? Residential Residential Residential Residential Municipal Budget
reallocation reallocation reallocation reallocation not reallocated
Massachusetts Circuit Breaker Parameters, 2018 Tax Year
Income Limit Single:$58,000
Head of Household:$73,000
Married,filing jointly:$88,000
House Value Limit $7787000
Maximum Credit Given $1,100
Adoption
Creating an MTRE requires a town to write a home rule petition asking for a Special Act of the
legislature. Because the Committee was inclined towards action, our initial intent was to
construct a local proposal drawing on elements from these models. However, as we delved
deeper, we discovered that assessors were dissatisfied with aspects of adopted legislation, and
these models had critical drawbacks which concerned the Committee. The next section
provides additional details about existing implementations, while the following chapter proposes
possible models for Lexington.
75
Offsetting Loss of Circuit Breaker Tax Credits
As the Committee learned more about MTREs, we encountered evidence that both the SRE
and MTREs would be funded locally but that some benefits would be offset by reduced
State-paid benefits that local residents would have otherwise received. For example, 447
Lexington household might already be receiving a property tax rebate on their state income
taxes from the Massachusetts Senior Circuit Breaker Tax Credit (2016). This rebate applies if a
household's property taxes exceed 10% of their income, up to a maximum of$1100 (2018 tax
year).
For some households which are close to the 10% threshold, a reduction of property taxes would
reduce benefit from the tax credit. Current recipients of the tax credit may be in one of two
situations, with these effects:
I I
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...........................................Property taxes far above 10% of income No offsetting reduction
Property taxes just above 10% of income Reduction in benefits as much as $1100
The concern is that Lexington would provide property tax reductions to a household just above
the 10% income threshold, and the household would not receive full benefit because it would
lose some or all of the state circuit breaker credit from the state. Thus, a portion of local tax
relief monies are wasted as offsetting reductions occur.
The Committee does not have direct information on how many households are near the 10%
threshold. Indirect information suggests that households may be near the 10% threshold. The
number of Lexington recipients of the circuit breaker has been steadily declining, and a possible
cause is proximity to the 10% threshold.
In discussing the MTRE with the implementation expert in the Wayland Assessor's Office, it was
confirmed that several taxpayers receive a Wayland Circuit Breaker match on an
every-other-year basis, as the local funds not only displace the State funds, but in fact make the
taxpayer ineligible for local reduction on an alternating year basis. Thus, legislation could reduce
predictable cash flows for residents and cost the town money which serves no net benefit for
residents.
Funding
An MTRE can be funded by reallocation to the residential property tax class (as the SRE does),
to all property tax classes, or funded within the tax levy. Because MTREs typically require less
than 1% of a town's revenue, either approach might prove practical. As the MTRE comparison
chart above demonstrates, communities following the Sudbury model have funded their
76
exemptions by increasing the residential tax rate, while Wayland funds exemptions from their
Overlay Account.
An Assessor's Perspective on Means-Tested Residential Exemptions
Lane Partridge, the Concord Assessor and the Chair of the Massachusetts Assessor's
Association, met with the Committee on November 16, 2018 to share Concord's experience with
the implementation of a Special Act that granted Concord their own version of a Means-Tested
Residential Exemption.
The Concord law is based on Sudbury's means-tested exemption with the exception of capping
Concord's eligible house value at the town's median single family occupancy (SFO) value rather
than the average SFO plus 10% limit utilized in Sudbury. Otherwise, both Concord and
Sudbury's eligibility parameters match those of the State Senior Circuit Breaker Property Tax
Credit.
The first year of Concord's implementation was FY2018 which based applicant income and
property value on Calendar Year 2017 figures.
Implementation Issues Experienced by Concord
Massachusetts MTRE models use the State's Circuit Breaker income worksheet to determine
eligibility, but the Circuit Breaker worksheet adds Social Security and other distributions not
taxed on the State tax return. This complicates the process of vetting local MTRE applications.
The Concord assessor hired a CPA to assist their office in understanding the Circuit Breaker
worksheet. In their experience, taxpayers routinely make errors in filling out these complex
worksheets, and the assessor's office has a duty to review each application for accuracy, which
is a time consuming process.
As with other means-tested exemptions, asset limits are not specified by Concord's law. Instead,
the law gives the Concord Board of Assessors the authority to set policy on the level of assets
they determine to be "excessive." The Concord assessors exclude applicants with more than
$250,000 in additional assets. The assessor shared with the Committee that external asset
testing was made difficult by the lack of accurate reporting by applicants. The Concord assessor
specifically highlighted that the population that a means-tested exemption targets may have
lower levels of financial literacy and be unable to self-assess eligibility or provide accurate
information to an assessor without further support.
In the end, a large effort on the part of Concord assessment staff was required in the first year of
implementation which yielded a small number of property tax exemptions. While 250 Concord
residents were approved for the State Circuit Breaker in 2017, only 59 applied for the Concord
MTRE. The assessor indicated that multiple announcements and mailings had been distributed,
so their office believed that most eligible residents had been notified. They hypothesized that the
$250,000 asset limit had discouraged many applications. Of the 59 applicants, just 49 were
approved in FY2018. Thus, the Concord effort reached only 20% of Circuit Breaker applicants in
the first year. This provides a benchmark should Lexington adopt similar provisions.
77
Perspectives from Economists and Housing Policy Experts
As referenced in the SIRE section of this report, the Committee invited a panel of four experts on
housing policy and economics to a roundtable discussion on October 5, 2018. The panel noted
that MTREs differ from the SIRE in that the benefit is based on the taxpayer's need rather than
on the value of the taxpayer's property. It benefits a smaller, but more targeted group of
beneficiaries and, unlike the SIRE, it doesn't have the significant unintended effect of impacting
home values. The MTRE approach can assist lower income seniors at thresholds determined by
Lexington itself.
The panel described a few drawbacks of existing MTREs as well. One is that the ten year
residency requirement in place in some communities may violate federal standards on mobility.
(A second issue with this residency requirement was voiced at the Lexington public hearing,
which is that a long residency requirement might have the unintended side-effect of promoting
Lexington's existing racial and ethnic demographic over groups outside Lexington.) On the other
hand, a residency requirement can satisfy taxpayers that an exemption intended to help
residents struggling to remain in their homes would not be consumed by newcomers who might
deliberately purchase properties calculated to take advantage of these programs.
Panel members also discussed the Lexington Tax Deferral Program as an important property
tax relief tool that seems to be under-utilized. The panel felt that effort spent on promoting and
explaining this program might be the most effective approach for assisting lower income senior
residents.
Summary
In short, the Committee examined the five existing means-tested residential exemptions (MTRE)
in Massachusetts. The direct consequences of these programs were not always efficient, with
local tax reductions offsetting the State Circuit Breaker. These discussions made the Committee
aware that even the SRE would result in decreased local eligibility for the State Circuit Breaker,
another example of how local exemption dollars could fail to land in the hands of local taxpayers
and relieve tax burden.
The Committee felt that none of the existing programs were suitable for direct replication in
Lexington. Interviewed assessors and staff shared that they had wished their communities had
studied legal provisions in detail before adopting legislation. Therefore, the Committee
undertook to provide broad outlines to legislation which could be created for Lexington, a
subject to which we next turn.
78
7. Lexington Means-Tested Exemption Proposals
An early straw poll found that the Committee had mixed reactions to the SRE but were generally
enthusiastic about Lexington adopting a variant of ameans-tested residential exemption. The
Committee recognized that existing means-tested statutes have certain gaps or flaws and
broached the idea of creating aLexington-specific means-tested measure. A first obstacle was
that the Committee does not have a specific charge for which segment of the population should
be assisted, and opinions varied about who should be helped. Should a Lexington proposal help
lower income or house-poor? Should it help the homeowner or the renter? Should it treat the
long term resident the same as the newcomer?
After initial research, the Committee modeled two examples of possible means-tested
exemptions, recognizing that the development of legislation appropriate for Lexington would first
require an extensive public process to determine the will of the community, including who should
benefit, the level of benefit, and who should pay for it. Only then could legislation be drafted,
analyzed, and pursued for enactment.
The Committee gave the Select Board an interim update in January 2019, and based on their
input have decided to outline these two exemption models without drafting exact legislation.
Therefore, this chapter is not intended to be a comprehensive blueprint or legislative draft. It will
require community participation to determine a course of action and then additional work from a
future body to evaluate and propose the details of the final legislation.
This chapter will first review the eligibility criteria found in typical means-tested proposals, and
share what the Committee has learned or recommends in each area. Then the chapter will
describe two types of proposals: one proposal focused principally on residents with limited
means and a second focused primarily on residents who have reached a certain age. An
overview of what these proposals could contain and simulated financial impact provides policy
makers a starting point for these models.
Drafting legislation and pursuing support for these proposals is expected to be time consuming.
The need for these proposals stems from inadequate property tax relief for Lexington, and it
should be noted that an alternative path would be for the Lexington Select Board to lobby for
changes to existing State laws (such as the Circuit Breaker tax credit and tax deferrals).
Lexington Proposals
Many considerations impacted the design of possible proposals. Here we outline rationales
which informed the Committee. Following the rationales, two proposals are introduced and
evaluated against criteria.
79
Rationales for Eligibility
Age: With an aging population that is staying healthy longer and retiring later, using age 65 as
an age cutoff has the unfortunate effect of making so many residents eligible that levels of
financial assistance become diminished. It makes sense to start financial assistance at age 70
or later to balance the desire to provide assistance with the number of individuals who may feel
that their age justifies assistance. As an individual ages further beyond 70, access to new
sources of income may generally diminish.
Home Value: Capping eligibility based on the median Lexington home value may make political
sense, so that taxpayers are not subsidizing those who choose to remain in better-than-median
homes.
Asset Level: Households with material asset bases may be reasonably expected to tap into
those asset bases before receiving a Town subsidy. We may reasonably expect younger
retirees have need of more assets than older retirees because it is assumed that their assets
will have to last them for a longer period of time. However it is not clear that this would require
applying higher thresholds for younger retirees. Maintaining a consistent asset level across
ages would have the effect of providing more relief for senior retirees and less to younger
retirees who should have a larger asset base.
Income Level: Combined with assets, lower income is commonly thought to represent need.
However, with the advent of Roth IRAs which do not have required minimum distributions
(RMDs) from IRAs, households may be able to better control the years in which they receive
income and through financial planning create evidence of a need for financial subsidy.
Therefore, income should not be the only means-testing criterion. We have also learned that the
Circuit Breaker income formula includes non-taxable sources of income, and therefore it also
seems important to follow that pattern rather than using adjusted gross income (AGI) from a tax
return.
Ownership: The guiding principle is property tax relief, so the notion advanced is that someone
paying property taxes is (by definition) an owner and would be the one receiving relief.
Therefore these criteria collectively focus on access to income and assets for the actual
beneficial owner(s). This also avoids a "rent-a-senior" situation where a senior citizen
participates in the household specifically to provide relief for an otherwise unqualified owner.
The Committee also discussed whether Lexington should follow the state Circuit Breaker
pattern in providing tax relief to renters as well. From the Wayland Assessor's Office we learned
that providing financial assistance to renters involves assisting a resident who does not pay
local property taxes, which then is neither a direct rebate nor refund of taxes. Therefore the
Committee does not recommend directly undertaking property tax relief for renters despite
survey evidence indicating significant housing stress.
Residency Length in Lexington: An argument for longer residency requirements is to benefit
those individuals who have been supporting the Town by "paying into" the local tax system and
not simply moving into town for tax benefits. An argument to waive residency requirements was
80
a concern raised by Peter Enrich that such residency requirements might be considered
discriminatory under federal law. All towns with existing means tested exemptions have
residency requirements. The Committee feels that a 5 year residency requirement is a
compromise between contributing locally and yet maintaining openness and support for
newcomers. Proposed legislation should specifically address whether the length of residency
should additionally be required to be contiguous or recent.
Rationales for Benefits
Materiality: Benefits should be material enough to have an appreciable effect on the
beneficiary's financial decisions. A program with immaterial benefits and significant
administrative costs makes no sense.
Supplemental: The benefits received should be assumed to accompany other remedies and
breaks available to a household, such as the State Circuit Breaker and Lexington's Tax Deferral
Program. Lexington's proposal should avoid displacing other financial assistance available to
the homeowner, and instead be crafted to add to existing financial supports.
Justifiability to other residents: The survey indicates that a large part of the population has
difficulty with housing costs, so any benefits should be justifiable even to another resident
struggling with housing and not receiving a benefit.
Targeted: Benefits should be targeted to individuals with demonstrated need.
Housing Price Impact: Benefits should be designed so that they attach to the individual rather
than the property, and thereby avoid adding material distortion to housing prices.
Financial cliffs: Critics of existing State and local policies point to financial cliffs, causing a
household slightly above a criteria to lose all financial assistance. Legislation should provide
smoothing as possible, yet avoid excessive complexity.
Predictability: Total benefits offered to a household should be relatively consistent from year to
year, avoiding every-other year effects or other oscillations due to interactions with other
systems.
Surviving Spouse Protection: The benefit system should avoid penalizing those who become
widowed. (Existing systems tend to lower income and asset thresholds upon death of a partner,
and fail to reflect that many household costs continue beyond that event.)
Understandability: Taxpayers and beneficiaries should be able to comprehend the benefit
system being proposed.
Flexibility for Government: As benefits are indexed to other legislation (such as the Circuit
Breaker), enough flexibility should exist that town government can respond when material
changes occur to demographics or to related legislation, such as elimination of the Circuit
Breaker or significant changes to it.
81
Flexibility for Individuals: Avoid restrictions that impose undue burdens for beneficiaries who
seek to relocate within Lexington or remodel their home, especially for home modifications
which allow homeowners to age in place.
Impacts on Town Budget: The beneficiary pool should be small enough that material support
to targeted individuals could be absorbed with a relatively small impact among non-beneficiary
taxpayers or within the town's annual budget.
Proposal #1 : Circuit Breaker Style Means-Tested Exemption
This proposal was developed with the intent of reflecting the goals of other MTREs while
adjusting for limitations such as addressing the needs of surviving spouses and avoiding local
tax abatements which result in reduced State Circuit Breaker benefits and are therefore wasteful
uses of local funds.
Goal:
Provide material assistance to seniors with demonstrated financial need as a supplement to
existing programs such as the Circuit Breaker and property tax deferrals. The objective is to
lower a household's property tax contribution closer to 15% of income for those households
experiencing high levels of property tax stress, a percentage which avoids adverse interactions
with the Circuit Breaker.
Eligibility:
• Age: 70+ years
• Owner: Oldest owner of household, with 50%+ beneficial ownership
• Residency: 5 years, with 2 continuous
• Home Value:At or below the median value of Class One residential properties
• Calculation Basis:The State Circuit Breaker has three income thresholds. The highest
income threshold is designated for taxpayers who are Married Filing Jointly (MFJ). The
lowest income threshold is designated for Single Individual taxpayers (SI). Both the
MFJ income threshold, currently $86,000, and the SI income threshold, currently
$58,000 form the basis for setting qualifications for the Circuit Breaker Style
Means-Tested Exemption. These thresholds will be used for all households independent
of filing or marital status.28
• Asset Ieve129:A multiple of the MFJ of between 1.0 and 5.0 as set by the Select Board
annually.
Income level: See formulas below.
28 One issue to resolve is whether household assets should be prorated for beneficial interest or
another adjustment to remove incentive to divorce to bring household assets under this
threshold.
29 Asset level excluding primary residence, personal effects, motor vehicles and cemetery plots (as in
41 C).
82
Benefit
Home owners: For households with residential assessed value at or below the State Circuit
Breaker maximum level:
• Households with income below the SI threshold (currently$58,000) can receive up to N
times the Circuit Breaker value. The Select Board sets the value of this Circuit Breaker
multiple annually, to be between 1.0 and 3.0. The multiple of the state Circuit Breaker is
the planned reduction in an individual's property tax bill, provided the reduction in
addition to the individual's prior year State Circuit Breaker, does not depress property tax
to income ratio below 15%, and in the event this would occur, the benefit is adjusted
downward to the figure which matches 15%.
• To reduce the financial cliff effect, households with income above the individual threshold
but below the joint threshold (currently $88,000)would receive 1.0 times the State Circuit
Breaker as a property tax reduction, provided the reduction in addition to the individual's
prior year Circuit Breaker, does not depress property tax to income ratio below 15%, and
in the event this would occur, the benefit is adjusted downward to the figure which
matches 15%.
• For households with assessed property value above the State Circuit Breaker maximum
but below the town median: The same 1.0 level benefit is proposed as for those who are
at or below the State Circuit Breaker maximum. (In effect, the town benefit extends to the
town median residential value when that value is above the Circuit Breaker limit.) These
households would receive the full Circuit Breaker amount rather than a multiple of it, but
provided by the town.
Renters: No benefit
Annual Action by Select Board:
• Determine the maximum asset threshold by setting asset multiple of joint income to a
figure between 1.0 and 5.0
• Determine maximum Circuit Breaker multiple, by setting this figure between 1.0 and 3.0,
for households meeting all criteria with total income below the individual threshold of the
State Circuit Breaker.
Funding: Levy or tax rate adjustment
Estimate of Financial Impact:
Estimate 450 Circuit Breaker households
Estimate 50% meet asset criteria: 225 recipients
Estimate that 1.15 times Circuit Breaker is average benefit received (due to 15%, and
income thresholding applied): 225 * 1.15 * $1100 = $284,625
Further, estimate 350 households would meet Circuit Breaker income criteria but do not
meet market value criteria due to $778,000 cap, but would have a home between that
value and the Lexington median assessed value ($950,000).
83
Estimate 40% meet asset criteria: 140 recipients
Estimate that 1.15 times Circuit Breaker is received: 140 * 1.15 * $1100 = $1771100
Total cost to town: $467,725
Total beneficiary households: 365
Average benefit/household: $1,265
Proposal #2: Octogenarian Means-Tested Tax Exemption
This proposal was developed in response to a concern voiced in the Committee's second public
hearing about meeting the needs of older seniors. Existing tax policies do little for an aging
population and do not seem to reflect the needs of the oldest seniors. It seems that Lexington
and Massachusetts could provide more support for this population which uses few local public
services at little net cost to taxpayers.
Goal: Life expectancy in Middlesex County, Massachusetts is 80 years. Older seniors may
struggle to balance retirement savings and asset levels with increasing and unpredictable
property taxes. The guiding principle for this proposal is to reduce housing stress by
substantially freezing increases in residential property taxes for residents upon reaching age 80,
while providing the flexibility for 80+ year olds to adjust housing within Lexington.
Eligibility:
• Age: 80+ years old
• Owner: Oldest owner of household, with 50%+ beneficial ownership
• Residency: 5 years, with 2 continuous residency and ownership
• Property Value:At or below median residential property
• Calculation Basis: The State Circuit Breaker has three income thresholds. The highest
income threshold is designated for taxpayers who are Married Filing Jointly (MFJ). The
MFJ income threshold, currently $86,000, will be used as the basis for setting
qualifications for the Octogenarian Means-Tested Exemption. The MFJ will be used for
all households independent of filing or marital status."
• Asset level:A multiple of the MFJ of between 1.0 and 5.0. as set by the Select Board
annually.
• Income level:A multiple of the MFJ of between 0.7 and 1.2. As set by the Select Board
annually.
Benefit: Two types of benefits were discussed by the Committee. One, based on an index
factor, is straightforward to calculate but does not ensure that taxes are frozen. Another would
freeze property tax contribution amounts, but then include provisions for intra-town mobility,
material reassessment, remodeling, etc. In this section, we estimate financial impact using an
index factor method.
30 One issue to resolve is whether household assets should be prorated for beneficial interest or
another adjustment to remove incentive to divorce to bring household assets under this
threshold.
84
Calculate the "Index Factor" (IF) as follows:
IF = (Oldest owner age - 79) * .03
Property tax reduction = IF * property taxes
Examples:
80 year old owner: 3% reduction
85 year old owner: 18% reduction
90 year old owner: 33% reduction
95 year old owner: 48% reduction
Annual Action by Select Board:
• Set maximum asset level multiplier
• Set maximum income level multiplier
Funding: Tax Shift across all classes of property.
Estimate of Financial Impact:
Per Town Census:
2,031 Lexington residents age 80+
547 are in housing types where residents are not subject to individual property taxation
1,484 are possible owners and renters, and occupy 1,128 distinct addresses
Taking the oldest householder at each address, we calculate the mean age as 85.8 and the
mean benefit at 20.5%.
Assume the Select Board set the asset ratio of 5.0, for a maximum asset level of 5.0 * $881000
_ $440,000, and set the maximum income ratio of 1.0 for 1.0 * $88)000 = $887000.
We may estimate that 65% of households would meet the requirements of residency length,
maximum home value, maximum asset level, maximum income, and are owner-occupied.
733 Households = 11128 * 65%
FY2018 average home assessment $918,772.
Assume average 80+ year-old lives in a home valued at 80% of the average assessment, then
average 80+ year old home assessment is $735,018.
FY2018 average tax bill would be: $10,511.
With 20.5% reduction, average reduction: $2,155.
733 households * $2,155 per household = $1,579,398 total cost to Lexington
Total cost to town: $1,579,398
Total beneficiary households: 733
Average benefit/household: $2,155
Town perspective: A medium-sized property tax shift would occur in the year of
implementation, but in subsequent years it would appear as if the tax increases were not
landing on 80+ year olds with modest or medium means. Younger age-range households would
85
absorb slightly higher tax increases to offset. If the program retains more octogenarian seniors
or life expectancies increase, then reduced town expenses due to the non-use of public schools
by the 80+ population will largely offset further benefit increases to octogenarians. If the
program does not impact migration patterns, then only a nominal financial impact would occur
after the initial property tax shift.
Household perspective: Because property taxes increase 3-5% per year, these scaled
increases would have the effect of keeping property taxes relatively stable for a household after
its oldest owner reaches age 80. In the year of implementation, some households would see a
large drop in property taxes, which could even be more than 30%. But in future years,
households with an owner aged 80+ years would no longer see property tax bills with
cumulative and material increases from year to year. This would give octogenarians comfort
when aging in place. Tax deferral should remain an option as well.
Known Non-Owner 80-Year-Olds Living in Lexington's Residential Zoned Property (2018)
Brookhaven (1010 Waltham Street) 297
10 Pelham Road 90
William Roger Greeley Village 50
178 Lowell Street 30
30 Watertown Street 28
Main Campus Drive 27
840 Emerson Gardens 19
Katandin Drive 6
Total 547
86
Property Tax Freeze Models in other States
While Massachusetts has modest programs to assist senior citizens, some states have more
robust programs to protect seniors against property tax increases. While we do not advocate
directly adopting any of these programs, they are cited as evidence that creating an age-based
program which targets the elder population may have merit. Lexington could promote such a
program at the state level, or it could seek its own Special Act through home rule petition and
create an opportunity for other communities to follow.
The following chart compares potential models for tax freezes from New Jersey, Texas, and
Tennessee. The age eligibility for all three starts at 65, and New Jersey and Tennessee have
income limits. In New Jersey, the difference in dollars from the first year is reimbursed, while in
Texas and Tennessee, the rate is frozen at the first qualifying year. Frozen tax levels are
adjusted if home improvements occur.
EM-1.=� Eln ,mi� mm
Age 65+ 65+ 65+
Other Eligibility Lived there for 10+ n/a Income below
Requirements years, income less threshold
than -$87,000 (2017) (-$297000-$527000
depending on county)
Benefits Taxpayer reimbursed Property tax amount Property tax set in first
by state for property set in first qualifying qualifying year.
tax levels above year.
amount paid in first
qualifying year.
Evaluation
The Committee charge does not explicitly state that Lexington's elderly are the focal
subpopulation. However, the particular circumstance of retired, potentially less-mobile
community members who purchased their homes when residential property values and property
taxes were a fraction of what they are currently, is a concern of this Committee and of
community members who have communicated to us over the course of the past year. Testimony
by particular individuals highlights how vulnerable this population can be, motivating creation of
Proposal #2 above.
Although a Committee concern, we must highlight that Lexington survey data does not lend
support to the notion that the elderly experience greater housing stress than other age
categories, nor that they are more likely to migrate away from Lexington. The Committee's
decision to focus on this age cohort instead reflects our view that these residents are less able
87
to migrate or gain employment when financially strained, use relatively few town services, and
deserve some predictability in financial expenses. For that reason, both proposals contain age
thresholds.
For potential beneficiaries, the primary differences between these two proposals are that
Proposal 2 restricts benefits to "super-seniors," an older group of than specifically addressed in
Proposal 1, and Proposal 2 provides a larger benefit, which continues to increase with age.
For cost and implementation considerations, the number of beneficiaries and the cost would be
much larger under Proposal 2. Implementation costs are likely to scale with the number of
applicants. To fund Proposal 2, in particular, a redistribution of costs among younger and
wealthier residents would be necessary. These other residents may not wish to fund the
preservation of their elderly neighbor's equity in their home, equity that will be inherited by their
heirs. Some degree of participation in the property tax deferral program could be added as a
requirement to mitigate this issue.
IIIIIIIU
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II, lug, III aa'a' IIIIIIIIIII V' III III IIIIIIIIIII I' III
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1111111111
Property Tax Related Fair precision if objective is High precision if objective is
Housing Stress: Precision helping those with limited helping 80+ year olds
means
Property Tax Related Low recall if goal is to relieve Recall high for 80+ year olds
Housing Stress: Recall housing stress across with limited income
community
Total budgetary impact - None Possible reduction in
Lexington budget aggregate demand for
schooling, but less than size
of tax shift to occur.
Short term Housing Market None None
Impact (Prices / Rents)
Optimal Allocation of None Goal to support 80+ in home
Housing (&flexibility for may reduce optimal allocation
future) -who's in it and of housing
ownership assumption,
condoizing, tear down
Equitable Taxation Small Debatable
Migration ? ?
88
8. Conclusions and Recommendations
The Committee has appreciated the opportunity to dig deeply into the subject of residential
exemptions, an area which has relevance to Lexington's long term success as a community. We
have been privileged to have the time to learn from many subject matter experts and policy
makers, conduct a detailed survey, and talk with numerous residents. Through this process, we
have learned that many Lexington residents are concerned about local taxes, and yet there is
widespread support for thoughtfully taking the time to develop the right course of action for
Lexington.
After debating the State Residential Exemption at length, the Committee agrees that no single
exemption or other policy tool alone can address the existing property tax stress in our
community, but rather amulti-pronged approach that includes more targeted tools could provide
substantial benefit. We additionally agree on the following set of policy recommendations, and
recommend continued attention to this challenge by the Select Board in view of planned debt
exclusion projects.
Local Tax Policv:
1. Do not adopt the Massachusetts Residential Exemption
2. Develop for community consideration a proposal for ameans-tested and/or
age-based residential exemption.
3. Promote awareness of existing programs such as tax deferrals, exemptions, and
the Massachusetts Senior Circuit Breaker Tax Credit.
4. Evaluate increasing eligibility thresholds significantly for the Lexington Tax
Deferral Program.
State Advocacy:
5. Advocate for expanded access to tax deferrals for homeowners with existing or
future mortgages and home equity loans.
6. Advocate for expanded access to the state administered Senior Circuit Breaker
Property Tax Credit for surviving spouses and those with home values above the
current eligibility threshold, as well as expanding the level of rebate.
Further Study:
7. Further study the financial needs and supports necessary for Lexington's
population of older(80+) seniors to "age in place".
8. Further study methods to retain middle-aged residents who have the highest rate
of forecast out-migration.
On March 22, 2019 the Committee voted separately, and unanimously, in support of each of
these recommendations.
89
Appendix: Property Tax Benchmark Chart
Lex ington v. Bostoln
IIFY2018 Residential Proplefty T IDemolgraphics and Residential Taxes
$2,0100,000 33,327
$1B,287 685"094
$1,1SO01000
$1,600,0100 $0
$14M5
> $1,400,000-111�INILIENENNNNEMIIIIIIIIillillillillilllllllllIIIIIIIIIIIIIIIIIIIIIIIIIIIII$20.02,0,(-+$,B4O21p,
a $11,9919 .llr,ff 7$14,16,9
0) $3,324
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Residential Property IT Residential Property Taxes
90
Lexington v. Brookline,
IFY2018 Residential Propleity Tax Demographics and Residlential Taxes
$2,000,000
$16,585 59,157
$14�693, M.,, rj MI.,.,m $99,0405
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5116.11585 518,92 0
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$3,341 BrookIiiine $5,671-3 Brookline
Residential Property IT Residential Property Taxes
Brookline average single tax bill source:
ads/2018-03�ft2a!Bja�g�����.
91
Lexington v. Burlingtan
IFY2018 Residential Proplefty Tax IDemolgIraphl'ics anid R,esidlentiall Taxes
52,000,000 528,600 7,36,D) 33,7 27
$21,240 27,176,
"ME 5slao,8 0 5
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ReslidenUal Property Taxes Residenbal Property Taxes
92
�Lexin'gton v. C&mbrid�ge,
IFY2018 Residential Proplefty Tax IDemoigrapKics and Residential Taxes
S2,000,000 "111=111111111111111'll""Iiiiiiiiiiiiiiiillillilillillillm=llillillilillillillillillillillillilliillillillillillillilliillillilillillillillillillilillillillillillillillillilliillillillillillillilliillillilillillillillililillilljlllIIIIIIIIIIIIIIIIIIIII S28,�600(+$18,153 33,7 27
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510„447 �12,1580
IIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIII
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S91,1189 S11,322
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a S5,67 3 $8,806
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0 $1,200,000-
S5,415 $7,548
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$4,157 $6,290,
1111=1111111111111111illillillillillillilljIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIII1111111111$11,075�+S 8,776) -1110=111111111111111illillillillillillilljIIIIIIIIIIIIIIIIIIIIII1111111111111IIIIIIIIIIIIIII$1,2X1512,(+57,480�
S2,899 S5,032
1111110=1111111111111IIIIIIIIIIIIIIIIIIIIIIIllI 7,,,947(+$6,30,6), �illillillillillillilliilillill� Lexiiington ililmm&u=llllllllllllIIIIIIIIIIIIIIIIIIIIII$�9,,,3,84(+$5,619) �illillillillillillilliilillill� Le'XIIIngton
$1,641 Ca m birid ge $3,774 Cambiridge
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$2,000,000 20,8,83), jj��101& $$ qsMEMMMNEMIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIII1111111111111IIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIII111111111111IIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIII1111111$34,500,(+-21.,9,20)
$1%447 $12,158,01
-11IIINNIRIIEEIEIE=IlllllllillillillillillillilliillillillillillillillillillilillillillillillillilliillillillillillillilliillillilillillillillillillillillilililllllllllllllllllllIIIIIIIIIIIIIIIIIIIII�$27�880(+$.18,i5,91,) . $3 1 + 19,7 28)
�91,1189 SI 2,32 2
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$7,9131 $10�064
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a $6,67 3 $8,806
CD
0 S1,200,000 17,53 (+ 12,115 IIIIIIIIIIIIII IIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIII$20.700(+$13,152
$5,415 $7,548
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$ $3,774
le
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V1,000,000IIIII IIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIS3 3, 7 29) 11IIIONEEMEMMMMMIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIII11111111IIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIII111111111111IIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIllI$38 480(+$25,IIIII 900)
$10�447 $12,1580
$1,400,000 $29,132 S(+ 20,1 39 li��INNIRIIEEIEIE=IlllllllillillillillillillilliillillillillillillilliilliilliillillillillillillilliillillillillillillilliillillillillillillilliilillillilliillilljlllllllllllllllIIIIIIIIIIIIIIIIIIIIIIll�$34�632(+$2 3,3 1 O�
$11,322
:3 $1,600,000-mmmiiiiiiiiiiiiiiiimMillillillillillillillillillillillillillillillillilillillillillillillillillilliillillilillillillillilIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIII1111111111111111111$,25.480(+$.17,549) -ENMIIIIIIIIIIIIIIIIIillillillillillillillillillillillillilliillillilillillillillillillillillillilliillillilillillillillillillillillillilliillillilillillillillilljlllllllllllllllIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIII11111111�$30,783(+-$20,,7.19)
(a $7,9131 �10�064
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a $6,673 S8,806
CD
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$5,41.5 $7,54B
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$"00 ,00 -
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$1,641 Cambiridge $3,774 Cambiridge
Residenbal Property Taxes Residential Property Taxes
Cambridge average single family tax bill for FY2017, source:
ads/2018-0a&201 8factsfigures.pdf.
93
Lexington v. Cancord
IFY2018 Residential Proplefty Tax IDemolgIraphl'ics and R,esidlential Taxes
52,000,000IIIII 528,600 22 M=33,727
528�380 19,237
$2 5 740(+$19,S)
$25,542 M.
Z3 $1,600,000 52 2,880 176) M WI 51,014,2 69,
"76 522,704
> 51,400,000
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V) 51,200,000
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51"'000,000- jIIJOBEIVE§MMMMMMMWd"'�=.14.3 0
L A $14„190 14.19
$800,000 jIIIRRIMINEMEM511,440(+$,W
511,352 �illillillillillillilliilillillI LexEngtm Exeiyipt arnount IillillillillillillilliilillillI Lelxiligtm
$8,514 Concord $0 Concord'
....................... ....................... .............. .....................................................................................
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$23,380 $28„380
$28.15 2(+$,2',,16,10)
$25,542 525,542
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$25,542 525,542
D 51,600,000 IIIII 525,48 (.+$2,7 7 6
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T� 51,9,,866 $19"866
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200,000
$17,028 $17,028
W $13.9 3 6 1,-52 5 4) 11 Sf,240 1,+$5,0 5 0)
LA 51"'000,000
L A 514J90 514J90
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$11,352 5112,352
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$8,514 Concord $8,514 Co nerd
ReslldenUal Property Taxes Residenti'al Property Taxes
94
Lexington v. Lincoln
IFY2018 Residential Proplefty Tax IDemolgIraphl'ics and R,esidlential Taxes
52,000,000 528,600(4$540) 33,727
$28„060
25 740(+$4816)
525,254
(0iB 5
Z3 $1,600,000 52 2,880(-+$432) 3 0 51,149,169,
"76 522,448,
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642
co 00IIIII 1 7,116,0(+S 324) 515,629
V) 51,200,0
51,6,83,6
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L A 514,030 14.03
$800,000IIIII 5 11A 4,0 2 16)
511,224
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111MININIMEMM5,80(+$162)
$8,418 Lincoln $0 Li nic ol n
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"C� S19,,642 $1,%642
co JIMMINNIMMOMMEMEM 51,73 31(+�$49 5) JIMMINESSOMMOMMEM 518,76 B(+�$1,9 32
V) $1,200,000-
�16,836 $16,836
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L A $14„030 $14„030
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$2000000 , (.100=1111111111111111IIIIIIIIIIIIIIIIIIIIIIIlljlllllllilljllllllllllllllllllllIlljllllllllllllllllllIIIIIIIIIIIIIIIIIIIIIIllilljllllllilljllllllllllllllllllIIIIIIIIIIIIIIIIIIJIMMIIIIIIIIIIIIIIIIIIIIIIIll�34500
, , + 44,,G)
$28„060 $28�060
(+$2�62 IIIII IIIIIIIIIIIIIIIIIIIIIII$3 1 0510(+$5,7916
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$1,200,000
$16,836 $16,836
51,1000,000 (+$50� liimmiiiiiiiiiiiiiiiiillillillillillillilliillillillillillillilliillillillilli111111111111111111111$1,7,2 50(+S,3,2 2 0)
L A $14�030 $14„030
$800,000 1lMMlVNMMMM$1A63lG(-S,594), IIIII 5 1,3.8010(4$2,5 7 6)
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$8,418 Lincoln $8,418 Li nic ol n
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$2,000,000
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"76 $22,448, $22,448,
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$16,836 $1,6,836
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LA 5000 -
L A SK 030 SK 030
$800,000 j��jjjlLjjjljffAV=SllG.088(41,136) (+S4,,167),
511,224 $11,224
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18 Lincoln $8,418 Li nic ol n
ReslidenUal Property Taxes Residenti'al Property Taxes
95
Lexington v. Needham
IFY2018 Residential Proplefty Tax IDemolgIraphl'ics and R,esidlential Taxes
52,000,000IIIII (4$4,840)
523"760 3f.),,9,919
$21,384
Z3 $1,600,000 11��IMMIMFM§§MMMMMMMMMMMMIIIIIIII111522,880(4$3,8721 SSJ 04,8 2 8
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$14"256
L A51"'000,000111 M14� 0 +,$2,4,G
14.3,D
511,880 11.88
$8,0,0,00,G jjIIJMMWMMMMM 51,1.44,0(-+$1,,9 3 6
59,504
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$6,GD,OG,,,G 111MININIMMM5,80(+$IA52) so
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.............
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$23„76,01 $23J60
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$21,384 $21,384
D 51,600,000 52 3.587 1+$45 7 IIIII 111111111111111111111111111111111$.2 5,024 6,016)
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96
Lexington v. Newton
IFY2018 Residential Proplefty Tax IDemolgIraphl'ics and R,esidlential Taxes
52
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ReslidenUal Property Taxes Residenti'al Property Taxes
97
Lexington v. Waltham
IFY2018 Residential Proplefty Tax IDemolgIraphl'ics and R,esidlential Taxes
52,000,000 (4$5,244)
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ReslldenUal Property Taxes Residendal Property Taxe's
98
Lexington v. Wellesl,ey
IFY2018 Residential Proplefty Tax IDemolgIraphl'ics and R,esidlential Taxes
$2 3,900 29,479
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S2'%328 +$7,818)
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521,510 521,510
D 52 5.480 6,316,0 (4$11,663)
"76 51,600,000 $19,,,12D $19,120
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"C� 51,6329 51,6329
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$9,560, 5S,1,560,
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$7,170 w4lilesley w4ltesley
ReslldenUal Property T, sidendal Property Taxe's
99
Lexington v. Mnchester
IFY2018 Residential Proplefty Tax IDemolgIraphl'ics and R,esidlential Taxes
111111111111111111111111111111111111111528,600 6,,5,60)
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$22,04,0 22,8,38
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L A 511,020 11.02'
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$22�04,0 $2 2�040
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$22�040, $2Z040
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$1T632 $17,632
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T� 515,428 515,428
co
1 200,000 11IIIMNLSVMEEEEEM=IIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIII 520,700(.+$7,47 6)
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...............
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$22r040 $22,040
$4,632 +$14,7 96)
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"76 $1T632 $17,632
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T� $15,428 515,428
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$6,612 Winchester $6,612 Winchester
ReslidenUal Property Taxes Residenti'al Property Taxes
100
Lexington v. Woburn
IFY2018 Residential Proplefty Tax IDemolgIraphl'ics and R,esidlential Taxes
52,000,000IIIII 528,600 9,82,D) 33,7 2'7
519,,,'78,D 39,701
517,802
Z3
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"C� SU846 14.1&9
co 00 5 1,7,116,0(+S 5,2 92) $4,322
V) 51,,200,,D
IIIIIIIIIIIIIIIIIIIIIIII1
511,868
(+,K410)
51,"DO0,000 143o
WO
$8,0,0,00,a jj��JMMMMMMMM111111151,1.440(+$3,528)
57,9112
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$19,,780 $19,,'780
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517,802 517,802
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"76 $15,824.
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$13,84,6, S13,846
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511, $11,868
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L A
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s6faD,"O $5,9134 Woburn $5,934 Woburn
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$2,000,000-illimmillillilillillillillillillillillilliillillillillillillillillilillillillillillillillillillilliillillilillillillimmilillillilillillillillillilillillillillillillillillillilliillillillillillillilliIIIIIIIIIIIIIIIII11111111$33,17,60,+�$13,396)
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.11IIImmommimmommmmiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiilllllllllllllllllllIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIS34.632(+$16,B,30�
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51,1 00 000
"76 $15,824 $15,824
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$1
11��IMIIELVMFMMMMM=lllllllIIIIIIIIIIIIIIII��17,784?,+$5,916),200,000- .11IIimillonsLimmomilillillillillilillililljlllllIIIIIIIIIIIIIIII111111111111111111111523,087(.+$11,21,9)
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IIIII
$5,19,34 Woburn Woburn
Reslidendal Property Taxes Residenti'al Property Taxes
101
Appendix: Services, Housing Stress and Emigration
Survey
Survey Executive Summary
A survey of the Lexington community was undertaken to assess key questions for the
Residential Exemption: what portion of the community experiences high stress related to
property taxes, how property taxes and high stress relate to migration decisions, and whether
proposed tax exemptions would benefit members of the community with the greatest need or
the least use of services. This appendix considers survey data just as a source of evidence, and
by itself, does not constitute a comprehensive assessment of residential exemptions.
1,475 individuals (about 7% of the Lexington adult population) responded to the services and
housing stress survey. The survey results provide insights into whether relationships exist
between demographic and tax data variables and two central variables of interest: housing
stress and the forecasted likelihood of leaving Lexington within ten years (migration). While both
of these focal variables describe subjective experiences, the Committee believes the broad
outlines of the results provide insight into residential exemption policy.
Per the Committee's charter, two goals of a residential exemption would be to assist those with
high housing stress (especially when property taxes contribute) or to impact decisions to leave
Lexington. To discuss measurement of possible policies, we use the conceptual framework of
precision and recall.31 Precision is the percentage of those helped by a policy who are in the
class of intended beneficiaries. Recall is the percentage of all intended beneficiaries assisted by
a given policy.
Key Findings:
1. Renters much more often report high housing stress than homeowners.
2. High housing stress is reported at all ages, length of residence, incomes and home
values.
3. Income is a better predictor of high housing stress than is home value.
4. Means tested targeting offers higher precision than the State's Residential Exemption
(SRE), but low recall.
5. Renters are more likely to forecast migration than homeowners.
6. Housing stress significantly drives migration for homeowners.
7. Home value and income are not significant predictors of migration for homeowners.
8. Middle aged populations have the highest forecast of migration.
31 https://en.wikipedia.org/wiki/Precision_and_recall
102
Policy Implications:
1. If rental property owners pass on increased tax burdens from the State's Residential
Exemption (SRE) adoption to renters by increasing rents, it will impact a portion of the
community that reports experiencing high housing stress.
2. The SRE is a blunt (low precision) policy and will benefit many individuals with higher
income or without high housing stress.
3. The SRE would negatively impact middle-aged members of the community who already
have the highest likelihood of migration.
4. A Means-Tested Residential Exemption (MTRE) could offer higher targeting precision,
but would provide low recall as few members of the community who experience high
housing stress would benefit.
5. Survey respondents across all demographic variables voice concern about high property
taxes in Lexington. The open responses reported in this section should be read by policy
makers seeking to address concerns of residents.
The Committee plans to post survey data and data analysis scripts on the Town website in
spring 2019.
1. Overview
As part of our goal to gather information on what property tax challenges community members
face, the Committee undertook to survey Lexington residents. We designed a survey which
would collect information on services, housing stress, and migration plans, as well as
demographic information allowing us to correlate responses. Furthermore, we gathered open
response comments on two topics, although we ultimately decided not to correlate open
responses with other questions because we had not disclosed that intent in advance and sought
to protect individual privacy.
The central areas of concern for the Committee in addressing with this survey were:
Economic and psychological stress: What role does property tax play in resident housing
stress?
Migration: Is there evidence that town tax policy impacts migration? For example, are
individuals experiencing property tax induced psychological or financial stress more likely to
leave Lexington?
Residential Exemption effectiveness: Can we estimate the effect of proposed exemption
alternatives on either psychological stress or migration?
Justifiability based on service use: Can we estimate for proposed exemption alternatives
whether recipients of an exemption are heavier or lesser uses or government programs?
103
Means-tested estimation: Can we estimate the number of qualified individuals for a
means-tested residential exemption, and better characterize how they are differentiated from the
population at large?
As a secondary benefit, we hoped these survey questions would shed insight into resident use
of government services, housing stress, and other subjects which residents could raise through
open responses.
2. Survey Process
The Committee developed and reviewed questions in open sessions. The Committee was
interested in ensuring that respondents would be willing and able to answer survey questions,
and that the survey questions maintained relevance to purpose.
To measure how well the population as a whole would be represented in the survey, the
Committee promoted survey distribution verified by statistical testing. The proposed testing was
to align demographic questions with census responses so one could measure whether the
survey demographics aligned with known quantities about Lexington, such as age or income.
The Committee reviewed the auspices under which the survey should be conducted. We
wanted to avoid asking residents directly whether they would prefer lower taxes (in order to
prevent biasing responses to "yes"), and also to maintain a reasonable level of obscurity about
how responses could be used. Therefore, it was important that the survey not originate solely
from the Committee, yet offer sufficient legitimacy to promote responses.
We sought partnership with other Town committees and departments interested in surveying
Lexington, and found that while other surveys are in process, each one has its own timetable as
well as varying levels of outside resources. Aligning with committees on different timetables was
not feasible as it would delay our research. For the survey, we partnered with the Lexington
Recreation Department which was also interested in how the use of recreation resources
correlated with demographics. As one of our questions was about resource utilization for
affected populations (possible fairness criteria), this partnership aligned well with our mission,
provided additional value to a Town department and offered an additional distribution channel,
creating an overall "Services and Housing Stress" theme for the survey. Moreover, as the
Recreation Department will undertake its own survey in 2019, the results from this survey can
be input for further survey construction.32
Draft questions were piloted with colleagues and friends, particularly outside Lexington. Piloting
provided some feedback and raised some questions for the Committee to address, such as:
What does it mean to receive fire or police services? Is getting directions from a police officer a
service? How about being written a parking or speeding ticket? The Committee left this
ambiguous in the survey.
32 Communication of results to the Recreation Department is occurring separately and is outside the
scope of this report.
104
Did we need to ask marital status? What did this mean for non-traditional family organization?
We decided to drop a question on marital status and replace with size of household.
What was the survey "getting at" in asking about race? Because the survey was themed around
services and stress, race did not strike some pilot respondents as relevant, and while there
could be insight into subcommunities, the Committee determined it was not central to our line of
inquiry and dropped any question on race or ethnicity.
Pilot respondents warned the Committee that intrusive questions unrelated to the theme might
cause survey abandonment. Therefore, each question was carefully weighed for the value it
would provide versus potential survey abandonment. Because sensitive financial questions are
critical to correlation goals, we needed to include some difficult questions. We placed these
questions last so we would collect information from respondents who might submit partially
completed surveys should bias arise.
Because the State Is Residential Exemption is based on assessed value and not economic
means, the Committee had interest in how vacation homes and snowbirding factored into
Lexington residency. Did some members of the community declare residency in Florida for tax
reasons, and what action would they take if their Lexington property were to be charged
materially higher taxes? But the theme of the survey and appropriate length prevented us from
including any question which would provide insight into how residency and multiple-property
ownership operated.
The Committee also discussed the respondent's ability to answer questions. Would a
less-financially aware respondent (perhaps the household member who does not manage
finances) be able to answer questions accurately about market value, assessment, mortgage,
property taxes, or insurance? The State's Residential Exemption is related to assessed value,
but except for the most financially astute tax payers, we expect residents do not know their
current year assessed value. Do residents know their total housing cost? Would some include
cable or water and sewer, while others do not?
Our challenge in surveying these concepts in a clear manner for all residents, led to an
innovation and some simplifications. One innovation was to introduce the concept of"housing
stress" as an intended catch-all for the economic and psychological impact which monthly
housing bills may have on a household. In keeping with our charge to support residents
remaining in their homes, we reasoned inclusion of both more objective factors such as forecast
migration as well as economic and psychological factors such as ease and stress, was
important.
Surveying housing costs is a complex area, and the Committee accepted obvious limitations
beyond a respondent's ability to answer questions. The survey did not ask whether someone
with a high housing payment would continue to have it into the future (Are they near the end of
their mortgage?). Also, the causes of housing costs are unknown (Is debt required to live in the
home, add a new addition, pay college costs, or pay a family member's assisted care?). The
105
survey asks about monthly housing costs, but does not investigate the origin, purpose, future
trajectory, or total liability associated with these costs.
As the Committee was interested in property taxes specifically, we asked what proportion of
housing costs are related to property taxes. Combined with market value of a home and monthly
payments, these questions can give some insight into whether the respondent's housing costs
are materially driven by property taxes.
The Committee considered how to handle respondents who might not have satisfactory
knowledge of core questions around housing payments and household housing stress. The
Committee felt that respondents should state that they are "responsible" for housing costs to be
included in final data analysis about property taxation. Most data analysis excludes respondents
who are not responsible for housing costs in their household.33
Survey Structure
We structured the survey to begin with questions about use of town resources, attempting to set
the tone that this survey was not about property taxes specifically. Section two, on affordability,
started with questions of interest to the recreation department, such as access to financial aid.
The first question central to our Committee's objective was to inquire about housing stress, and
this was followed by an open response question. The open response question thus reveals what
respondents are thinking about when asked about housing stress--before the topic of property
taxes was introduced (although being a town survey, taxes may come to mind easily).
The survey was constructed using Google Forms. We requested that responses only be
submitted by current Lexington residents, but created no residency verification process. We
wanted to maximize response rates, so did not request individuals identify themselves, and
therefore could not prove that each person answered the survey only one time. The final results
were downloaded from Google and processed via Python.
The survey contained the following sections and questions:
Section 1: Town Services
All questions start with this phrasing:
In the past 12 months, has any household member done the following?
These are the question numbers for responses:
Q1. Visited the Community Center
Q2. Used town swimming facilities
Q3. Used town recreational fields or courts
Q4. Used Pine Meadows golf course
Q5. Used a school or neighborhood playground
Q6. Used the Minuteman Bikeway
Q7. Used Lexpress bus
33 No further clarification was provided to respondents about interpreting the term "responsible".
106
Q8. Visited Lexington conservation areas
Q9. Directly received fire or police services
Q10. Attended Lexington public schools
Q11. Participated in any town provided program or service for seniors
Q12. Used Cary library or attended a library event
Q13. Served town government in any capacity (employee, committee member, town meeting
member, elected representative)
[Response options:
All questions in section 1 allowed "Yes", "No" and "N/A" as responses. We provided "N/A" as an
option to allow respondents to explicitly skip questions, but we treated those responses the
same as blank ones.]
Section 2: Affordability
Q1. Are you aware that the Recreation & Community Programs Department offers financial aid
for programs and services?
Q2. Has a household member received this type of financial assistance to participate in a
program or service?
Q3. If your primary residence is rental, please indicate your monthly rental cost:
Q4. If you own your primary residence, please indicate your total monthly housing payment
(mortgage, insurance, property taxes):
Q5. Do you receive a property tax deferral or property tax credit due to limited income?
Q6. What level of stress does your household experience with payment of monthly housing
costs?
Q7. Please elaborate or share any additional thoughts. (open response question)
Q8. Thinking about all the costs of living in your owned property or rental (rent/mortgage, home
maintenance, condo fees, property taxes, insurance, utilities), what portion of these costs do
you estimate is related to property taxes?
Q9. Are you responsible for the housing costs at your residence (i.e. owner or lessee)?
Q10. Are you considering relocating away from Lexington in the next 10 years?
[Response options:
Q3: $0-$1499, $1500-$2999, $3000-$4499, $4500+, N/A
Q4: <$2,000, $29001-$4,000, $41001461000, $61001-$87000, $85001-$1090001 $10,000+1 N/A
Q6: None, Little, Some, Significant, Substantial, N/A
Q7: Open response
Q8: None, Little (1-25%), Some (26-50%), Significant (51%-75%), Substantial (76%-100%), N/A
Q10: Definitely Not, Unlikely, Undecided - Possible, Likely, Definitely, Have not considered, N/A
Others: Yes, No, N/A]
Second 3: Demographics
Q1. Age (respondent)
Q2. Size of household (number of people)
107
Q3. Disabilities within household (check all that apply)
Q4. Length of time living in town (respondent)
Q5. What type of property is your residence?
Q6. Approximate market property value of your Lexington residence (if owned):
Q7. Please indicate your approximate household income in the past 12 months
Q8. Please indicate how the survey was shared with you (any groups or lists or whether it was
forwarded to you.) (open response question)
Q9. Please share any comments to the survey team about this survey. Thank you. (open
response question)
[Response options:
To facilitate consistency between our survey with other population measurement tools, we
chose demographic brackets used in the United States census via American Community
Survey.34 We made some adaptations to better reflect Lexington's local population and to target
demographics of interest to our focus on head of household decision-making. For example, we
combined all age brackets below 30 years old. Similarly, we combined house value brackets
below $500,000 because there are few in Lexington's current housing market. We also split up
the highest ACS bracket ($1,000,000+) into 5 novel brackets because of the abundance of
houses above that threshold in Lexington. These were exceptions, however; most brackets
remained consistent with ACS.
Q1: Under 30 years, 31-39 years, 40-49 years, 50-59 years, 60-69 years, 70-79 years, 80 years
and over, N/A
Q2: 13 23 33 43 5+1 N/A
Q3: Checkboxes presented so multiple section possible: with a hearing difficulty, with a vision
difficulty, with a cognitive difficulty, with an ambulatory difficulty, with a self-care difficulty, with an
independent living difficulty, none of the above, N/A
Q4: Moved in 2015 or later, moved in 2010-2014, moved in 2000-2009, moved in 1990-1999,
moved in 1980-1989, moved in 1979 and earlier, N/A
Q5: Single family home, multi-family home, condominium, apartment, other, N/A
Q6: I don't live in a property owned by a family member, Less than $500,000,
$5003000-$74939993 $7503000-$99999993 $130003000-$132493999, $152503000-$134993999Y
$115003000-$11749,9993 $137503000-$1399939995 $2,000,000 and more, N/A
Q7: Less than $35,000, $353000-$4979999 $501000-$74,9999 $75,000-$9970003
$1001000-$149,9997 $1501000-$199,999, $200,000 and over, N/A
Q8 and Q9 were open response questions.]
3. Survey Respondents
Considering the fact that this survey had zero administrative and distribution costs, the
Committee conservatively hoped for 400 responses. Expecting a relatively small sample, the
34httr)s-://www.censu5.go.v/a.cs/www/data/data-tabIes-and-tools/
108
Committee did not anticipate nuanced results, and emphasized alignment with census
categories for representativeness.
The survey ran over the period October 9, 2018 to November 16, 2018 and netted 1,475
responses. Given the frequent open response comments, one can reasonably interpret that
respondents were eager to provide their opinions on local taxes and this was an important
survey. Numerous respondents thanked the surveyors for providing an opportunity for them to
comment about property taxes and services in Lexington.
During the short period the survey was open, the Committee planned to track distribution
channels to ensure broad reach among Lexington residents. We asked each respondent where
they heard about the survey, giving us an idea of the primary distribution channels. However, as
this was an open response question, the answers contained numerous variations with respect to
each distribution path. Advice to future survey designers might be to provide a selection for
consistency. This Committee did not select that option because distribution channels were not
preplanned in detail, and we anticipated residents would share the survey link among
themselves as well.
A few noteworthy adaptations helped ensure widespread distribution:
1. The survey URL was changed to have a town government URL. (Some respondents
were put off by unofficial looking URLs, which is not surprising given recent privacy
concerns and fake sites.)
2. Posting the survey on the town website provided assurance that it was official.
3. Department distributions (Recreation and Social Services) appeared to respondents as
more credible.
One limitation was that the survey never identified which part of the town governance structure
had initiated the survey nor the specific purpose for which it would be used. Some residents
expressed discomfort or skipped the survey due to vague authority.
109
The most frequent reported sources for survey receipt were:
email: email, lex rec, forwarded, email from 214
town, town email, email from lexington human
services, email list, email from the town, via
email, from lex rec, lexington recreation
facebook: facebook, lexington mavens, 57
mavens
lexington list, lexington listserv, lexington 38
email list, lex list
lexington at home 9
lexfun 9
We summed common responses and not the long tail of isolated responses, so these numbers
are all undercounted slightly.
The responses to this question informed us that no single distribution channel dominated.
The question asking whether a respondent has served in town government in any capacity was
placed to monitor whether those serving in town government survey would be overrepresented
in the responses, in which case it could be argued that political elites are surveying themselves
rather than the wider community. The percentage of responses affirming a household member
serving in town government was 17%, which reflects the high level of town participation in
Lexington but perhaps some over-representation. However, with this modest figure, the
Committee feels the survey does represent Lexington in total, rather than principally the views
of those in Town Meeting or other committee positions.
We took response representativeness seriously, looking at both the fraction of the Lexington
population represented and the distributional similarity to demographic census data. Lexington's
population is about 31,394 residents, and it's 30+ population is 66% of this figure or 20,720. Of
1,475 responses to our survey, 1,469 were from the 30+ population, or about 7% of the target
population. Looking at how representative of the population this 7% sample was, we can look at
six demographic questions and compare with known data about the population.
110
Age Representation (Q1)
The following table compares the proportion of survey responses providing age, with age 30+
with the corresponding Census proportion for 30+ year old residents:
6. min 111P �11=n I
Age 30-39* 9.2% 12%
Age 40-49 29.0% 26%
Age 50-59 24.3% 24%
Age 60-69 16.8% 17%
Age 70-79 14.2% 11%
Age 80+ 6.5% 11%
Total Respondents 30+ 11351
*Age 31-39 survey
Census Source: 0-lexinglan-ma/
The figures from the housing survey are comparable. The most noteworthy difference is that the
80+ year old population is under-sampled in our survey, relative to the Census proportion.
Household Size Representation (Q2)
The table below shows the proportion of survey respondents reporting household size:
8.3%
2 27.4%
3 17.4%
4 34.4%
5+ 12.5%
Total Respondents 1,363
Reporting Size
Average Survey 3.2*
Household Size
*We assume 5+ has average of 5.2 to construct this average size.
Census data indicates the average persons per household is 2.8
( : / iOdexingjgn-ma/ (2017 ACS census). Our
larger average survey household size may be due to under-sampling of age 80+ years.
Residency Representation (Q4)
We have not correlated the length of time in Lexington with Census responses
0-lexingign-ma/ (2017 ACS census),
although it would be possible.
Home Value Representation (Q6)
Respondents were asked for their home value. Some may have interpreted this as market value
and others as assessed value. We believe market values may be 10-20% higher than assessed
values.
We have not gauged representation formally here, although the frequency distribution of
responses shows that all segments of home value have representation.
Income Representation (Q7)
The following table compares survey responses for income with the 2017 Census:
< $503000 7.5% 17%
$50,000-$99,999 16% 13%
$100,000-$199,999 35% 29%
$200,000+ 41% 40%
Survey Respondents 13154
reporting income
Source:h s.-Il l census a
=t
This table suggests the survey under-represents the portion of the community with incomes
below $50,000.
112
Rent versus Own
Own Rent
M 0ount.............I
Own
0
Rent
)nly includes respondents,responsible for housing casts.
0 260 460 6,60 800 1000 1260
Response Count
1,339 respondents responsible for housing costs provided data from which to infer whether they
rent or own. For survey responses, if monthly rental cost was provided, the observation was
recorded as "rent". If the monthly rental cost was not provided, and the market value of the
home was provided, the observation was recorded as "own". If both fields were blank, then the
respondent was not coded with either. The survey suggests 7% of respondents rent and 93% of
respondents own.
ACS census data 0-lexiggign-ma/) reports
that 19% of Lexington housing units are renter occupied. However, this is not equivalent to the
percentage of population living in rental versus owner units, nor the percentage of the adult
population which is being surveyed. It does suggest that the survey under-represents renters to
some extent.
Error Corrections
Twenty-nine respondents indicated housing costs in excess of$10,001/month and yet had
homes valued at under$1.5 million. These cases were re-coded as "Response Error" since it
appeared that the respondent had interpreted the question as annually. For respondents with
higher valued homes, this response seemed plausible and so those data were not re-coded.
113
Grouping Responses
For some analyses, grouping responses is helpful to see larger patterns. After preliminary
analysis, we grouped some responses to the following questions for some analyses:
Housing Stress: Grouped into Low Stress, Medium Stress, High Stress
Market Value: Lowest two categories combined into one
Income: Lowest categories combined
Age: Youngest two and oldest two categories combined, separately
Monthly Rent: Highest categories combined
Relocation: Grouped into Likely, Unlikely, and Neutral
Principal Responses
Because some respondents did not answer every question, we had a choice of imputing
missing data or excluding observations which were missing any one key variable.
The Committee elected to only include data in correlation analyses where the respondent was
responsible for housing costs. With this constraint, correlation analyses include all observations
where both relevant variables were provided. These analyses are split into owners and renters,
since these two populations had largely divergent responses.
1,390 respondents answered affirmatively they were responsible for housing costs. These 1,390
observations are the maximum set of observations used to formulate the correlation charts.
However, for statistical analyses, only 914 respondents provided an answer to all key variables,
and therefore those analyses only used the observations with all variables. No imputation was
performed.
4. Comparative Charts and Correlation Analysis on Housing Stress
and Migration
Renters and Owners
The State's Residential Exemption is an owner-occupied exemption, designed to provide
benefits to owners. It has been adopted in cities and resort towns, in both cases shifting tax
burden from (often voting) resident owners to non-resident owners. For vacation homes,
non-resident owners absorb a tax increase, while for rentals an owner may attempt to pass
through the rental increase to renters.
In analyzing the full impact of a State Residential Exemption would have for Lexington, the
Committee included both owners and renters. Stereotypically, renters have lower asset levels
than owners, and one should examine how the State Residential Exemption would impact
renters.
114
4a. Housing Stress in the Survey
A key finding of the survey is that renters express high housing stress more consistently than
owners, at all age and income levels:
High H ui it g Stress Reported
Rent
Own
%=percent within categories owning or renting indicating high stress
A note on interpreting single color horizontal bar charts on stress and migration:
For charts which only display "high housing stress" or "high migration likelihood", we show a
subset of all responses categorized by the y-axis label. The values in these charts reference
the percent of respondents who meet the criteria displayed in the title (in the case above "high
housing stress") for each group. Thus, 58% on the renter bar means 58% of renters report
high housing stress, and the other 42% are not shown in the bar chart. The other 42% is not
shown since it obscures the ready perception of the horizontal bars.
Thus, the percentages shown do not add up to 100% vertically, but instead reference each
category separately adding up with an unshown opposite response to 100% horizontally.
(Chart percentages are reported differently than frequency distribution bar charts where the
percentages add to 100% vertically. A later note on stacked bar charts clarifies the color
schema and grouping for stress and migration.)
115
Housing stress may vary across subclasses of owners, but is less frequent than among renters
in every case. For example, housing stress among owners is higher for those in lower value
homes, but well below the frequency of housing stress among renters:
High Housing stress Reported (Homeowners)
$2,000,000+
$1,750,000-1,999,999
51,500,000-1,74,9,999
$1,250,000-1,491,91,9
99-
E
0
X $1,000,000-1,24,9,999
$7501,000-999,9919
$500,000-749,9919)
$0-499,999
%=percent within categories owning or renting indicating high stress
One explanation is that renters may be stressed knowing that many are not in permanent
situations. It must be incredibly stressful to be paying $3000Imonth in rent and trying to save for
a down payment on a permanent property while housing prices escalate at high rates.
In the context of these results, policy makers considering adopting the State's Residential
Exemption should consider the social effects of potentially transferring a tax burden from owners
to landlords providing housing to renters. Nationally, renters typically have lower total assets
than owners, and the United States policy of subsidizing owners over renters (such as the
federal home interest deductions) has been heavily criticized in recent years.
Housing Stress versus Home Value
Within the class of owner-occupied homes, the State's Residential Exemption is a progressive
tax which shifts tax burden from those with homes below the breakeven point (about $1,150,000
in FY2019 in Lexington) to those above that point. Our survey can help answer whether the
transfer of taxes is shifting from a more burdened to less burdened population.
116
Again, reviewing the relationship between home value and housing stress, we see that housing
stress is more often reported for those in lower valued properties:
Home Value v. Housing Stress(Owners)
� 2.High Stress
$2,000,000+ ZO%a 69°/m 1.Medium Stress 11 3$ o.Low Stress
$1,750,000-1,999,999 38% 49%
17 22
$1,500,000-1,749,999 32% 54%
27 45
�$1,250,000-1,499,999 32% 52%
� 41 66
m
v
E
° o /a 0
1 0/Q 3
�$1,000,000-1,249,999 1
$750,000-999,999 36% 45°Im
14'S 181
$5,00,000-749.499 30°'k' 44%
53 78
$0-499,999 32% 39%,
9 11
knly imclWdes respondents,responsible for housing costs.
A note on interpreting stacked horizontal bar charts on stress and migration:
Colors: colors have been chosen to represent levels of the parameter being measured, in
most cases "housing stress" or"forecast of intent to move". Stress and intent to move were
measured on a five or six point scale, but adjacent categories are grouped so an easily
interpreted using a three color scheme.
Stacked bars: Each row corresponds to the entire number of respondents meeting the criteria
labelled on the left (100%). A colored bar is shown with area proportionate to the respondents
in that category (percent). Below the primary label showing the percent value is an integer
value, representing the actual number of respondents. This actual number can be used to
interpret the significance of the finding, as small counts (<20) have less reliability than higher
number counts.
Interpreting percentages: these charts indicate the frequency with which respondents report a
sentiment of the questioned intensity, which is different from respondent intensity. The
117
language in the report uses the term "frequency" to reference how often respondents
indicated an issue. For example, in the chart above 29% report "high" levels of housing stress.
But while high levels of housing stress are reported more frequently for lower market values,
we cannot conclude that the housing stress is higher than those occupying more expensive
homes, and we can see that in no case do all members of a given category experience high
housing stress.
How can this chart be used to understand proposed residential exemptions?
First, we note that Lexington has a high level of owner-occupancy, and therefore adopting the
State's Residential Exemption would largely transfer tax liability from those who own lower
valued properties to those who own higher valued properties.
Survey responses indicate that 17-29% of homeowners with homes valued at under$1,250,000
report high housing stress. A residential exemption benefitting this all homeowners with houses
valued at or below that point would have a relatively low precision, as three out of four
beneficiaries did not report high housing stress. Such an exemption would be funded by
homeowners with properties above $1,250,000, where 11-16% report high housing stress. While
this is a smaller percentage than the lower value homes group reports, the number of
respondents reporting housing stress remains significant. A transfer of tax burden on to this
population might exacerbate the high housing stress which already exists for some households.
Policy makers should also recognize that the impact of a tax shift could increase the extent of
housing stress among high value property owners more than it provides relief to those with
lower valued properties. A property owner with a $2,000,000 property would experience a
property tax increase approximately double the tax reduction experienced by an owner with a
$600,000 home. The survey does not directly measure how this shift would be experienced by
either group.
118
Housing Stress by Income: Owners
Unlike the State's Residential Exemption, means-tested residential exemptions include an
income criterion to target residents who have demonstrated need. The chart below visualizes
the relationship between income and housing stress of our survey respondents:
Income v. Housing Stress(Owners)
� 2.High Stress
1.Medium Stress
gzoo,000+ 32% Si% o.pow stress
145 250
$150,000-199,939 QQ%Q QQ^/a
67 67
$100,000-149,999 37°fo 44%
76 92
v
E
a
u
C
$75,000-99,999 36% 37%
32 33
$50,000-74,999 27% ¢1%
20 3Q
IN=
16 10
knly includes,respondents responsible for housing casts.
Homeowners with income below $50,000 report housing stress in 52% of responses, almost as
frequently as responses from all renters. The second subset, those with incomes between
$50,000-$74,999 report high housing stress in 32% of responses, a rate more frequent than in
any market value category (see previous chart). Comparing this chart with the prior chart
comparing home value versus housing stress suggests that including an income criterion for a
residential exemption could better target residents with high housing stress than relying on
home value alone.
The Massachusetts Circuit Breaker provides assistance below an income cutoff of$58,000 for
individual and $88,000 for married filers. These charts suggest that Lexington residents below
those income levels report housing stress more frequently than those above those thresholds.
However, at those thresholds only about one in three residents report high housing stress.
High housing stress is reported among Lexington residents at all levels of income, so an income
based cutoff cannot ensure property tax relief to all respondents stressed by monthly housing
costs.
119
Housing Stress by Income: Renters
The State Circuit Breaker and some matching programs offer tax relief to renters. How well does
income correspond to high housing stress for renters?
Income v. Housing Stress (Renters)
2.High Stress
1.Medium Stress
gzoo,000+ 17% o2yrvStress
1 13
$iso 000-155,v55 42% 17%
5 2
aioo 000-iaz?sz 27 0 33%
4 5
gis 000-ss,zss 10% 20%
1 2
$so 000-7a.g5v 17
2
40>9.9991 35% 40/,o
9 1
pnly induldes,respondents,responsible for housing costs.
At first glance, it appears that high housing stress is prevalent for renters across all income
levels. Moreover, except for a single respondent, all responses for renters earning under
$75,000/year indicate high or medium stress. The data suggests housing stress is more
consistently experienced among lower income residents than other residents.
A second observation is that some low-income individuals live in rent-controlled properties and
therefore may have lower housing stress due to controls. This chart does not pull out
respondents with rent controls separately. Our survey did not ask for rent-controlled unit
residency status among renters.
This chart above suggests that creating meaningful means-tested programs for renters may be
difficult, and reminds us that policies which shift tax burden from homeowners to renters may
adversely affect residents frequently reporting housing stress.
120
Housing Stress and Monthly Rent: Renters
Renters may have greater clarity about their overall housing costs, as capital costs, property
taxes, water and sewer, and home maintenance are wrapped into a single rental tax presented
by the property owner from whom they rent. While a renter may not know how property taxes
factor into their monthly rent, they can report monthly rent and housing stress.
Moreover, the State income tax and Circuit Breaker calculations offer financial credits in relation
to rent. For example, the Massachusetts Circuit Breaker compares 25% of a resident's rental
cost to 10% of their income. Ameans-tested exemption could use the same basis, which
suggests the survey should address the relation between monthly rent and housing stress:
Rent v. Housing Stress(Renters)
� 2.High Stress
1.Medium Stress
0.Law Stress
$4,SOO+
]L2% 3$%
1 3
$3,000-4,499
zs% na%
s �
0
$1,500-2,994
39°l0 ll9%
is e
$0-1,499
16% lll"/o
3 2
[?nly includes respondents,responsible for housin costs.
Our data suggest that housing stress levels are high, but fairly consistent across rental levels.
An interesting point of focus is respondents reporting rents below$1,500/month. This group has
pervasive high stress levels, but also is renting at below market rates (unless simply renting a
bedroom in a home--a rental arrangement not distinguished within our survey). This relationship
suggests that households living in affordable housing are frequently reporting high housing
stress. It may be that this lowest tier is immune from property tax burden shift, as residents in
affordable housing are protected by regional rent controls.
121
Housing Stress and Age: Owners
Concern for Lexington's senior population contributes to local interest in residential exemptions.
Further, survey open response comments (below) explicitly mention retirement and fixed income
as factors in relation to property taxes burden. The next chart visualizes the relationship
between age and housing stress:
Age+r. Housing Stress(Owners)
� 2.High Stress
1.Medium Stress
so+ 27% 54°fo p.Low Stress
19 38
70-7e 26°/4 57'Dfo
44 47
60-59 29°/a 57°fo
54 115
of 5-0-59 33% 46%
a 98 136
40-49 36°!o 4590
177 158
30-39 50% 31°k
50 31
p_zq 25% 50%
1 2
Only includes respondents,responsible for housing casts.
Considering both high and medium stress levels, it appears that the ages with most frequent
housing stress are 30-59 year olds. Respondents between ages 60-79 reported less frequent
housing stress, presumably because some households have moved past child care costs,
mortgages and college bills. A small uptick may be occurring around 80+, but with limited
statistical significance and with less frequent high housing stress than 50-59 year olds. The
survey data suggests that housing stress may be experienced at all ages of the population, and
does not provide statistical support for age-based criteria in means-tested residential
exemptions.
122
Housing Stress and Age: Renters
The survey also allowed us to examine the relationship between housing stress and age for
renters:
.Age v. Housing-Stress,(Renters)
2.High Stress
1.Medium Stress,
0.Low Stress
8 2
60-69- 33% 17%
2
50-59
4 31
40-49— 27% 17%
5
3 5
3nly inicluides,responidents,responsible for hous�ing costs.
Renters in all age groups report high housing stress in half or more responses. For the oldest
group, there could be a small decrease in frequency of high stress offset by responses of
medium stress levels."As with owners, our survey data do not support a age criterion for a
means-tested exemption.
35 For this chart, we combined the 70-79 and 80+ age classes into an age 70+ class due to the
infrequent renter responses in this range.
123
Housing Stress and Time in Lexington: Owners
Another criterion used for eligibility in means-tested residential exemptions is length of time in
town. Therefore, we use the survey data to ask about the relationship between time in town and
housing stress:
Tenure V. Housing Stress (Owners)
� 2.High Stress
1.Medium Stress
moped in 2�?15 or later qpo/a 3,���aw stu-ess
56 50
moved in 210110-2014 39"/Q 41g,
102 106
moped in 210100-2009 35% 51%
95 139
a7
L
moped in 1990-1999 36°/p q$g+o
71 96
moved in 1580-1989 23°/q 5$QJo
26 65
moved in 1979 and earlier Zqe/a 57p/a
52 121
pnly includes respondents,responsible for housing cocks.
Survey data suggests that residents who have recently purchased homes in Lexington report
housing stress most frequently. As these residents may have just assumed significant
mortgages along with continuing housing inflation, they may have greater debt burden than
more established residents.
While we do not observe that property taxes are causing this housing stress, we can state that
housing stress survey data does not support a residency requirement typically included in
means-tested residential exemptions.
124
Housing Stress and Time in Lexington: Renters
Similarly, the survey allowed us to examine the relationship between tenure in Lexington and
housing stress for renters:
Tenure v. Housing Stress(Renters)
2.High Stress
1. w§Vgs,e.moved in20 0 Lo15 or later 24% U,
10 7
moved in 210110-2014 24% 14%
3
moved in 2101100-2009 35% 10%
7 2
inovedin 1990-1999 17% 17%
moved in 1980-1969 50% 25%
2 1,
moved in 1979 and earlyer 25%
pnly induldes,respondents,responsible for housing costs.
As with the prior metrics, renters express high housing stress at all lengths of tenure. The one
exception appears to be renters who have lived in Lexington since the 1980s, but this group is
too small to support a statistically significant departure from the larger group of renters.
Housing Stress and Means Testing
A typical Massachusetts means-tested exemption targets aid at residents who meet multiple
criteria: senior age, low income, ten year residency, lower home value, and without "excessive"
assets. Data from the survey can be used to ask whether residents meeting "Sudbury-like"
criteria express high housing stress more frequently than do those who would be disqualified by
one or more of the eligibility criteria. The survey responses only align with those criteria
approximately because the survey thresholds were selected to match common census
125
categories, which differ somewhat from thresholds listed in Sudbury's "Senior Means Tested
Exemption". Furthermore, the survey request information about financial assets, nor does it ask
whether the homeowner's primary residence is in Lexington. The following table describes how
Sudbury's policy thresholds compare to the approximations we have used with regard to the
survey data:
a
Age >= 65 Age >= 60
Circuit breaker income, i.e.: Income <= $75,000
$86,000 joint,
$72,000 head of household,
$57,000 single
10 year residency Tenure since 2005 (13 years)
Assessed home value < $799,600 Assessed home value < $750YO00
No "excessive assets" [None]
Primary residence Sudbury [None]
Concord's experience with a means-tested exemption is that only about a quarter of those
eligible for the State Circuit Breaker received a local exemption. Therefore the survey
approximation includes more residents than would ultimately qualify and may understate
housing stress.
By approximating "Sudbury-like" qualifications from our survey responses, we can compare
those who meet all four criteria above (code=1) to those who did not (code=O) with respect to
housing stress:
36 h t .l 1 i l I
126
In Tested Approx Qualified v. IHousing Stress(Owners)
2.High Stress
1.Medium Stress
0.Low Stress
28% 1 31%
20 22
X
0
0-
34% 49%
383 562
�nly inicluides,respondents responsible for hous�ing costs,
Among owners, those who met the survey means-tested approximation reported high housing
stress 42% of the time, as compared with 17% of those who did not meet all the criteria.
The absolute response counts, however, lead us to a point we will develop further below: a
means-tested residential exemption may have higher precision (42% of those targeted have
high housing stress) than the prior series of charts (e.g. owners' stress with regard to income,
age, home value), while it would have a lower recall (30 respondents reporting high housing
stress met the means-tested criteria compared to a far larger 191 respondents who did not meet
all the criteria). If we had been able to include an asset test as well, one would expect precision
to improve further, while recall would decline.
Precision versus Recall, a Conceptual Framework
As illustrated in the example above, shaping policy parameters forces us to acknowledge and
evaluate trade-offs between reaching all community members who need assistance and not
providing assistance beyond those with need. The concepts of precision and recall help us
examine that trade-off. Precision is the percentage of those helped by a policy who are in the
127
class of intended beneficiaries. Recall is the percentage of all intended beneficiaries assisted by
a given policy.
The stacked bar charts presented above illustrates this inherent trade-off between precision and
recall in the context of high housing stress among survey respondents who either would or
would not qualify for a "Sudbury-like" means tested exemption. We make this evaluation by
considering how each variable relates to housing stress and which portion of the population
would meet the criteria. We imagine which groups would be included or excluded by adjusting
inclusion criteria (e.g. adding an asset test, changing the age threshold).
A technical way to visualize these policy choices is to plot precision-recall curves. Before doing
this, we need to make explicit an assumption this Committee has made about the target
population and our"housing stress" proxy variable.
Assumption: high housing stress is the portion of the population we are trying to target with our
residential exemption policy choice. In the charts above, we assume a purpose of adopting a
residential exemption would be to alleviate housing stress. We do not distinguish among
sources of housing stress (mortgage, maintenance, property taxes) but try to understand
whether those experiencing high housing stress could be assisted with tax relief.
In an ideal scenario, each resident would report accurately and honestly whether they
experience housing stress, and only those actually experiencing housing stress would receive
assistance. But because stress is a subjective concept, typical public policies would use a more
objective proxy and offer assistance in relation to this proxy variable. Thus, we represent a
survey response about housing stress as "ground truth" and the proxy variable in question as a
"classifier" and we evaluate which classifiers provide the best predictors of ground truth.
Precision = percent of beneficiaries who have high housing stress
If 18% of home owners report high housing stress, Lexington could achieve a precision of 18%
simply by offering financial assistance to any random subset of homeowners. The objective of a
residential exemption should be to offer tax relief in a more targeted manner, significantly
improving on an 18% random sample.
Recall = percent of those with high housing stress who are beneficiaries
If Lexington were able to offer tax relief to all residents, then 100% of those with high housing
stress would be addressed. But if a random 10% of residents were selected for tax relief, then
only 10% of high stress residents would receive aid, a recall of 10%. The objective of a
residential exemption should be to offer sufficient recall that residents believe the program is
meaningful and worthwhile in comparison to its implementation cost.
Precision v. Recall Curves
Each of the variables evaluated (home value, income, age, tenure) offer a distinctive trade-off
between precision and recall in identifying those with high housing stress. Considered
separately a policy maker could select a cut-off for each variable and use that cut-off to
determine an optimal trade-off between precision and recall. Comparing these curves is useful
128
in helping policy makers determine which criteria provide the most targeted means to address
housing stress in the community.
Horne Value Priecision-Recall
100%-0
80%-
70%-
0
U
50%-
CL
Le s than$500,000
40% 560,GGG-74 9.9 9,9
750,0001-999,999
LOGO,01001 .1 2 4%9 99
1,2501,01'DO,-1,49 9,9 99
1,51 0,01,001-I,7 49 9 99
.7510
---------------------------------------- GO,an irna
d
-----------------—------------Ir------------
10%_
0 OYC
Recall
Note on Precision-Recall Curves
Each chart shows trade offs between precision and recall for the variable listed in the title of the chart.
Annotated points correspond to survey thresholds which could be used for policy cut-offs. Each potential
cut-off has a separate balance of precision and recall, shown as the plotted point. Dotted lines provide
rough connectors and are not represented by survey questions.
Ideal public policy would be represented by a curve offering high precision and recall simultaneously.
The home value precision-recall curve shows that an exemption policy targeting those with
home values below $500,000 would have a precision of 29% (see corresponding stacked bar
chart above) but the recall (% of high housing stress respondents reached) would be under 5%.
Increasing the home value inclusion threshold to $750,000 greatly increases the reach (recall)
of the program while only slightly diminishing targeting precision. Further increases in the
threshold beyond $750,000 degrade precision such that the program would not be much better
than random sampling of the population. Thus this curve would suggest that the SIRE (which
129
may benefit those up to -$1,200,000) is correctly labelled a blunt instrument, but in fact appears
to be only slightly better than random.
ln,coime Preclsion-Recall
100%-0
Less than$35,,000
35,01001—49,999
%--------
0
U "
5 % I 50,0 GO—7'4,'999
CL
40% ---------
----------------
1001,000—149.999
3 % Y 150.GCO—.195,999
IL--------------------------4
-----------------------
$200,000 and ov
10%_
0 O/C
b% i % 2d% 3d% 46% 56% 6d% 7d% 86% go% iouo/o
Recall
In contrast, the income precision-recall curve is significantly sloped. Here, we see a curve which
offers significantly higher levels of precision at a variety of thresholds. At income levels up to
$50,000 an income exemption would have precision over 50%, such that over half the
beneficiaries have high housing stress. Yet at the $50,000 income threshold only about 15% of
the population in need would be reached. Raising the income inclusion threshold to $75,000
reduces precision to 40% while expanding recall to one-quarter of those in need. While both
precision and recall at either$50,000 or$75,000 income levels might not be as high as one
might desire, use of precision-recall curves quantifiably demonstrates the superiority of income
as an eligibility criterion over house value. These charts demonstrate why a state residential
exemption may be viewed as inferior to a means-tested residential exemption.
130
Other variables we examined produce precision-recall curves which indicate they would make
poor inclusion criteria:
Age Precision-Recall
100%_0
801%_
70,%-
60%-
0
50%-
CL
SO years and oveir
30%- 70-79,years
60-69 years 50-59,years
10-411 years
�.1-39 year
20%--------- ui I er 30 yea
I----------------I----------------Z-
--------------------------- - -------------------------------------I---------
10%_
00Y(
b�o 16% 26% 36% 46% 560% 66% 76% 8,6o/c 96% l00%
Recall
The age precision-recall curve suggests that some age thresholds may in fact perform worse
than random selection (18% precision). Yet, means-tested exemptions often include age criteria
for eligibility.
131
Tenure In Lexington Precision-Recall
100%-0
70%-
C
0
50%-
40%-
30%- moved in 19,79 aind earher
moved in 19�80-1989
moved in,11S,90-1999,
moved in 2000-20,09 moved in 2010-2,0114
moved in, 015 or at
20%------------------------- -----------
------------------ --------------------
--------- -----------I------- ---------- _4
100/0-
0 O/C
O/o % 2 d O/b 3 i 0/b 4, O/b " i 0% 6 d 0% 7 d O/b E3,d 9/b 9dno 100 13/0
Recall
The tenure in Lexington precision-recall curve also suggests that length of time in Lexington
provides no value in classifying residents' high housing stress. Again, means-tested exemptions
often include residential tenure as an eligibility criteria.
132
Housing Stress and Monthly Housing Costs: Owners
Lexington homes range in value from condominiums as low as approximately $500,000 to
single family homes priced as high as $3,000,000. Individual assets vary, as some owners
purchase homes outright while others have substantial mortgages. The survey data can shift
from home value to monthly housing cost, and determine whether housing costs drive perceived
housing stress:
Monthly Housing Cost v., Housing Stress (owners)
2.High Stress
1.Medium stress
$1 o'001+ 26% 58% 0.Low Stress
5 11
8,001—10,000 41% 37%
17 15
0 6,001—8,000 42% 42%
40 40
0
6 4,001—6,000 39% 36%
105 97
2,001—4,000 36% 489'0
16"2 221
<$2,000,/monthi 21% 65%
47 142
)nly induldes,respondents,responsible for housing costs.
It appears that housing stress is similar across a wide range of monthly costs from $2,000 to
$10,000 per month. Among the handful of residents paying more than $10,000 per month,
housing stress may occur less frequently. A caveat is that some individuals in the
$10,000+/month group were excluded from our this examination due to what appeared to be
response errors explained earlier in this appendix, and these individuals registered high stress
more frequently. Among those paying less than $2,000/month in total housing costs, suggesting
no mortgage and modest property taxes, residents less often reported housing stress.
133
Housing Stress and Property Tax Percentage: Owners
One way to look at whether property taxes relate to housing stress is visualizing the relationship
between property tax share of housing costs and housing stress:
Monthly Housing Cost v., Housing Stress(Owners)
2.High Stress,
1.Medium Stress,
D.Low Stress
Substantial(76-10101%) 31% 47%
41 63
Significant(51-75%) 27% 47%
68 118
Q)
Same Q650%) 37% 44%
'1190 225,
nm
0-
Uttle(1-25%). 34% 579'0
82 135
None 100%
5
hnly induldes,respondents,responsible for housing costs.
Among respondents reporting property taxes in excess of one-quarter of their housing costs,
similar high stress levels exist to the general owning population. However, for those for whom
property taxes are less than one-quarter of the monthly housing bill, high housing stress is
reported only 9% of the time, or about one-half the rate for owners in general. This suggests
that homeowners might be less stressed when property taxes are only a small portion rather
than the dominant portion of their housing costs.
4b. Migration in the Survey
The Committee's charge to support residents remaining in their home not only covers stress, but
also whether residents appear"forced out" of Lexington. The survey asked whether the
respondent is considering relocating from Lexington in the next 10 years. Arguably this is a
subjective forecast, and actual migration occurs due to changes in life circumstances (such as
134
employment relocation, marriage, grandchildren, divorce, limited mobility or injury, and death of
a partner) at least as much as due to property tax burden. These questions measure whether
the respondent gives serious thought to leaving Lexington, rather than whether they actually will
move away. Moreover, a decision to migrate by itself might not indicate the respondent feels
"forced out". The sections below examine whether respondents forecast departure in the next
ten years, using the term "migration" in charts for this subjective prediction.
Migration versus Owning and Renting
As we have seen, the largest divide in housing stress is between owning and renting. Given the
transaction costs of home ownership, it should not surprise us to see a divide in migration as
well:
Owning n Renting v Migration
Likely
l eUtr II
Unlikely
Rent
9 %,
0
Own
% 31%
42
hnly iirirludes,respondents,responsible for housling costs.
Perhaps the most surprising aspect of this chart is that one-third of owners indicate intent to
depart Lexington in the next ten years. Given actual migration patterns, which include moves
due to unanticipated circumstances, this figure might seem higher than expected. What is
driving half of Lexington's renters and one-third of it's owners to forecast migration? Is it related
to property taxes?
135
Migration versus Housing Stress
If property tax burden can affect migration, then we should expect to detect a relationship
between monthly housing stress and migration intent. Some individuals with high monthly
housing stress might seek to leave Lexington to reduce housing stress. Alternatively, it is
possible that even residents with lower levels of housing stress might forecast departures of
Lexington to earn a better return on their housing assets. A $10,000 property tax differential
between Lexington and Cambridge, for a similar priced home, could simply tip the scale.
Below is the relationship between housing stress and migration in survey responses:
Housing Stress v. Migration (Owners)
n likely
Neutral
a.Substantial BBBBpflflflflflflflflflflflflflflflflflflflflflflflflflflfl lg/o 2p�� lanl kely
110
3.Significant 2�a 18 0
IIIIRPoP 31
2. omp � pppppppppppppVVuuuuuuuu�
Un,e UUUUUUUUUU'
i0000iill011111f. Qlr seQio
O.None
IIIIIIII 35% 01%
For owners, the survey data shows a strong relationship between monthly housing stress and
whether respondents are considering migration from Lexington. For those experiencing
significant or substantial levels of housing stress, over half are likely to depart Lexington. (We
assume causal direction from housing stress to migration.)
136
Is there a similar relationship between housing stress and migration for renters?
Housing Stress v. migration (Renters)
�ukeiy
I UUJ�JIlllllllllllllllllllllllll�l��������""""'
Substantial0% 3 %
3 5
3.Sign if icant
20% 17%
0) 2.same
31% 31%,
0
Illl�lllllppppllllflflflflaa!
L Litfle
70%
7
0.None 40%,
2
bnly inicluides,respondents,responsible for housing costs.
Discerning a pattern for renters is hindered by the small number of respondents for most level
housing stress. Renters reporting significant housing stress are a sizeable group, however, and
almost two thirds of them are likely to move away. Unlike home owners, renters may have lower
transaction costs in changing housing and are able to migrate in response to service and cost
considerations. It could be that higher migration is typically expected for renters, and rents
respond more quickly to compensate renters for Lexington's relative value in the rental market.
137
Migration versus Home Values: Owners
The SIRE provides relief to owners of lower value homes. Is this group of residents more likely to
migrate?
Home Value v. mligration, (Owners)
UI ke I y
Neutral
$2,000,000+ 33% 33%
Ila lia mm Unlikely
$1,750,000-1,999,999 I��•�, 28% 33%
131 15
$1,5 0 0,0 0 0-1,7 4 9,9 9 9 26% 39%
2 3 34
gob"
$1,250,000-1,499,,999 36% 33%
42"
76
E
0
$1,000,000-1249999 Illlllllllllllllllllllllllllllllll��nnnn�������������nl 36% 30%
107 910
$75,101"0010-9,99999 32% 30%
1219 1122
$510101,0010-749,999
78 5 5
$0-499 36%,999,
110 36%110
Only induldes,respondents,responsible for housing costsi.
The survey data suggests that those living in lower valued homes forecast migration at slightly
lower rates than those with medium or high value homes. If forecast migration rates are lower
for those in low value homes, then survey data suggests raises doubt about whether a
residential exemption protects residents from being forced out of Lexington.
138
Migration versus Income (owners)
On the other hand, a means-tested exemption would use income as a criteria. Are lower income
owners more likely to migrate out of Lexington?
Income v. migration(Owners)
Ll ke I y
Neutral
$20101,000+ 29%, 41% Unlikely
130 '188
$15101,000-199,999 37% 29%,
62 49
$L0101,00o-149,99,9 37% 24%,
77 51
E
0
U
$75,000-99,999 42% 22%
38 20
�� �����
$50,000-74,999
22 15
�ryryryry�
$0-49,999 42% 26%
24 15
pnly induldes,respondents,responsible for housing costs,
The survey data suggests that migration forecast is highest in the $50,000-$74,999 range and
slowly declines with increasing income. While not a strong relationship, a means-tested
exemption reaching up to $75,000 would benefit those in this subgroup. We cannot predict
whether that benefit would change their migration choices.
An interesting exception to the general trend presented in this chart is respondents with income
under$50,000. This group forecasts a lower likelihood of departing. Is it possible that some of
these residents are in affordable housing and unable to realize similar value elsewhere?
Alternatively, do their financial circumstances (including transaction costs associated with
moving) make it difficult to leave, so that rather than being "forced out" they are "locked in"
involuntarily?
139
Migration versus Income (renters)
Means-tested exemptions can provide tax relief to renters based on income. What does the
survey data show about income versus migration forecast for renters?
Income v. Migration(Renters)
Ll key
Neutral
Unlikely
$20101,000+ 18%, 36%
2 4
$15,101,000-1,99,999 25% 81%
$10101,000-149,999 33% 7%
5
E a)
0
U
C
$75,000-99,999
$50,000-74,999 25% 25%,jjj� 3 3
$0-49,999 35% 38%
Pnly incluides,respondents,responsible for housing costs,
It appears that migration likelihood increases with income until $200,000, while the small sample
above $200,000 may elect to continue renting in Lexington--though these sample sizes are
quite small. At the lowest income level, renters may be much less likely to migrate, however. A
review of affordable housing limits ($51,150-$78,900 for households sized 1-5), suggests that
some portion of this group may reside in affordable units with rent control. Beneficial rent control
could support a renter staying in place for a longer time.
140
Migration and Monthly Rent (Renters)
If law income renters forecast migration less frequently, is that pattern repeated when examining
monthly rent?
Rent v. migration(Renters)
NeUtral
Unlikely
$4500. �JJJJlllllllllllliii„�1��111111111111111111
$3 000 3 as9 ������I�I�I�I�I�I�I�I�I�I��I�I�I�I�lilililililllllll�l�l�l
0
,1=00=999 ��UU�Illlllllllllllllllllllllllllllllllllllll�u�����������������������,
33% 9%
Pnly induldes,respondents,responsible for housing costs.
Yes, examining the relationship between rent and migration, we see a dramatic drop in
migration expectations for renters with rents below $1,500/month. Because rents at this rate
would typically be rent controlled (affordable) or only a room in a house," it appears that renters
in affordable housing are more likely to remain in Lexington than those with higher rents. This
finding is particularly interesting because we (earlier)found that housing stress is higher for
those with lower rents.
" One data source identifies the median rent in Lexington at$1,689. However, this seems far
below market rates in general, so it is not dear if that figure is a rent controlled rent.
httns://affordablehousinponli ne.com/housing-searchlMassachusetts/Lexington
141
Migration versus Age: Owners
The Committee examined whether senior citizens are being forced to leave Lexington. Below is
a visualization of age versus forecast migration:
.Age v. Migration, (Owners)
IIIVlllsooisis��, ��
LI ke I y
Neutral
80+_���������� �������� 43% =ate Unli33
47% 24%,
83 42'
60-619— 32%, 29%
67 62
ffs0-59- ��% a9%
III i
40-49- 31% 39%
1,10 135
23, 59
0-29- 25% 75%
1 3
bnly induldes,respondents,responsible for housing costs,
The survey identifies that owners in the range age 50-69 forecast the highest likelihood of
relocating from Lexington. Especially troubling is the 50-59 age category, where about half of
residents indicate high likelihood of leaving Lexington in the next 10 years. For those educating
their children in the public schools, this age group represents those typically with older children
who can expect to complete public school education in the next 10 years. This age cohort is
also planning retirement and determining whether Lexington is a community in which they could
remain through retirement.
As expressed in comments to this Committee (see Public Hearing appendix and survey
open-ended responses below), some community members are frustrated that some residents
would educate their children in the public schools and then quickly leave. This 50-59 cohort is
valuable to keep in town, as they would typically have the financial resources to contribute to
town budgets while they continue to earn income. A poorly designed residential exemption
142
could have the effect of"pushing" this vital age cohort out of Lexington, or ensuring that the half
who are likely to leave will leave. While the SRE is designed to benefit those in smaller homes,
it is unclear whether the 50-59 year old population is living in those homes. Moreover, most
means-tested implementations, like the State Circuit Breaker, have a minimum age of 65 and
offer no benefit to the 50-59 year old respondent. Data from the survey suggests that, if
Lexington has a migration "problem" among homeowners, it is across the 50-69 year age range.
It is possible that neither type of residential exemption would benefit this population of mobile
professionals, and could increase motivation for them to leave Lexington. Further study beyond
this Committee's work may be needed to understand migration motivations for this specific
population.
Migration versus Age: Renters
While renters are more transient than owners, what does the survey data tell us about the
relationship between age and forecast migration?
Age v. Migration (Renters)
rveu tra l
un keY
Am
11111111111yy11111111111111111Yi�
Q so-ss uuuuillllllll �������� 29°0 51/0
`°°y 29% 13%,
,�,�,�,�,�,�,�,q,R,M,R,R,R,R,R,R,R,R,R,R,R,R,4,BMMM,
0.39 ,,,,,,,,,,,,,,, i 35% 15%
bnly induldes,respondents,responsible for housing costs,
143
As with owners, higher forecast rates are seen for renters aged 50-59. High rates of mobility
exist for all ages, except the 70+ age population which shows a decreased intention to leave.
These charts suggest that seniors are not being "forced out" of Lexington, or that those reaching
retirement age assess their financial resources before deciding to remain in Lexington through
old age.
Migration versus Time in Lexington: Owners
Means-tested exemptions often include a residency requirement. What does survey data tell us
about the relationship between residency length and forecast migration?
Time in Lexington v. Migration (Owners)
uuu Ukely
II�II�I"Q'I'I'I'I'I"IGGGGd�I�I�I Neutral
moves In zols or inter 27% 43% Unlikely
38 610
moved in 210110-2019
NHNMHMhhhhh��ll 88� ao r
0
mo�ea in zoos-zoos i4NNNNNNNh Bo r z 2" er
1— movetl in 1990-1999 33 43/ /
mavetl 'in 1980-1989
1"ibkkkkkkkkkkkk!�4 40% 27
46
moved in 1979 antl earlier p� �uuu�uu� q�/ Zg/
59
Only eludes respondents,responsible for housing,costsil.
Not surprisingly, the most recent owners in Lexington forecast the lowest rate of planned
migration. Those who have just arrived plan to stay. Those who entered Lexington between
1990-2009 forecast the highest rates of departure. This may correspond to the age range charts
144
shown earlier and include many residents who may have entered Lexington for education of
their children and are now considering next steps as retirement approaches.
Migration versus Time in Lexington: Renters
How does time in Lexington relate to migration for renters?
Time in Lexington v. Migration (Renters)
Likely
Neutral
moved in 2015 or later- µ7p ���4X�����l�lHl���p�gpp�� 38% 2-1");Unfikely
16
moved in 2101,10-2014 15% 5%
3, 11
moved in 2101010-2009 10% 30%
0
2 6
Epp�llllllllllllllllll
moved in 1990-1999 50% 33%
3, 2
moved in 1980-198,9 150% 25%
moved in 1979and earhier, n������uuuququ„Hu25% 25%
.............................
Pnly induldes,respondents,responsibIle for housing,cositsi.
The majority of renters entering Lexington from 2000-2014 expect to leave Lexington in the next
ten years. In contrast, those who have been living in Lexington for more than twenty years and
are presently renters are more likely to continue living in Lexington--but these long term renters
are an extremely small group.
145
Migration versus Means-Testing
Using survey data, we can examine whether respondents approximately qualified for
"Sudbury-like" means-testing have lower or higher tendency to forecast migration.
Means Tested Approx Quallified v.Migration(Owers)
Likely
NeLdral
Unlikely
40%, 29%,
29 21
X
0
CL
0
34%,
395 365
knly induldes,respondents,responsible for housing costs.
Surprisingly, the small percentage of residents meeting all means-testing eligibility criteria report
migration likelihoods at similar frequencies to those who do not. It is possible that those who
need the most financial assistance have depressed levels of mobility due to their financial
circumstances. This suggests that the impact of a residential exemption may impact
psychological stress more than migration.
146
Migration v. Monthly Housing Cost: Owners
How can the survey provide insight into whether overall monthly housing costs are encouraging
residents to migrate?
Monthly Housing Cost v., Migration (Owners)
Likely
Neutral
$10,001+. Ig 32% Unlikely
6 4
�7IT�TTTTTTTI I�I�I� �IIIIII
8,001,—10,000 29% 29%
112" 112'
0 6,001,—8,000 Iffffl 36% 32%,
U
35 31
0
d 4,001,—6,000 26% 38%
71 1102
2,001,—4,000 39% i8�°h6
<$.2,0010/month 1 1- 35% 31%1� 0' 76 67
pnly inicluides,respondents,responsible for housing costs,
Monthly housing costs around $8,000 appear to be an inflection point, above which residents
are more likely to leave Lexington and below which they are less so. It seems likely that these
values represent mortgages and other costs more than property taxes, given their high levels.
147
Migration versus Property Tax Share
If property tax share is associated with housing stress, is it also predictive of migration.?
Property Tax Share v. mligration, (Owners)
Li ke I y
Neutral
Unlikely
Substantial(76101%-10 )
�������������������ululnlni� 31% 22%
29
rrrrr������fffffffflffflflf���I
SignIficant(51-75%)
31%, 28%
ilnilll lll������llllllllllllllll . 78 70
X
some(26-50%) � 99NYYYIIIyly�ylYlYlYIYIYY�� 37% 29%
1817 148
2
���UUUUUUUUUVUu
Little(1-25%) nnnnnnnnnnnnni, 33%, 9�'
79
� �I
None 40% 40%
2 2
nly induldes,respondents,responsible for housing costs.
The survey data shows a fairly clear relationship between property tax share and frequency with
which respondents indicate they expect to leave Lexington. Among those with under 25% of
housing expenses due to property taxes, about one-quarter likely to leave. At the other end,
those with more than 75% of housing expenses as property taxes indicate fewer than
one-quarter expect to stay in Lexington for ten more years. Since high property tax percentage
is driven by mortgage age or perhaps subjective perception, it is unclear whether public policies
would specifically target residents who have large property tax share of housing costs.
148
5. Correlation Charts
The following charts identify the frequency relationship between independent variables. These
charts provide a picture of Lexington demographics, and those who would be net beneficiaries
or contributors to a residential exemption.
This chart shows the relationship between home value and income, two variables which are
often used as eligibility criteria for a residential exemption:
Market Value v. Incomie (Homeowner, Sury ,ondents) -125
$2,000 01100and rnojre 2 3 2 40
1,7 5 Cl 0 0 0 1,9 99,999 1 1 5 36
1,5 0 0,0 0 0 "1 749,999 2 3 4 12
�������
75,
1,2 5 C1,0 0 0 1,4 99,999 1 3 5 5 13 17
E 0
0 1,0 0(3,0 0 0 1,2 4 9,999 2 5 1A 11 4
750,COD999,999 8 13 30 29
500,COD.-749,999 6 10 16, 35, 44, 32, 21 25
Less than$500 01100 4 5 7 4 4 1 1
CIE
071
CD
(17M
C;
2
U111 CD U111
Ln (D
CD Ln
Income
The gray boxes represent intersections which had no respondents in the survey, such as
owners of$2,000,000 homes with incomes below $75,000. Because the SRE would help those
below a horizontal breakpoint (around $1,200,000), a substantial numbers of respondents with
incomes above $100,000 would be helped by this exemption (dark blue boxes on the right). On
the other hand, a means-tested Residential Exemption would help a subset of those on the left
portion of the chart (a vertical breakpoint), typically around $75,000.
Additional charts examine the subset of these respondents who own single family homes and
condominiums:
149
Market Value v, IIricame (Flameowineirsi),: Property Type s-[ngle famii'ly home 12"0
$2,0 0 0 01100,and moire 2 3 2 40
1,750,000 1,'999,999 5 36,
1,500,000 1,7494999 2 3 4 11
1,250,000 1,499,999 1 3 5 5 13, 15,
>
0 1,000,000 1,249,999 1 5 13, 101
750,000 999,999 8 11 29 28,
500,000 749,999 5 10 15, 24, 33 28, 17' —.20
Less than$500 DUCt 1 2 1 2 1
23
Y
Illy
071
M
CD
CD CO C-70 C-1
CD CP C;
VD
Vill ID Lro
M Ln Cl
CD Ln
Income
The above chart shows market value v. income for single family homes, to be contrasted with a
similar chart below for condominium owners.
Survey respondents with reported home values below $500,000 typically owned condominiums
(lower chart). Additionally, the condominium chart highlights that the largest group of
condominium owners have properties valued between $500,000-$749,999 and are supported
by incomes between $75,000-$149,999. This large cluster of owners would benefit from a SIRE,
as this exemption would benefit nearly 100% of condominium owners--including those earning
over$200,000 income. However, this same group would typically not qualify for inclusion for
typical means-tested exemptions.
150
Market Value v.,, Iticanie (Hameowtiners)., Property Type,condominium
1, 0 0 0 0 "1 249,999
75 0, 0 999,999
0
>
E
0
Ing
500,000 749,999 2 3 .....................
, ,
4,
Less than$500 GDO 4 4 5 3, 2
23
CIE Illy
071
M
CD
CD C;
VD
Vill ID
Ln
CD Ln
Income
How does housing stress relate to these income and home value intersections? For this
calculation, we assigned a value=1 for each respondent with significant or substantial housing
stress, and value=O for lower stress categories. The cells in the chart below show the
percentage of respondents replotting these "high"stress levels:
151
High Housing Stress, Percentage of Respondent's (Homeowners)
$2,000 01100and rmare, 0 11 0 5,
1,Asa,0 0 0 1,9 99,999 0 0 0 17'
1,5 0 CI,0 0 0 "1,749,999 25 33 9
1,2 5 0,0 0 0 1,499,999 33 15 18 11
(D
p 1,0 0 0 C.10 C.1 1,249,999 13, 28 12
-40
..............
I HIM
750,000—999,999 27 24 22, 14, 9
5C.10,0 0 0 749,999 29 181 16, 9 20
Less thorn$500 DUCt 14, 25, 0 0
CIE Illy
M
rID
r-D C-I
C-I C-I C-I VD C;
Vill ID kll��
3 M Ln
r-D Ln
Income
As this chart shows, high housing stress exceeds 25% of respondents for incomes below
$100,000 and approach 50% of respondents incomes below $50,000. However, housing stress
is not uniform for home values, as those with higher income levels do not consistently report
high housing stress at any home value level.
6. Open Responses to Survey
Two open response questions were designed to solicit further information. The first open
response question asked for additional information or elaboration after asking about monthly
housing stress, with no prompting about property taxes. The second question was at the end of
the survey, requesting any additional information respondents wanted to offer. The section
below enumerates the most frequent phrases elicited in response to these questions and
provides samples of comments using these phrases. There are several themes which can be
summarized here:
1. High property taxes. Even for those who value the town services, the most common
resident complaint was that property taxes have increased too fast and are higher than
comparable towns. Concern about high property taxes was a consistent theme across
most comments and keywords.
2. Town services. Some residents appreciate the services received, while others do not feel
they are of sufficiently high quality for the taxes paid.
152
3. Capital projects and school spending. Several residents touched on these factors as
drivers for high property taxes.
4. Future property taxes. Several residents mentioned future projects such as the police
station and the high school, and a few suggested the town prioritize school projects and
not attempt to do more than can be accomplished.
5. "Our" money. A few responses express resentment that town government does not treat
money as their own and spend money too easily.
6. Long term residents. Several respondents lament changes to the character of the town.
7. Fixed income. Numerous respondents indicate that property taxes are too high for those
entering retirement.
8. Rent or utilities. Several respondents are concerned about the cost of rent or utilities.
9. Regret about plans to leave Lexington. Respondents, including some with children in
school, retirees, and multi-generational Lexington families express regret about plans to
leave Lexington.
Resident comments will be published along with survey responses. The comments are in a
separate data file and randomized so they will not correlate with the survey responses and
maintain anonymity. Moreover, the comments were reviewed and edited with these guidelines:
Intent to keep comments intact as much as possible and substitute or redact any portion
which is problematic, maintaining the spirit of openness and avoiding censorship claims.
Specific concerns to review:
* Comments which might lead to identification of a particular person making the
comment. These include: specific age, employer, street name, etc.
* Comments which stereotype others while not contributing to the conversation
constructively.
Where redaction or editing occurred, the specific section was substituted with square brackets
("[ ]"). For example, a year 1964" could become 196[x]" or a specific employer could be
adjusted to "[employer]". The comments reported below are post-redaction.
153
Open Response Statistics and Quotes
The first open response question asked about housing stress, which yielded the following most
frequent bigrams (2-word phrases):
......0
11111110
property taxes 31
property tax 25
affordable housing 14
stay lexington 10
town services 9
taxes high 8
living lexington 7
high school 7
tax burden 7
For each bigram, we share a representative sample of comments:
property tax or property taxes.
"Town really needs to stop spending so much money in order to stop the terrible rise in property
taxes..."
"Other than that the house is too big for two people, property taxes would be second biggest
reason to move."
"I do indeed consider property taxes in Lexington to be prohibitive for seniors and retired
persons."
"Certainly property taxes are high, but we see great value from town services."
"The combination of property taxes and the lack of new, smaller private homes in good
condition, we do not anticipate being able to stay in Lexington."
"Being able to defer property taxes helps me a great deal."
"Property taxes are higher than my mortgage and will be the reason I move out of Lexington"
"We love Lexington but as the kids leave the nest, the fact that property taxes increase and
retirement is getting closer, we are not sure we will choose to stay here due to the high taxes."
154
"...please do not make the property taxes progressive, i.e. a higher percentage for larger homes.
Just stop spending beyond your means. Just like the rest of us have to do."
"My mortgage holder (my mortgage originator sold my loan to [company]) denies my
participation in the town's state-enabled property tax deferral program for an arbitrary, trivial
reason."
"Not eligible for a property tax deferral (age) tax work-off covers only 10% but this becomes a
moral question. These programs are a cruel hoax on senior citizens in town. Why do I have to
work till I die, when others come in educate their children then leave and actually financially
benefit from the capital gains on the sale of their property."
"We have lived in town since 196[x] and will hate to leave. Seniors need a break on property
tax"
"Lexington government's lack of fiscal discipline is driving property tax rates to extreme levels
that will drive senior residents away and block newly established couples from living here."
661 am concerned with the rising property tax rates and the ability of aging residents to pay. This
town is always talking about diversity, but they don't seem to be concerned at all with
socioeconomic diversity."
"We'd really like to stay in retirement but need to find a lower property tax."
"High property tax (injustice) makes it so difficult for me to think of saving for retirement."
"As tax reform and property tax can not be deducted and really Hope town consider lower the
tax rate. use our tax money as their own money."
affordable housing:
"Please consider providing more affordable housing for seniors."
"Our senior citizens and young families need affordable housing. Our seniors do not need
expensive elder care/senior facilities--they need small single story rental options that are TRULY
affordable so they can age in the town they love."
"there needs to be more affordable housing availability for those over 60 Wor retiree's without
children to help to maintain the diversity of our community."
"It is appalling that people are buying houses here and not living in them, using them for tax
shelters, or buying houses and letting people live there to attend the schools. There isn't enough
affordable housing in town, and it impacts our neighborhoods and the makeup of our town."
stay lexin tg on:
"I hope that it helps to allow taxes to be lowered so I can stay in Lexington"
"We can't afford to stay in Lexington like our parents did."
"We won't be able to afford to stay in Lexington when we retire."
"Lexington Town Taxes are prohibitively high! As we age, it is not economically viable for us to
stay in Lexington, a town in which we have rented, and then owned a Town House and now a
155
Single Family home! Town finances need to be managed better before passing the burden to
the Town residents."
"I wish they will be a way ... to stay in Lexington in my home forever once my kids outgrow the
school system .. as an [foreign country] immigrant and US Citizen this is my home and the only
one I can go back when I retire ...due to the political situation of my original country ... I wish I
could financially be able to afford it but even with savings, Lex taxes are crazy high ..."
town services:
"Besides the school system, we don't see strong value for our taxes reflected in other town
services. It is motivating us to move when our kids complete school in this area."
"We are fortunate to have many excellent town services"
"Do not implement a residential exemption that simply shifts the tax burden to other residents.
Cut town services particularly schools to make up for any shortfall created by any residential
exemption."
"We are concerned with the constant capital projects in the town related to town services, fire
station, Cary Hall, DPW garage, community center, in a time where we have and have had
multiple school projects at the same time."
taxes high:
"Property taxes are high, but we do receive a lot of benefits."
"Certainly property taxes are high, but we see great value from town services."
town taxes:
"I do hope the survey will be used to find ways to stop increasing town taxes. People move out
of Lexington because of the taxes, there must be a way to decrease the spending so we don't
have to increase taxes."
"We love living in Lexington and all the town services, community organization and especially
the public schools. We understand that takes money and have no issue with the level of town
taxes. However, for the money we are paying, we are disappointed in what we're hearing so far
of the math program at Harrington Elementary."
living Lexington:
"Cost of living in Lexington is incredibly high, and it's very depressing to watch all the smaller
and more affordable homes in our neighborhood torn down"
"Many people in the town are upset about the rising cost of living in Lexington, particularly the
rising property taxes. Most people are not aware of the 32% increase that is locked in over the
next 10 years based on official Town projections, nor are they aware that this increase does not
include any new taxes to fund the $300 million+ (Town estimate) replacement high school that is
in early planning stages."
"We hope to age in place because we love living in Lexington. However, the taxes may make
that prohibitive."
156
"Taxes make it impossible to retire and stay in lexington. I was born in 195[x] in Lexington and I
am 3rd generation living in Lexington."
I love living in lexington-think it is a great well run town"
high school:
"General concerns about rising taxes and large-scale projects (high school, fire station, new
children's place, etc) and whether all options are being considered"
"Tax burden to Lexington residents is to high. Tax dollars should be spent on the need for an
new high school and cut everywhere else."
"The schools have become so large and overcrowded, there are no opportunities for kids to
participate in any extra-academic/extracurricular activities: 150-200 kids show up to compete for
a spot in a school team with 10 kids. The town needs to do something to discourage this crazy
expansion of the school system."
"Please look for ways to have Lexington a lifetime town, not a move-in with preschool kids,
move out when the kids graduate from high school."
"Lexington needs to control spending and be more diligent regarding capital expenses as most
families move here for schools and re-building the two middle schools and high school should
be the ONLY priority of major projects for the town next ten years."
tax burden:
"The tax burden is significant and becoming more so. Why do we usually seem to choose the
deluxe version when a lesser version is ample, e g. the community center, design for new police
station."
"Some towns such as Cambridge give tax breaks to owner-occupied dwellings, and others have
enough tax base (commercial and industrial firms) to make the tax burden fall more lightly on
homeowners. We live in a neighborhood where as homeowners of a 2 bedroom bungalow we
pay considerably more taxes than the million dollar restaurant across the street."
"Large families move in for the school system, but their local taxes don't pay the extra cost of
putting their children through the schools here. The tax burden gets placed on empty-nesters
and retirees."
Second Open Response Question
At the end of the survey, respondents were asked to share additional comments. These were
the most frequent bigrams:
IIIIIIW
IIIIIIIU Fr
Ilr r T�iiii
nnw
property taxes 58
Property tax 39
157
taxes high 27
real estate 23
estate taxes 18
years ago 13
fixed income 11
tax high 9
property taxes or property
"We pay almost $3700 four times a year for property taxes. Compared to other towns we talk to
friends about they get almost twice the services we do here."
"My husband is dead, and my house is paid off. I'd love to stay in Lex, but I am paying `full
freight' and utilizing few services. I looked to see if there were any deals for my in the area of
property taxes ($18,000). 1 didn't qualify. I'm not Section 8 level. I sold my house"
"It bothers us that property taxes are less in other similarly situated towns with equivalent
services."
"Do have concerns about rising property taxes, especially with new federal tax laws"
"Thinking about retirement. The cost of property taxes will be prohibitive."
"Taxes keep increasing and even when the mortgage payments will be done we will still pay
nearly $1200 per month for property taxes. This becomes an issue as we age and retire"
"My property taxes consume 33% of net income"
"Our property taxes are sky high and keep going up. Our youngest is going to be done with
public school soon and we are talking about moving to a town with lower property tax rates"
"In 2004 my husband and I bought our house in Lexington and our property taxes were $3000 a
year. Now they have almost tripled and we are retired [living on retirement savings] and Social
Security. We really love Lexington and believe in spending for good schools, etc., but it may not
have been smart for us to move here in retirement."
"Too many rental units with children attending public school which makes the school
overcrowded and put stress on higher property taxes"
"After kids are done with Lex public schools, we would consider moving out of town because of
high property taxes. Town is wonderful and provides many great resources but wished there
were a bigger business tax base so that the burden of taxes doesn't come upon residential
property owners."
"My husband is still working at age 7[x] but when he retires I am quite concerned about our
property taxes. We have an adult child with special needs living with us and cannot downsize or
move very easily."
158
"property taxes have >TRI PLED in 15 years. NOT sustainable!"
"Half of my military retirement pay goes to property taxes. I'm retired."
"Our property tax has nearly doubled in the past 5 years and will likely double again once the
new levies, plus the upcoming levy for the new high school, are added. We are seriously
considering moving to another town where the property taxes are more fair and reasonable."
"With our current income and spending, our budget is borderline break even if not in the red,
and ANY increase in housing costs (mainly property taxes, as these are generally the only cost
that goes up every year) digs us further in the hole."
"My property taxes are 1/10th my income. My estimated income tax is also 1/10 my income. By
the time I'm done paying my bills (401 K, retirement, electric, etc.), I end up with $300 to $500 a
month to live on. For everything. The ironic part is that I'm too young for senior discounts (only
6[x]) and I make too much to qualify for low income. I haven't bought any new clothes in
approximately 5 years."
"We have conservation land as a part of our back-yard which we never use. It really hurts to pay
property tax on that area. The property taxes are increasing way too fast than the salary
increase at our workplace!"
"property taxes are too high! runaway spending in the town!"
"Our house is paid, so we don't stress about total costs, but we do stress about rate of increase
in our property taxes."
"The property taxes of$8,000/year for retired couple, former [public employee], is very HIGH!
Our house is 1300 sq ft. One bathroom. Why are these taxes so high?"
"Last spring I ran out of heating oil, the property tax bill pushed out the refill until early summer.
This coming year I will drop my homeowners policy because there is no room left in my budget
with the increases."
"Property tax too high when we are not using school system. We may decide to move to town
with lower property tax"
"The property tax is too high due to substantial special education cost."
"Although I'm entirely eligible for Lexington property tax deferral program, my mortgage holder
refuses to allow my participation owing to legal technicalities in the structure of the program that
the bank says inconveniences them."
"When we moved to Lexington 21 years ago, our property tax was around $4600. Now it's over
$12,000, and still going up faster than inflation. We won't be able to fully retire here."
taxes high or tax high
"Town taxes are too high and spending is questionable, e.g., first fixing the old high school a few
years back for$60M, and now deciding to build a new one for$200M."
159
"The taxes are too high. The town spends money at too high a rate"
"Have adequate financial resources to pay bills. Would rather taxes weren't so high--and don't
like to think about how high they are. But also understand that taxes are necessary for
services."
"lexington has high costs with very little services or amenities that are useful to all. it is not the
same town I grew up in!"
"taxes are so high that I can't keep up with them."
"high taxes--house assessment increase was astronomical"
"My feeling is that the assessment on our house is too high and I feel it was manipulated to
increase the tax bill. Our house is old, small and in poor condition. If the taxes were lower, I
would be able to fix the areas of the house that need to be repaired."
"the taxes are crazy high"
"There have been 9 out of 10 overrides in the past 10 years. Taxes are too high even with the
evaluation on all the McMansions. Negotiations on union contracts is a big problem. Where are
the cost controls?"
"It is costly living in lexington, mainly due to high taxes."
"Taxes are very high, largely because of school spending."
real estate or (real) estate taxes
"Must move out of town due to high real estate taxes (on limited income)."
"Smaller real estate options to "age in Lexington" are few. I grew up in Lexington, graduated
from the school system. My family has been here for 75 years. My view is that Lexington has
focused on replacing small homes with McMansions purchased by people who want the school
system for their children with no intention of making Lexington "home.""
"the real estate taxes keep going up and we are not sure we will be able to continue to live in
this town--the town is spending vast sums of money to replace schools and other public
buildings-- money that the town does not have and wealthier people in town keep voting for
overrides"
"My attitude is that if the people of the town care about education and their kids, they care about
the town in general. I feel this way, even though I have no children. I have taught in the town for
[x] years. The real estate taxes are getting to us, though, as we enter our 70s."
"expensive real estate taxes as Widow choosing to stay in familiar environment!"
160
years ago
"We pay $5700 a month for rent and there are only 2 adults and one high school student. It's
obscene. We moved into this house 6 years ago and the rent was $4200 but it's gone up every
year."
"Our taxes have more than doubled since we've moved here 18 years ago. We're both in our
70's and plan on staying in Lexington, but worry about affording our taxes as the years go by."
"Taxes have been on a steep increase since we moved here 4 years ago, and I believe they will
continue to rise at a steep rate due to town construction on public buildings. It may become
unaffordable in the near future if the town continues to grow/build at this rate."
"Our taxes on an unrenovated, 3 bed, 1 bath, 1200 sq ft cape represent more than 1/3 of our
total housing cost--and this on a house we bought 5 years ago for$500k with a conventional
mortgage and downpayment. The taxes will cause us to move even before we have our child in
school."
"Our high taxes are an issue for many retirees. With new schools, fire and police buildings and
other additional large expenditures happening, we and others are worried that we will be forced
to move to a town with lower taxes. We do not want that to happen to us."
"When we moved to Lexington 21 years ago, our property tax was around $4600. Now it's over
$12,000, and still going up faster than inflation. We won't be able to fully retire here."
fixed income
"I worry that Lexington spends money without any concern for those on fixed incomes e.g.
Purchase and demolition of Armenian School on Pelham."
"Real estate taxes are too high and are making it hard for fixed income retirees to remain in this
community."
"I also have elderly parents living in this town on a fixed income and the taxes we pay here are
outrageous. I only stay in this town because my parents do not want to move and my youngest
has 3 more years of high school."
"Retired, on fixed income. Property taxes are very high. Mortgage is paid off."
"Property taxes are high for those on fixed incomes. Cambridge, for example, provides both a
residential tax credit and an elderly tax credit."
"As seniors raising elementary aged children, we will be forced to move out of town as soon as
they complete their education here. We will not be able to afford staying here on a fixed income.
Even if we could, the housing now available would not be appropriate for aging in place."
"I don't think that all fixed income qualifying residents know that they can defer their RE taxes at
an extremely low interest rate, until their property sells. How can we get this knowledge of this
very generous town benefit to every financially struggling resident who qualifies?"
161
"Once we retire, we are very concerned with our gtrly tax bill of$4,000. Candidly, after 33 years,
we may decide to sell and find a community with Real Estate Taxes in the $6 to $8 K range,
annually. We've loved Lexington but may be to expensive on a fixed income basis."
7. Statistical Analysis of Housing Stress and Predicted Migration
Decisions
Prior analysis sections describe correlations between pairs of key variables with visual
illustrations. While such an approach is easily comprehensible, it is an incomplete
characterization of variables which are driven by multiple variables. Policy makers should be
interested in comparing the strength of contributing factors when multiple are present, as well as
quantifying the change in dependent variables which might be expected with a change in policy.
Statistical analysis offers an approach to estimate these factors.
Two questions merit statistical analysis:
• What contribution does property taxation make to reported housing stress?
• What contribution does property taxation make to self-reported, predicted migration
decisions?
Household stress was surveyed using a categorical response question with five answers of
increasing stress, reflecting an implied ordinal scale. Statistical estimation would best use of one
two approaches:
• Treat household stress as a continuous variable with five point estimates, and use
ordinary least squares (OLS) to predict changes on a continuous scale. This approach
is limited because survey responses are truncated at a minimum and maximum value
but a statistical model fits to a line.
• Use an ordinal logistic model to reflect latent levels of stress with estimated thresholds
which are associated with respondents selecting from five levels. This method allows the
thresholds to exist independently of one another, but has the disadvantage that
confidence interval estimation is more complicated.
We used OLS estimation first, because it easily estimates statistical significance, thereby
allowing less significant variables to be omitted in model iterations. We initially limited response
inclusion to cases where the respondent reported both owning a home and being responsible
for housing costs (1239 of 1475). Of these, 1208 provided answers to the housing stress
question, and 914 answered all statistically relevant questions.38 After selecting appropriate
parameters, we tested our model tested against an ordinal logistic model. The ordinal logistic
model test did not provide insights and is not included here.
38 Imputation of income could add about 100 respondents, but we have not elected to do any imputation.
162
To run analyses using the migration likelihood responses, we recorded the response categories
as follows:
• Definitely Not: 0
• Unlikely: 1
• Have not considered (or) Undecided - Possible: 2
• Likely: 3
• Definitely: 4
We elected to combine two codes which are seemingly neutral into code 2 as neither response
lends itself to being more or less likely than the other, and both belong somewhere in the middle
of this scale. The end result is that the relocation dependent variable is an ordinal variable with
five levels (0-4), with higher levels indicating higher forecast propensity to migrate out of
Lexington.
An OLS model predicting housing stress has a R2=0.2, and seven significant explanatory
variables. With this model, we can estimate the impact of a residential property tax exemption
on housing stress levels as follows: Assume a household has property taxes of$10,000 per
year (roughly a $700,000 assessed value). For a range of monthly housing expenditures
($10003 $1500, ... $4000) imagine that the property tax were reduced by $5000 (50% would be
a very generous tax exemption) and calculate the change in monthly housing costs and property
tax % of monthly housing. Using these changes and the coefficient, estimate what happens to
the level of housing stress. Not surprisingly, the findings indicate that the greatest impact of a
$5000/year property tax reduction will be felt in households having the smallest (prior) monthly
housing expenditures and therefore the greatest (prior) percentage of housing expenditures
related to property taxes. A bit more surprising may be that the model indicates only a modest
adjustment to stress with significant changes in property taxes. However, this modest
relationship may be due to the fact that numerous other factors contribute to housing stress
beyond the effect of property taxes.
IIIIIIU ulllllllll ^^ N ^^ m
V IIIIIIIIIII mni i
III
$11000 -0.40
$21000 -0.23
$37000 -0.18
$43000 -0.15
The model predicting migration forecast has an R2=0.12. While it seems that housing stress is
among main drivers, and there may therefore be a direct and indirect property tax link, the
statistical relationship is weak. We can estimate that a stress change of 1.0 may be related to a
163
0.28 change in the scale for likelihood of moving, but as the 1.0 stress change is not estimated
to occur through tax exemptions, it appears that this study does not find evidence that tax policy
would directly affect migration. (This finding does not mean that tax policy changes have no
effect; it merely means that no significant effect is identified with the data from this survey.)
Because property taxation impacts household stress, and the latter impacts migration decisions,
we have an "endogenous variable" problem which makes estimation of the impact of property
taxation on migration more difficult. We tried using a third model to predict migration likelihood in
which housing stress was excluded from the independent variables, since it may mask direct
relationships between property taxes, household costs, and propensity to move. As the model
overview below describes, the relationship appears largely consistent with the prior models. A
weak model exists for migration likelihood, and a large change in property taxes and housing
costs for an individual could result in a change in propensity to move, but not enough to change
the distribution of responses among this survey's categories.
Only the OLS results are reported here.
Statistical Models
OLS Model for Stress:
--------------------------------------------------------------------
--------------------------------------------------------------------
Model: OLS Adj . R-squared: 0 .200
Dependent Variable: StressCode AIC: 2591. 0511
Date: 2018-11-25 21:39 BIC: 2629.5937
No. Observations: 914 Log-Likelihood: -1287 .5
Df Model: 7 F-statistic: 33.59
Df Residuals : 906 Prob (F-statistic) : 1 .05e-41
R-squared: 0 .206 Scale: 0 . 98833
--------------------------------------------------------------------
Coef. Std.Err. t P> Itl [0 . 025 0. 9751
--------------------------------------------------------------------
Income914 -0 . 0048 0. 0004 -10 .8862 0 . 0000 -0 . 0057 -0. 0039
MarketValue914 -0 . 0460 0. 0094 -4 . 9003 0 . 0000 -0 . 0644 -0. 0276
Age914 -0 . 0136 0. 0036 -3 .7911 0 . 0002 -0 . 0207 -0. 0066
MonthlyHousing914 0 . 1538 0. 0197 7 .7935 0 . 0000 0 . 1151 0. 1926
HouseholdSize914 0 . 1602 0. 0404 3 . 9631 0 . 0001 0 . 0809 0.2396
PropertyTaxShare914 0 . 0080 0. 0016 5 .0903 0 . 0000 0 . 0049 0. 0111
AgeIncome914 -0 . 0001 0. 0000 -2 . 1343 0 . 0331 -0 . 0001 -0. 0000
One 1 . 4879 0. 0377 39.4321 0 . 0000 1 . 4138 1.5619
--------------------------------------------------------------------
Omnibus: 15. 853 Durbin-Watson: 2 . 031
Prob (Omnibus) : 0 . 000 Jarque-Bera (JB) : 10 .355
Skew: 0 . 115 Prob (JB) : 0. 006
Kurtosis : 2 .532 Condition No. : 1729
164
--------------------------------------------------------------------
--------------------------------------------------------------------
* The condition number is large (2e+03) . This might indicate
strong multicollinearity or other numerical problems .
Monthly housing costs, household size, and property tax share all increase
reported housing stress.
Age, income, market value, and age*income all decrease reported housing
stress .
Note: Variables with suffix 914 are mean-adjusted version of the 914
original survey code responses . The new variable is obtained by
subtracting the mean from the original 914 observations to create a new
variable with mean=0 .
OLS Model for Relocation:
------------------------------------------------------------------
------------------------------------------------------------------
Model: OLS Adj . R-squared: 0 .120
Dependent Variable: RelocationStatl AIC: 2671.5200
Date: 2018-11-25 21:49 BIC: 2695. 6091
No. Observations: 914 Log-Likelihood: -1330 .8
Df Model: 4 F-statistic: 32 . 15
Df Residuals : 909 Prob (F-statistic) : 4 .34e-25
R-squared: 0 . 124 Scale: 1 .0828
------------------------------------------------------------------
Coef. Std.Err. t P> JtJ [0 . 025 0. 9751
------------------------------------------------------------------
Age914 0 . 0112 0 .0029 3 . 9053 0 . 0001 0 . 0056 0. 0169
StressCode 0 .2861 0 .0315 9.0718 0 . 0000 0 .2242 0.3479
PropertyTaxShare914 0 . 0052 0 .0016 3 .2042 0 . 0014 0 . 0020 0. 0083
AgeIncome914 0 . 0001 0 .0000 4 . 8003 0 . 0000 0 . 0001 0. 0002
One 1 . 7572 0 .0607 28 . 9288 0 . 0000 1 . 6380 1. 8764
------------------------------------------------------------------
Omnibus: 19.328 Durbin-Watson: 2 . 027
Prob (Omnibus) : 0 . 000 Jarque-Bera (JB) : 10 . 633
Skew: -0 . 017 Prob (JB) : 0. 005
Kurtosis : 2 . 473 Condition No. : 2672
------------------------------------------------------------------
------------------------------------------------------------------
* The condition number is large (3e+03) . This might indicate
strong multicollinearity or other numerical problems .
165
Age, stress, property tax share, and age*incoe are all positively
correlated with forecast of relocation. The overall r^2=0. 12, so the
relationship is fairly weak.
The strongest relationship is between stress and forecast relocation. A
one level increase in stress corresponds roughly to a 0 .3 level increase
in propensity to move.
Property tax share not only directly impacts propensity to move, but also
indirectly affects through its impact on stress.
Therefore we find that property tax burden is related to forecast
relocation, however the effects appear in total to be small and most
impactful on those for whom property taxes constitute the preponderance of
monthly housing costs.
166
OLS Model for Relocation (without using Stress as a predictor):
-------------------------------------------------------------------
-------------------------------------------------------------------
Model: OLS Adj . R-squared: 0. 063
Dependent Variable: RelocationStatl AIC: 2729.8131
Date: 2018-11-25 22 :24 BIC: 2758 .7201
No. Observations : 914 Log-Likelihood: -1358. 9
Df Model: 5 F-statistic: 13.31
Df Residuals : 908 Prob (F-statistic) : 1.53e-12
R-squared: 0 . 068 Scale: 1. 1529
-------------------------------------------------------------------
Coef. Std.Err. t P> JtJ [0 . 025 0 . 9751
-------------------------------------------------------------------
Income914 -0 . 0020 0. 0004 -4 .4257 0 . 0000 -0 . 0028 -0 .0011
Age914 0 . 0047 0. 0034 1.4057 0 . 1601 -0 . 0019 0 .0114
MonthlyHousing914 0 . 0537 0. 0184 2 . 9163 0 . 0036 0 . 0175 0 .0898
PropertyTaxShare914 0 . 0070 0. 0017 4 . 1991 0 . 0000 0 . 0037 0 .0103
AgeIncome914 0 . 0001 0. 0000 4 .3321 0 . 0000 0 . 0001 0 .0002
One 2 . 1881 0. 0407 53.7323 0 . 0000 2 . 1081 2 .2680
-------------------------------------------------------------------
Omnibus: 39. 032 Durbin-Watson: 2 .005
Prob (Omnibus) : 0 . 000 Jarque-Bera (JB) : 17 . 049
Skew: 0 . 041 Prob (JB) : 0 .000
Kurtosis : 2 .336 Condition No. : 1604
-------------------------------------------------------------------
-------------------------------------------------------------------
The condition number is large (2e+03) . This might indicate
strong multicollinearity or other numerical problems .
One may be interested in PropertyTaxS hare, since it is a variable which a residential exemption
might impact. PropertyTaxShare914 is a normalized version of PropertyTaxS hare with this
frequency distribution for the five answers::
-4.811816: 418
-29.811816: 203
20.188184: 189
44.188184: 100
-42.811816: 4
A category jump on this PropertyTaxShare914 scale is therefore about 20 points. So a full
category jump (20) multiplied by the coefficient 20*0.007 = 0.14; so it translates to about 1/6tn
step in the predicted propensity to move scale. This finding is consistent with the impact of
property taxes on stress found in the first relationship. It is a weak relationship with limited
substantive impact.
167
8. Survey Response Summary
This section shows the response frequency for the questions asked in the survey. Each chart
shows the absolute number and percent of respondents selecting each response. The open
response questions are summarized in an earlier portion of this appendix.
Section 1: Town Services
In the past 12 months, has any household member done the following?
Q1. Visited the Community Center
Lexington recently developed a community center at the intersection of Route 2A and
Massachusetts Avenue, with function rooms and multi-generation activities.
Activity ComCenter
oiii/ count
.......................................
Yes
v
c
v
U
O
V
V
Q
No
nl includes respondents,responsible far housing costs.
0 200 400 660 800 lODO
Response Count
Q2. Used town swimming facilities
Lexington has an outdoor complex for swimming and splashing, as well as a beachfront style
pond at the Old Reservoir.
168
Pllkctivity Swim
M Count
Yes-
E
U*)
861
U
No-
Only mcludes,respondents,responsible for hou5iing costs,.
bi 260 460 600 800
Response Count
Q3. Used town recreational fields or courts
Lexington has numerous outdoor fields and tennis courts, some of which are lit for night play.
Activity Field
M Count...................................
Ye's
U
No-
nly induldes,responidpnts rpsRonsiblp for hous�inig costs.
0 100 260 36o 400 500 600 700 96o
Respionse Count
169
Q4. Used Pine Meadows golf course
Lexington owns a public 9-hole golf course near route 128.
Activity Golf
count
Ye,
5 131
No-
119]
Pnly ncludes,respondents,responsible for housing costs.
Response,Count
Q5. Used a school or neighborhood playground
Lexington has neighborhood playgrounds and school playgrounds, both of which are open to
families without children in public schools.
Activity Playground
MM Count
J60
No-
Pnly inicludes,respondents,responsible for housiing costs,.
568
0 100 200 300 Respon�e Counta0 600 700
170
Q6. Used the Minuteman Bikeway
The Minuteman bikeway runs through Lexington from Arlington to Bedford.
Activity Mlnu[emanBikeway
Count
1084
E
No
2)4
3nly�nicludes,respondents responsible for hous�ing costs.
o iao 4 Response Count
eoo 1000
Count
47. Used Lexpress bus
Lexpress is Lexington's local bus service.
Activity Lexpress
count
282
Ul
CL
No-
�nly includes,respondents,responsible for housing costs,.
1036
0 20D 40 Response Count 800 lOD�
171
48. Visited Lexington conservation areas
Lexington prides itself on the large % of land dedicated to conservation.
Activrty Conservation
Count
956
No
�nly mcludes,respondents responsible for housing costs,.
395
0 26o Response Coun'0 t
800 3000
49. Directly received fire or police services
Lexington has 1 police station and 2 fire stations, facilities targeted for capital improvements.
Activity FirePoll<e
count
2ae
a.
ILL
No
kly�ncludes,respondents,responsible for hous�inig costs.
Response,Count
1108
172
410. Attended Lexington public schools
Lexington public schools are a prime reason for residents to move to Lexington--to such an
extent that enrollment has outpaced classroom facilities.
Activity gas
Count
)30
Ln
CL
No-
My inicludes,respondents responsiblp for housinQ costs.
Response Count
58fi
Q11. Participated in any town provided program or service for seniors
Lexington offers a variety of programs and transportation services for seniors.
Activity Senior,
Count
vez 36)
No BJJ
0 30° Response,Count
eoo aao
173
Q12.Used Cary library or attended a library event
Cary Memorial library hosts events and is Lexington's only library at present.
Activity Cary
Count
1218
No. housing cos,ts,.
15J
o Iao aaa � 9oo 1000 1200
espose Count
Q13.Served town government in any capacity (employee, committee member, Town Meeting
Member, elected representative)
Lexington is governed by representative town meeting and has 21 citizens from each of 9
precincts, along with various town committees which include citizens not in town meeting.
Activity Town
Count
Yes
No-
108]
Pnly nidudes,respondents responsible for housing cos,ts,.
o ]oo aoo Response0 laoo
Count
900
174
Section 2: Affordability
41. Are you aware that the Recreation & Community Programs Department offers financial aid
for programs and services?
RecreationAidAware
count
945
113
No-
f
888
0 26o Response Count
Caun[0 �0 B00
Q2. Has a household member received this type of financial assistance to participate in a
program or service?
RecreationAid Receive
Count
Yes
23
cc
cc
No-
12)8
pnly�ndudes,respondents,responsible for hous�inig costs.
o ioo 460 s60 o[ laoo lxoo
Reponse Cou
175
Q3. If your primary residence is rental, please indicate your monthly rental cost:
Monthl Rent
rount
gasoo+
8
83000,-s4499
ONE
81500-2999
43
go-51a99
19
Pnly inicludes,respondents responsible for housiing costs.
0 1a 30 40
Response Count
Q4. If you own your primary residence, please indicate your total monthly housing payment
(mortgage, insurance, property taxes):
MonthlyHous ngCost
rount
s14001+ Zl
S8,001-510.000- 42
N 86.001.86.000 �
o S4,001-86,000 Z83
F 82.401.84.000- 069
<S2,000imanm 229
e;pon;eError- 27
�nly mcludes,respondents responsible for housing costs,.
a 10o Response Count ���
176
As indicated, some $10,001+ responses were re-coded as ResponseError because it was not
conceivable to the Committee how it corresponded to a lower home value. We presume the
respondents interpreted the figure as an annual cost when they saw a figure such as $10,001+.
Q5. Do you receive a property tax deferral or property tax credit due to limited income?
TaxDeferral
M count
.................................
0
Yes j 24
2%
m
L
41
w
W
X
No-
�niy includes respondents responsible for housing costs.
0 200 400 600 800 1000 1200
Response Count
177
Q6. What level of stress does your household experience with payment of monthly housing
costs?
Stress
Count
Substantial �p
SIgnIFl<an[ Zp
Ln
some041
Little-OMEN
None-mom
a 311
bily inicludes,respondents,responsible for hous�ini�costs.
0 100 R spouse Count 00 600
These stress codes were then grouped into high, medium and low for analysis purposes.
178
Stress6and
2.NigM1 stress 290
Medium Stress-
0441
0.Low 5[r 61]
Pnly mcludes,respondents responsible for housing costs.
6 100 2 o Response Cou 500 600 Ok
Q8. Thinking about all the costs of living in your owned property or rental (rent/mortgage, home
maintenance, condo fees, property taxes, insurance, utilities), what portion of these costs do
you estimate is related to property taxes?
PropertyTaxShare
MM Count
Substantial(75 loowo)E
5igniflcan[151-]5°ml
Some(26 i0°/o)Now=
CI
CL
Little 11-25^col 369
None 7
Only includes,respondents,responsible for housing casts.
0 300 26RespanseoCount
a0 500
179
Some respondents criticized the labels which were attached to the %s, even suggesting that
these labels implied taxes should be high. In hindsight, labels should not have been attached to
the percentages.
49. Are you responsible for the housing costs at your residence (i.e. owner or lessee)?
Responsible
ME couln,
13)
LD
cc
Mly iincludes resondents responsible for housing costs.
Response Count
Q10. Are you considering relocating away from Lexington in the next 10 years?
Relocation
Count
Definitery 165
likely 316
Undecided- Possible 'MS
Have not consideretl 33
uniikeiL 316
oermrteiv Not ioo
o ioo Response ca��e aoo
180
We regrouped responses for correlation analysis using a simpler relocation band variable:
Relocation6antl
MM count
O81
CO
ut 6J8
Unlikely pnly inicludes,respondents responsible for housing costs.
416
0 10o 26o
uoo 400 sao
Response C
Second 3: Demographics
Q1. Age (respondent)
Age
eo years and over �
IO years192
60 69 yearsQj
ZZ�
¢ 50-59 years ]AZ%
40-49 years392
31 years124
antler 30 years, b
0 50 100 1650 300 350 400
ResponseC u
181
Q2. Size of household (number of people)
Household5ize
Count
1]0
pnly niduides,re5pondents responsible for housing costs.
469
23]
3]4
113
0 10o 400 Response Count
43. Disabilities within household (check all that apply) Not included
182
Q4. Length of time living in town (respondent)
re�nure
MM count
moved in 2015 o,later
moved in 20110 zo zsz
moved in 2000 20 309
~ moved in 19910-1999216
moved in 15e10 15 126
moves in 1979,and earl 24n
My inicludes respondents,responsible for housing co5ts,.
o so 100
Response Count
Aso Sao
This question was ambiguous for respondents who moved in and out of Lexington multiple
times.
183
Q5. What type of property is your residence?
PropertyType,
MM Count
single family home- 1198
condominium-g2
t' multi-famHy home 20
apartment ap
other- 5
Only inicludes,respondents,responsible for housing costs,.
a 300 400 oe Count
1000 1200
Resp
46. Approximate market property value of your Lexington residence (if owned):
Marke[Value
count
ji
g3,000,000 antl more
46
S1,750,000-81,999,999 4%
89
gl.soo. 9 ooa-p1.]a ,999 �,�
ll,
133
g1.250.000-g1,455,555
a$1,000.000-81,245.955
F O16
g750,000-5999,999 339e
192
g500,000-5I49,999 ism
29
Less than 5500.000 z%
11
Not owned by family 1
1 0
o so 100 1 �se Count
350 400
Respo
184
Q7. Please indicate your approximate household income in the past 12 months
income
$200,000 and ore. Q�Z
sisa,aoo-aisv.99s
81010.000-8149,999 2Z5
a g75,000-g55,000 302
g50,0001-g74,999 �
835,000-899,999 49
Less than g35.000 31
kly includes,respondents,responsible for housing costs,.
0 300 Re26o 36o
a00
sponSe Count
185
Additional charts on frequency distribution of derived variables are significant:
Number of Activities Reported
nctivit count
rount
10
=1 100 1 V,
09
�oQ
a
13%
6%
N1
a so 1Response Count ��o zso
Whether respondent owns or rents
OwnRen[
count
Own
1239
Rent
Pnly mcludes,respondents responsible for housing cos,ts,.
0 20o aoo Response Count
1000 lxoo
186
Number approximately qualified fora means-tested exemption (without asset test)
MeansTes[etlHpproxcount
Ln
Ln
Response Count
187
Appendix: Related Documents
Survey Data and Analysis
Committee Draft Documents contains these files:
• Survey Responses - contains answers to questions except for comments and source of
oiri on Ad&survey: .5u irve :_ flia� Comir it (nes txt:-fmat .Buirvey: Ad&fl imi ona� ComeirrtsjA�sx
y .................. .......
foirimat
• Open Comments File - contains text of comments question, redacted for privacy: Suiry
Comiments (txt foirimat , au irvey. Coimi�imeiiF�Tts�x�s�vfo�iriim�at
• Additional Comments File - contains text of additional comments, redacted for privacy:
it Data W��th Au imeinyted F--��i�6��ds csv-foirimat D)ata Wfth
ve � a Y ------------g-------------(--------- yg.Y", -
f.o ir.Jim.g.
............................ .................
Analysis Files
• Python Jupyter notebooks used to read survey files and generate output- to be linked to
committee website at a future date
Dr. Jonathan Haughton Tax Equilibrium Model
Dr. Haughton's model is based on the Excel spreadsheet of residential assessed values found
at the town website ( ). Subsequently, the Committee
became aware that a few smaller classes of residential property are not included in the
published Lexington spreadsheet, and therefore not in Dr. Haugthon's model. At the Lexington
roundtable discussion, Dr. Haughton presented a 30% cc clawback" based on a simple model, but
this model which is specific to Lexington properties suggests a 28% 66 clawback". (The clawback
is the reduction in tax shift associated with the housing value change caused by the tax shift
through hypothesized market capitalization.)
Committee Draft Documents contains the file .JonathaiNkiau htoiiri Siiimu���a--t���oin�Lex���ina--toin'Taxes,.x���sx.
188
Public Hearings Summary
The Committee held two public hearings which were advertised widely through local digital and
print media.
At both hearings, a Committee presentation to share Committee work to date was followed by
questions and comments from the attendees.
First Public Hearing
Estabrook Hall, Cary Memorial Building
May 29, 2018
The hearing was attended by 21 people.
The Committee's presentation reviewed the Committee's Charge and explained the history, the
mechanics and the effects on property tax of the State's Residential Exemption (SRE).
Community members in attendance asked technical questions, such as who has the authority to
adopt the SRE for Lexington and how trusts would qualify, and whether the SRE provision that
disqualifies non-owner-occupied properties could be overridden.
An attendee suggested hoped-for ways of reducing the overall Town property tax burden such
as having the Town join the State's group Insurance plan (the GIC)39, finding ways to keep
assessments from increasing, or instituting a Town graduated income tax instead of property
tax.
An attendee asked about the effect of an SRE on older residents with fixed incomes who live in
larger homes.
A resident expressed the opinion that there is a good correlation between house value and
income. He supports the adoption of the SRE because those who can afford to pay more should
pay more. People with more expensive houses should pay more than people who own smaller
houses because the people who own smaller houses are more likely to be poor. Losing elders
due to high property taxes that are replaced by young families increases town expenses
because it leads to more kids in the schools.
A long-time resident expressed the worry that she may not be able to afford increasing taxes.
Another senior felt that the SRE wouldn't make much difference for the people she knows and
that the only solution lies with increased state aid to Towns.
A new resident who recently bought a price-controlled apartment testified that she would
welcome the help of the Town's senior property tax exemption and deferral programs but hasn't
lived here long enough to qualify.
39 Lexington has already joined the State's GIC group insurance plan.
189
Second Public Hearing
Estabrook Hall, Cary Memorial Building
December 11, 2018
The second public hearing was attended by 25 people.
The Committee's presentation reviewed the principles of how the SIRE and Means-Tested
residential exemptions (MTRE)work, and introduced the preliminary results of a survey created
by the Committee that was designed to evaluate housing stress as it relates to property value,
income, and out-migration from Lexington. The Committee also shared information learned
through round-table discussions with real estate brokers, economists and housing policy experts
and input from Assessors in towns that employ means-tested exemptions.
Questions and comments were then received from attendees.
A question was asked about how assets qualifying for a means-tested exemption would be
determined and concerns were expressed about inaccurate income and asset reporting by
applicants and that existing means-tested exemptions have inexact rules to define excessive
assets. It was also observed that a large amount of work to determine assets would be required
of the Assessor's office
A question was asked about how many residents are reached by Means Tested Exemptions
followed by an expression of strong concern that only a small number would be reached,
perhaps 1% of population, while the SIRE available today reaches many more people. The
attendee also felt that without questions about assets on the Survey, that an important factor
used by seniors making migration decisions may have been missed. Later, in the Comments
portion of the hearing, the same resident repeated his strong preference for the SIRE because it
covers more people, taxes should be progressive and that he feels that the rich should pay
more. He also expressed concerns about the difficulty of attaining a home rule petition.
An attendee shared the observation that there is a known group of residents who can afford
Lexington taxes but leave town because they prefer to spend that money on other things. He
wanted to know if the Town could do anything to address that.
An attendee asked for examples of the Capitalization Effect, which the Committee had
presented as an effect theorized to reduce and eventually eliminate the tax shift created by the
SIRE.
A person with substantial professional experience in municipal government recommended the
simple Wayland model of means tested exemptions. She indicated that means testing is very
difficult to do, and the applications are very difficult for seniors to fill out.
Two attendees expressed concerns that the needs of older seniors are not the same as those of
younger seniors. One of them was a 93-yr-old Lexington resident who feels that seniors should
not be considered to be a homogenous entity regarding needs. 90 is different from 70.
Widowers lose their spouse's Social Security benefits but house costs remain the same. He also
objected to using a Property Tax Deferral because he doesn't want the town to "be his heir." He
190
wants the full value of his property to go to his children. He added that he has not used the
Town's schools in many years.
A different resident expressed that seniors who feel that, since they don't use the schools they
should pay reduced property tax, should consider that Lexington schools support our high
property values.
A resident expressed the need for means-tested approaches that are more flexible than those
that use the Circuit Breaker's qualification rules. Taking money out of an IRA for medical
expenses made her ineligible for the Circuit Breaker recently and the same disqualification
would occur for Means Tested Exemptions that use the Circuit Breaker criteria.
A resident offered some thoughts on how to interpret survey results. Lower stress levels at
higher ages may indicate that the more stressed residents left when they were younger. He also
expressed that the effect of the SRE on rental rates is uncertain. The resident was also
concerned about the potentially discriminatory aspect of residency time requirements.
A resident who had attended a meeting where the Committee discussed the SRE with
economists and policy experts noted that none of the experts recommended the RE, calling it a
blunt instrument. A condo owner himself, he noted that condo owners have some of the lowest
property values in Lexington but could be very wealthy.
A local developer and former Select Board member concluded the comments portion of the
hearing with a strong call to both identify those who most need help and also to make sure that
everyone pays their fair share. He advocated for the Town's Property Tax Deferral program and
noted that staying in Lexington is a great investment.
191
AGENDA ITEM SUMMARY
LEXINGTON BOARD OF SELECTMEN MEETING
AGENDA ITEM TITLE:
Ad Hoc Crematory Study Committee Update and Proposed Committee Charge Amendment
PRESENTER: ITEM
NUMBER:
S uzie Barry, Crematory Study Ad
Hoc Committee Chair I.3
SUMMARY:
S uzie Barry will update the Board with the Ad Hoc Crematory Study Committee progress to date.
In addition, The Board is being asked to review and approve an amendment to the Ad Hoc Crematory Study
Committee Charge to update the section for Deliverables to reflect delivery of a progress report to the Board of
Selectmen to be once per month from May 2019 until completion of report.
SUGGESTED MOTION:
Move to amend the Ad Hoc Crematory Study Committee Charge Deliverables to reflect the delivery of a
progress report to the Board of Selectmen to be once per month from May 2019 until completion of report.
FOLLOW-UP:
Selectmen's Office
DATE AND APPROXIMATE TIME ON AGENDA:
5/20/2019 8:30 p.m.
ATTACHMENTS:
Description Type
AD HOC CREMATORY STUDY COMMITTEE
Members: The Ad Hoc Crematory Study Committee will have seven(7)voting
members and(1) member from the Board of Selectmen who will act as a
non-voting Chairperson. Membership shall include:
• 4 - Town Meeting/Community Representative
• 1 - Lexington Interfaith Clergy Association member(LICA)
• 1 - Board of Health member
• 1 - Economic Development Advisory Committee Member
Liaisons: While not part of the Committee, the following committees are invited to
recommend anon-voting liaison:
• Capital Expenditures Committee
• Appropriation Committee
Staff Support: Director of Public Works will act as a liaison to this committee.
Appointed by: Board of Selectmen.
Length of Term: Upon completion of all recommendations to the Board of Selectmen in
accordance with the established deliverables schedule as outlined below.
Meeting Times: As determined by the Committee. A minimum of one meeting for the
purpose of soliciting public comment, shall be required.
Committee Goal: To examine public health, public safety, public works, operational,
financial, and quality of life issues associated with locating a crematory at
Westview Cemetery and meeting the needs of deceased Lexington
residents and their families. To assess the following options and provide
the Selectmen with recommendations on:
1) Building a crematory adjacent to or connected to the proposed new
Westview Cemetery Building.
2) Building a crematory on another location on the Westview Cemetery
property.
3) Not building a crematory at this time.
Committee Role: The Ad Hoc Crematory Study Committee's study will include but not be
limited to the following:
1) Review of Applicable Legislation
a. Review of the applicable sections of Massachusetts General
Laws c.114 (Cemeteries and Burials). Review of
Massachusetts Department of Environmental Protection
regulations regarding Crematories.
2) Evaluation of needs:
a. Review of availability of crematory services for residents and
project future cremation needs.
b. Study the economics of death rates for the area.
c. Consider public and private competition in the region and other
communities that maybe engaged in the crematory planning
process.
3) Other Crematories:
a. Review of other crematories proposed, established and
managed by municipalities in Massachusetts.
b. Review of common practices and pricing.
c. Review of operational costs and perform modeling to include:
various sales price &numbers of cremations per year.
4) Building Options:
a. Review siting options at Westview Cemetery.
b. Review parking & gathering space needs.
c. Estimate the cost to build at siting options presented including
size.
5) Operational Feasibility:
a. Review estimated annual operating costs, equipment costs,
labor costs (including possible outsourcing labor costs) and a
program budget.
b. Review estimated Capital replacement costs and timeline of
such.
c. Explore regional grant opportunities that maybe applied for.
6) Environment:
a. Review of independent research on the health, environmental,
and safety risks associated with the operation of a crematory.
b. Review options for using alternative energy sources to reduce
the environmental impacts.
Deliverables: Present a progress report to the Board of Selectmen once per month from
May 2019 until completion of report with-a
�er�a�recommendations addressed to Board of Selectmen on the feasibility
of a Crematory at Westview Cemetery by a date to be determined in an effort
to have information to inform Annual Town Meeting 2019.
Prior to serving as a member of this committee, members are required to:
1. Acknowledge receipt of the Summary of the Conflict of Interest Statute. Further, to
continue to serve on the Committee the member must acknowledge annually receipt of
the Summary of the Conflict of Interest Statute. Said summary will be provided by and
acknowledged to the Town Clerk.
2. Provide evidence to the Town Clerk that the appointee has completed the on-line
training requirement required by the Conflict of Interest statute. Further, to continue to
serve on the Committee, the member must acknowledge every two years completion of
the on-line training requirement.
Reference: Charge adopted by the Selectmen on September 17, 2018
Selectmen designated committee members as Special Municipal Employees on
October 29, 2018
Charge amended by the Selectmen on May a
AGENDA ITEM SUMMARY
LEXINGTON BOARD OF SELECTMEN MEETING
AGENDA ITEM TITLE:
Discussion of Planning Department
PRESENTER: ITEM
NUMBER:
Jim Malloy, Town Manager
I.4
SUMMARY:
As the Board is aware, Julie Mercier resigned her position as the Planning Director this past week. She is the
3rd Planning Director to resign in the past year which raises concerns over the operation of the department and
I'm requesting to have a discussion with the Board to develop potential options.
SUGGESTED MOTION:
FOLLOW-UP:
DATE AND APPROXIMATE TIME ON AGENDA:
5/20/2019 8:35 p.m.
AGENDA ITEM SUMMARY
LEXINGTON BOARD OF SELECTMEN MEETING
AGENDA ITEM TITLE:
Selectmen- Committee Appointment and Reappointments
PRESENTER:TER• ITEM
S
NUMBER:
Doug Luc ente, Chair
I.5
SUMMARY:
Appointments:
2020 Vision
The Board is being asked to appoint Robert Peters as a member of the 2020 Vision Committee representing
the P lam ing B o and fo r a term to expire o n S ep temb er 3 0, 2021. Ethic s training is up to d ate.
Housing Partnership Board
The Board is being asked to appoint Robert Peters as a member of the Housing Partnership Board the
Planning Board for a term to expire on September 30, 2021. Ethics training is up to d ate.
ReaDDointments:
Lexington Housing Assistance Board
The Board is being asked to reappoint the fo llo wing members to a 3 year term ending May 31, 2022:
• Henry Liu
• Robert Burbidge
Their Ethics training is up to date.
SUGGESTED MOTION:
Move to appoint Robert Peters to the 2020 Vision Committee as a member representing the Planning Board
for a term to expire on September 30, 2021.
Move to appoint Robert Peters to the Housing Partnership Board as a member representing the Planning
Board for a term to expire on September 30, 2 021.
Move to reappoint Henry Liu and Robert Burbidge to the Lexington Housing Assistance Board to a term to
expire May 31, 2022 respectively.
FOLLOW-UP:
Selectmen's Office
DATE AND APPROXIMATE TIME ON AGENDA:
5/20/2019 8:50 p.m.
ATTACHMENTS:
Description Type
F) May 2011.9 Cbrynnittee VII.ernt)er I..�l.'.N,)ii.rati.on.s/lZecoryiryiel'idatiori.s for 1.30S Backup MIlateilal
Board of Selectmen
May 2019 Committee Member Expirations/Recommendations
Term Expires Service Start Recommendation
Lexington Housing Assistance Board (LexHAB)
Robert J. Burbidge Vice Chair 3/2011 05/2019 Reappoint
Henry A. Liu 12/2015 05/2019 Reappoint
Wednesday,May 15,2019 Page 1 of 1
AGENDA ITEM SUMMARY
LEXINGTON BOARD OF SELECTMEN MEETING
AGENDA ITEM TITLE:
Discuss Future Meeting Dates
PRESENTER:TER• ITEM
S
NUMBER:
Doug Luc ente, Chair
I.6
SUMMARY:
Review upcoming meeting dates. Discuss possible change to the June 17, 2019 meeting date.
SUGGESTED MOTION:
FOLLOW-UP:
DATE AND APPROXIMATE TIME ON AGENDA:
5/20/2019 8:5 5 p.m.
ATTACHMENTS:
Description Type
BOS Meetings
Through December 2019
05/20/19 Monday 7:00 PM BOS Meeting Selectmen's Meeting Room
06/03/19 Monday 7:00 PM BOS Meeting Selectmen's Meeting Room
06/17/19 Monday 7:00 PM BOS Meeting Selectmen's Meeting Room
07/08/19 Monday 7:00 PM BOS Meeting Selectmen's Meeting Room
07/22/19 Monday 7:00 PM BOS Meeting Selectmen's Meeting Room
08/05/19 Monday7:00 PM BOS Meeting Selectmen's Meeting Room
g
08/19/19 Monday 7:00 PM BOS Meeting Selectmen's Meeting Room
09/09/19 Monday 7:00 PM BOS Meeting Selectmen's Meeting Room
09/23/19 Monday 7:00 PM BOS Meeting Selectmen's Meeting Room
10/07/19 Monday7:00 PM BOS Meeting Selectmen's Meeting Room
g
10/21/19 Monday 7:00 PM BOS Meeting Selectmen's Meeting Room
11/04/19 Monday 7:00 PM BOS Meeting Selectmen's Meeting Room
11/18/19 Monday 7:00 PM BOS Meeting Selectmen's Meeting Room
12/02/19 Monday 7:00 PM BOS Meeting Selectmen's Meeting Room
12/16/19 Monday 7:00 PM BOS Meeting Selectmen's Meeting Room
TBD TBD TBD BOS Goal Setting TBD
TBD TBD TBD Fall Financial Summit TBD
TBD TBD TBD Budget Summit(s) TBD
TBD TBD TBD Joint BOS/SC—Mental Health TBD
TBD TBD TBD Dept. Budget Presentations Selectmen's Meeting Room
TBD TBD TBD 2019 Fall STM Battin Hall, Cary Memorial Building
Page 1 of 1
May 16,2019
AGENDA ITEM SUMMARY
LEXINGTON BOARD OF SELECTMEN MEETING
AGENDA ITEM TITLE:
Discuss Fall Delegation to Antony, France
PRESENTER:TER• ITEM
S
NUMBER:
Doug Luc ente, Chair
I.7
SUMMARY.-
Mayor Jean-Yves S enant o f Antony, F ranc e has invited the Town o f Lexington to s end a delegation to the
Sister City for their"Foire aux Fromages et aux Vins"being held from September 13 to 15, 2019.
Discussion: Delegation Coordinator and Communication Process
SUGGESTED MOTION:
FOLLOW-UP:
DATE AND APPROXIMATE TIME ON AGENDA:
5/20/2019 9:00 P.M.
AGENDA ITEM SUMMARY
LEXINGTON BOARD OF SELECTMEN MEETING
AGENDA ITEM TITLE:
Discuss Initial Request for Race Amity Day Proclamation
PRESENTER:TER• ITEM
S
NUMBER:
Doug Luc ente, Chair
I.8
SUMMARY:
The Human Rights Committee has asked the Board to sign a proclamation that recognizes the second Sunday
in June as Race Amity Day in Lexington.
In 2015, Massachusetts legislature passed a bill signed by Governor Charles D. Baker Jr. proclaiming the
second Sunday in June as "Race Amity Day' annually in the Commonwealth.
The proclamation is to encourage citizens of Lexington to c eleb rate the racial, cultural, and religious diversity
of our community.
SUGGESTED MOTION:
Move to approve and sign the proclamation.
FOLLOW-UP:
Selectmen's Office
DATE AND APPROXIMATE TIME ON AGENDA:
5/20/2019 9:10 P.M.
ATTACHMENTS:
Description Type
J tw
i o „1 t
Town of lexingtoup �Ha,55arbu5ett.5
x
OFFICE OF SELECTMEN
PROCLAMATION
Whereas: the Town of Lexington is comprised of multicultural,multiethnic and multiracial citizens; and,
Whereas: friendship, collegiality, civility,respect, and kindness are commonly shared ideals of the
collective citizenry of the Town of Lexington; and,
Whereas: racism is a barrier to the achievement of a just and peaceful world; and,
Whereas: the United States has made great progress in racial justice in the past century,but still faces many
challenges in the 21 St century; and,
Whereas: starting in 2011,through the efforts of the National Center for Race Amity(NCRA) in
Boston,Massachusetts on the second Sunday in June,the nation began celebrating The
Other Tradition—the history of cross racial, cross cultural friendships that brought
people together to advance equity and social justice; and,
Whereas: the Towards E Pluribus Unum Initiative has invited communities across the United States
of America to join in introspection and reflection on the beauty and richness of the
diverse peoples of this great nation while reaching out with a spirit of amity toward one
another annually on the second Sunday in June; and,
Whereas: in 2015, the Massachusetts legislature passed a bill, signed into law by Governor Charles D.
Baker Jr., making the second Sunday in June always"Race Amity Day" in the Commonwealth of
Massachusetts; and,
NOW, THEREFORE, WE, THE BOARD OF SELECTMEN of the Town of Lexington, Massachusetts do hereby recognize
the second Sunday in June as:
Race Amity Day
and encourages citizens of Lexington to celebrate the racial, cultural, and religious diversity of our community on Sunday,
June 9,2019.
IN WITNESS WHEREOF, we have set our hands and caused the seal of Lexington to be affixed herewith on the 20'of
May 2019.
DOUGLAS M.LUCENTE,CHAIRMAN JOSEPH N.PATO
SUZANNE E.BARRY JILL I.HAI
MARK D.SANDEEN
AGENDA ITEM SUMMARY
LEXINGTON BOARD OF SELECTMEN MEETING
AGENDA ITEM TITLE:
Approve and Sign Proclamations
PRESENTER:TER• ITEM
S
NUMBER:
Doug Luc ente, Chair
C.1
SUMMARY:
Immigrant Heritage Month(IHM)
The Board is being asked to approve and sign a proclamation recognizing the month of June as Immigrant
Heritage Month. The sixth-annual Immigrant Heritage Month(IHM) celebrates our country's immigrant
heritage and acknowledges the stories of individuals, families and communities who have contributed to the
unique fabric of our nation.
Lexington Goes Purple Days
The Board is being asked to approve and sign a proclamation declaring June 8-9, 2019 as "Lexington Goes
Purple Days" to raise awareness and honor those facing A lzheimer's disease and other forms of dementia.
SUGGESTED MOTION:
Move to approve the consent.
FOLLOW-UP:
Selectmen's Office
DATE AND APPROXIMATE TIME ON AGENDA:
5/20/2019
ATTACHMENTS:
Description Type
F) 2019 It-firnigrant Heritage.mon.th.Proclarnation. Backup VII.atetial
F) 20191 i,��xin.gtlon Cbes Purple flays l."roclarnation. Backup Vll.aateli.Aal
J tw jl
AP
Tobin of I�xin ton g
a
AN&Er
OFFICE OF SELECTMEN
PROCLAMATION
Whereas: generations of immigrants from every corner of the globe have built our country's
economy and created the unique character of our nation; and
Whereas: immigrants continue to grow businesses, innovate, strengthen our economy, and
create American jobs in Lexington, Massachusetts; and
Whereas: immigrants have provided the United States with unique social and cultural
influence, fundamentally enriching the extraordinary character of our nation; and
Whereas: immigrants have been tireless leaders not only in securing their own rights and
access to equal opportunity, but have also campaigned to create a fairer and more
just society for all Americans; and
Whereas: despite these countless contributions, the role of immigrants in building and
enriching our nation has frequently been overlooked and undervalued throughout
our history and continuing to the present day.
NOW, THEREFORE, WE, THE BOARD OF SELECTMEN of the Town of Lexington,n
Massachusetts, do hereby proclaim the month of June 2019 as
ImmigrantHeritage Month
in the Town of Lexington and call upon all citizens to join us in celebrating our country's
immigrant heritage - stories of individuals, families and communities who have contributed to
the unique social fabric of a country whose greatness is fueled by its diversity.
IN WITNESS WHEREOF, we have set our hands and caused the seal of Lexington to be affixed
herewith on the 20th of May 2019.
DOUGLAS M.LUCENTE,CHAIRMAN JOSEPH N.PATO
SUZANNE E.BARRY JILL I.HAI
MARK D.SANDEEN
1„ Town of lextngton, 1a.5.5arbU.5ett.5
OFFICE OF SELECTMEN
PROCLAMATION
Whereas: Alzheimer's is the most costly disease in the United States, and is the sixth-leading cause
of death in the United States, and more than 5.8 million Americans of all ages have
Alzheimer's disease; and
Whereas: the Alzheimer's Association is marking June as Alzheimer's and Brain Awareness Month
and June 21 st as The Longest Day(a sunrise-to-sunset event to honor the strength,heart
and endurance of those facing Alzheimer's disease); and
Whereas: on and around the summer solstice,the longest day of the year,thousands of people from
around the world will do what they love in order to raise awareness and funds in honor of
those facing Alzheimer's; and
Whereas: on June 8, 2019 and June 9, 2019, Lexington residents will join volunteers around the
world boosting awareness of Alzheimer's disease and other forms of dementia, and
fundraising for a cure. Lexington residents, in partnership with the Human Services
Department and Cary Memorial Library, will be doing what they love:
• Learning about the latest research
• Participating in mobile phone based citizen science project to advance research
• Learning about services and support for partners and caregivers
• Promenading their pooches
• Playing bridge and
• Creating a multigenerational dementia coloring book
NOW, THEREFORE, WE, THE BOARD OF SELECTMEN of the Town of Lexington, Massachusetts, do
hereby proclaim Saturday,June 8, 2019 and Sunday, June 9, 2019 as:
Lexin ton Goes Pur le Daysg �
in the Town of Lexington and urge all citizens to join in to learn more about Alzheimer's disease,to
support the individuals living with Alzheimer's and to become part of the effort to combat this disease.
IN WITNESS WHEREOF, we have set our hands and caused the seal of Lexington to be affixed herewith
on the 20'day of May.
DOUGLAS M.LUCENTE,CHAIRMAN JOSEPH N.PATO
SUZANNE E.BARRY JILL I.HAI
MARK D.SANDEEN
AGENDA ITEM SUMMARY
LEXINGTON BOARD OF SELECTMEN MEETING
AGENDA ITEM TITLE:
Water and Sewer Commitments
PRESENTER:TER• ITEM
S
NUMBER:
Doug Luc ente, Chair
C.2
SUMMARY:
Water and S ewer C ommitment S ection 1 F Y 2019 $ 119491983.97
Water and S ewer C o mmitment S ection 2 F Y 2019 $ 1,912,043.03
SUGGESTED MOTION:
Motion to approve the above Water and Sewer Section 1 & 2 Commitments
FOLLOW-UP:
Treasurer/Collector
DATE AND APPROXIMATE TIME ON AGENDA:
5/20/2019
ATTACHMENTS:
Description Type
Depa,rtment, of Public Works
17750 Town of Lexington
Water and Sewer Enterprise Funds
FISCAL YEAR. 2019
AP2111 W
IN
COMMITMENT SP0 1119 SECTION I GRAND TOTALS
WATER $723,854.14 $7231,854.,14
SEWER $192201,818.55 $1 2201818.55
ADMIN $5,1311.28 $5�311.28
TOTAL- $1)949,,983.97 $1�94919983.97
To the Collector of Revenue for the Town of Lexington;
You are hereby uthorized and required to levy and, collect of the persons named
in the list of water/s,ewer, charges herewith committed to you and each one of his/her
respective portion herein set down of the, sum total of such list. Said sum being:
one miffflon, nine hu nine and nine hundredeighty three d'bCCars andg7lioo
And pay the same into,the treasury of the Town of Lexington
and to exercise the powers conferred by law in regard thereto.
DIRECT& OF PUBLIC WORKS BOARD OF SELECTMEN 05 2 0/1 9
reasurer/Collector, Director of' Public Works,Water/Sewer Billing
Department Public Forks
I Town, Lexington
il. -
......
Water and Sewer Enterprise Funds
ISC I "YEAS 2019
IN(
COMMITMENT GRAND TOTALS
I
TOTAL_: $111293. $1, 2$ . 3
To the Collector r f Revenue for the Town of Lexington-.
You are hereby authorized andrequired to levy and collect of the persons,named
in the list of water/sewer charges herewith ith mm tte to you and each one of his/her
r
respective portion on r in set down of the sum total of such list. Said surer being:
one iwfifion, 'tuine hun.dredtweNe thausartdfartythree a s a 31100
And pear the some into the treasury the Town of Lexington
and to exercise the powers n rr d by low in regard thereto.
I
�w
DIRECTOR OF PUBLIC WORKS B ARD OF SELECTMEN 5/ 1
Treasure r Co lector, Director of Public Works,Water/Sewer Billing
AGENDA ITEM SUMMARY
LEXINGTON BOARD OF SELECTMEN MEETING
AGENDA ITEM TITLE:
Approve Minutes
PRESENTER:TER• ITEM
S
NUMBER:
Doug Luc ente, Chair
C.3
SUMMARY:
The minutes of the fo llo wing meeting dates are ready for your review and approval:
• April 3, 2019
• April 8, 2019
• April 10, 2019
SUGGESTED MOTION:
Move to approve the minutes of:
• April 3, 2019
• April 8, 2019
• April 10, 2019
FOLLOW-UP:
Selectmen's Office
DATE AND APPROXIMATE TIME ON AGENDA:
5/20/2019
ATTACHMENTS:
Description Type
D Minutes Apiil 10,201.9 Rackup Material
Page 1 of 6
Selectmen's Meeting
April 3, 2019
A meeting of the Lexington Board of Selectmen was called to order at 6:00 p.m. on Wednesday,
April 3, 2019 in the Selectmen's Meeting Room of the Town Office Building. Ms. Barry, Chair;
Mr. Pato; Mr. Lucente; Ms. Hai and Mr. Sandeen were present as well as Mr. Malloy, Town
Manager; Ms. Axtell, Assistant Town Manager and Ms. Katzenback, Executive Clerk.
2019 Annual Town Meeting
Mr. Lucente submitted the Ad Hoc Crematory Study Committee Interim Report to the Board.
He explained the report contains an Executive Summary, the Committee Charge, background on
current Westview Cemetery Building, Westview Cemetery Building options, cremation process,
cremation regulation, market trends, and the committee's next steps.
The Board was in agreement that the Ad Hoc Crematory Study Committee Interim Report can be
released to Town Meeting.
• Article Discussion/Positions
Possible Reconsideration—Article 39: Amend Zoning Bylaw—Limited Site Plan Review
(Citizen Petition)
Ms. Colburn, School Committee, explained the School Committee plans to move for
reconsideration of Article 39 on Monday, April 8, 2019 in order to offer the following
amendment: Notwithstanding any other provision of this chapter, the use of land or structures for
educational purposes by the Lexington Public Schools on land owned or leased by the Town of
Lexington or Lexington Public Schools shall not be subject to site plan review pursuant to § 9.5.
She stated that Article 39 was intended to require limited site plan review for building projects
by private schools, religious institutions and daycare centers, in order to afford abutters a small
degree of notice and opportunity for comment, where before there had been none. The School
Committee learned only after the close of debate that, in fact, the article would also require
Lexington Public School projects to undergo site plan review by the Planning Board which
would add time and expense to school projects that already benefit from extensive public
process.
Ms. Hai asked for clarification regarding the abutter notification used for School Building
projects. Ms. Colburn explained direct abutters get notice of both abutter and community
meetings and neighbors beyond the abutters get notice of the community meetings.
Mr. Pato suggested that the School Committee consider having every School building project
notify abutters, not just the Massachusetts School Building Authority(MSBA) projects.
Ms. Barry suggested that a standard radius be set for abutter identification for the School
Building Projects.
Page 2of6
Mr. Sandeen stated that he would be concerned about the message the Town would send if the
Town exempted itself from complying with requirements it imposed on commercial developers.
Ms. Barry read following statement submitted via email by Jeanne Krieger, the proponent of
Article 39: "When I proposed Limited Site Plan Review 1 had not thought about the impacts of
including Lexington Public Schools, but now I'm glad that 1 have had the opportunity to consider
the implications. School construction projects are subject to considerable public process.
Preparing for limited site plan review should not be a significant burden but would lend
consistency and transparency. Abutters of public school projects should be treated to the same
consideration as abutters of private school projects, namely review by the elected Planning
Board. Minuteman Vocational School has already scheduled a hearing before the Planning
Board for review of their recreational facility."
Mr. Kanter, Capital Expenditures Committee, stated he hopes the Board will support the School
Committee's proposed amendment.
The Selectmen reviewed their positions, no edits were made. The position chart is appended to
these minutes.
Ms. Barry, with consensus of the Board, amended the order of the agenda to allow time for Ms.
Battite, Recreation Director, to arrive for the discussion on Article 27:Appropriate for
Authorized Capital Improvements
Approve and Sign Memorandum of Understanding— 186 Bedford Street
Mr. Malloy reviewed the updated Memorandum of Understanding for 186 Bedford Street.
Upon motion duly made and seconded, the Board of Selection voted 5-0 to approve the
Memorandum of Understanding between the Town of Lexington and 186 Bedford Street, LLC
for the 186 Bedford Street, Lexington property.
Solar RFP
Mr. Malloy stated the Solar Request for Proposal was issued and Ameresco was the sole bidder.
Mr. Malloy said Cadmus, the Town's consultant, will come in front of the Board at a future
meeting to present an update about this project.
Ms. Barry returned to agenda item 2019 Annual Town Meeting, Discussion—Article 27:
Appropriate for Authorized Capital Improvements
2019 Annual Town Meeting: Discussion—Article 27: Appropriate for Authorized Capital
Improvements
Ms. Battite reported that the Recreation Committee does not intend to seek additional funding
under Article 27 for the Center Track Project. Ms. Battite said the Recreation Committee voted
4-1, at their meeting earlier this evening, to choose the contract with the Base Bid+ ad alternate
zero (extended warranty contract) for a synthetic turf for the Center Track project.
Page 3of6
Mr. Malloy explained that if the Board is agreement with the Recreation Committee's
recommendation, then Article 27 could be indefinitely postponed.
Mr. Lucente stated he feels the hybrid field solution is a better choice over synthetic turf.
The Board said it would like additional time before Article 27 is taken up at Town Meeting in
order to take a position. Mr. Malloy said the Board could ask the Moderator to move Article 27
to a date certain to be taken up next week.
Steve McKenna, Lexington High School Assistant Track Coach/Precinct 6 Town Meeting
Member, expressed concerns regarding synthetic turf fields.
Tim Clackson, Lexington United Soccer Club, stated he feels maximization of field usage and
playability should be major factors for the decision of surface selection for the Center Track.
Tom Shiple, 18 Phinney Road, stated he feels the Center Track needs a surface that can
withstand the large demand for playing time.
Shane Faria, Lexington High School Outdoor Track Assistant Coach, expressed concerns
regarding synthetic turf fields.
Aleia Gisolfi-McCready, Lexington High School Student, expressed concerns regarding
synthetic turf fields.
Michael Gupta, Lexington High School student, expressed concerns regarding synthetic turf
fields.
Adjourn
Upon motion duly made and seconded, the Board of Selection voted 5-0 to adjourn at 7:24 p.m.
A true record; Attest:
Kim Katzenback
Executive Clerk
Page 4 of 6
ARTICLE POSITIONS
2019 ANNUAL TOWN MEETING
ARTICLES IP C SB JP DL JH MS
Financial Articles
Reduce Community Preservation Act(CPA) Surcharge Rate From 3% To
4 1% Pursuant To G.L. C. 44b, § 16 (Citizen Article) IP Y Y Y Y Y
5 Establish Qualifications For Tax Deferrals Y Y Y Y Y
6 Appropriate For Cremation Facility At Westview Cemetery(Citizen Article) N Y A N Y
Appropriate Funds For The Creation Of A Lexington Economic
7 Development Strategy(Citizen Article) IP Y Y Y Y Y
8 Funding For Sustainabilit Actions Citizen Article IP Y Y Y Y Y
9 Sustainabilit Director Citizen Article IP Y Y Y Y Y
10 Appropriate To Post Employment Insurance Liability Fund R Y Y Y Y
11 Appropriate FY2020 Operating Budget Y Y Y Y Y
12 1 Appropriate FY2020 Enterprise Funds Budgets. Y Y Y Y Y
13 Establish And Continue Departmental Revolving Funds Y Y Y Y Y
14 Appropriate The FY2020 Community Preservation Committee Operating
Budget And CPA Projects
a) Conservation Land Acquisition-TBD Y Y Y Y Y
b)Willard's Woods Site Improvements- $138,273 Y Y Y Y W
c)Archives & Records Management/Records Conservation &
Preservation- $20,000 C Y Y Y Y Y
d Battle Green Master Plan- Phase 3- $253,394 Y Y Y Y Y
e 9 Oakland Street- Renovation and Adaptive Re-Use-$70,000 Y Y Y Y Y
f)Athletic Field Complex at Minuteman Regional Vocational Technical
School -TBD IP Y Y Y Y Y
g) Old Reservoir Bathhouse Renovation - $6207000 Y Y Y Y W
h) Park Improvements- Hard Court Resurfacing- $70,000 Y Y Y Y Y
i) Park Improvements-Athletic Fields-$435,000 (subject to reduction if(f)
is fully funded) Y Y Y Y Y
j) Playground Replacement Program- Bridge- $302,000 Y Y Y Y Y
k) LexHAB- Preservation, Rehabilitation, and Restoration of Affordable
Housing- $99,700 Y Y Y Y Y
1) CPA Debt Service- $3,094,680 C Y Y Y Y Y
m)Administrative Budget- $150,000 C Y Y Y Y Y
15 Appropriate For Recreation Capital Projects Y Y Y Y Y
16 Appropriate For Municipal Capital Projects And Equipment
a) Hydrant Replacement Program C Y Y Y Y Y
b) Storm Drainage Improvements and NPDES compliance Y Y Y Y Y
c) Comprehensive Watershed Stormwater Management Study and
Implementation Y Y Y Y Y
d Townwide Culvert Replacement C Y Y Y Y Y
e Center Streetscape Improvements - Construction Y Y Y Y Y
Page 5of6
ARTICLES IP C SB JP DL JH MS
f)Automatic Meter Reading System Y Y Y Y Y
g) Sidewalk Improvements Y Y Y Y Y
h) Hill Street New Sidewalk Project Y Y Y Y Y
i) Equipment Replacement Y Y Y Y Y
j)Townwide Signalization Improvements C Y Y Y Y Y
k) Street Improvements C Y Y Y Y Y
1)Transportation Mitigation C Y Y Y Y Y
m) Municipal Technology Improvement Program Y Y Y Y Y
n)Application Implementation Y Y Y Y Y
o) Network Core Equipment Replacement Y Y Y Y Y
p) EV Charging Stations Y Y Y Y Y
17 Appropriate For Water System Improvements Y Y Y Y Y
18 Appropriate For Wastewater System Improvements C Y Y Y Y Y
19 Appropriate For School Capital Projects And Equipment Y Y Y Y Y
20 Appropriate For Public Facilities Capital Projects
a) Public Facilities Bid Documents C Y Y Y Y Y
b) Facility and Site Improvements: C Y Y Y Y Y
• Building Flooring Program Y Y Y Y Y
• School Paving & Sidewalks Program Y Y Y Y Y
c) Municipal Building Envelopes and Systems C Y Y Y Y Y
d School Building Envelopes and Systems C Y Y Y Y Y
e LHS Field House Track Resurfacing Y Y Y Y Y
f Public Facilities Mechanical/Electrical System Replacements C Y Y Y Y Y
Westview Cemetery Facility Construction Y N Y Y W
h) Cary Library Children's Room Renovation Design Y Y Y Y Y
21 Rescind Prior Borrowing Authorizations C Y Y Y Y Y
Establish, Dissolve And Appropriate To And From Specified Stabilization
22 Funds. Y Y Y Y Y
23 Appropriate To General Stabilization Fund. IP C Y Y Y Y Y
24 Appropriate From Debt Service Stabilization Fund C Y Y Y Y Y
25 Appropriate For Prior Years' Unpaid Bills. IP C Y Y Y Y Y
26 Amend FY2019 Operating, Enterprise And CPA Budgets Y Y Y Y Y
27 Appropriate For Authorized Capital Improvements IP W W W W W
General Articles
28 Confirm Street Acceptance And Title (Portion Of Pelham Road) Y Y Y Y Y
29 Civil Service Withdrawal R Y Y Y Y
30 Amend Town Bylaws-Reduce/Ban Polystyrene Materials (Citizen Article) Y Y Y Y Y
Amend Town Bylaws To Reduce/Ban Single-Use Plastic Beverage Straws
31 And Stirrers (Citizen Article) Y Y Y Y Y
Addition Of Capital Expenditures Committee-Related Provisions To The
32 Representative Town Meeting And Selectmen-Town Manager Y Y Y Y Y
33 Rename "Board Of Selectmen"To "Select Board" Y Y Y Y Y
34 Rename "Board Of Selectmen"To "Select Board"-General Bylaw Y Y Y Y Y
Page 6 of 6
ARTICLES IP C SB JP DL JH MS
35 Amend Article III Of Chapter 118 (Citizen Article) Y Y Y Y Y
Implement An Outcomes-Based Approach To Town Building
36 Projects Citizen Article Y Y Y Y Y
Zoning Articles
37 Rename "Board Of Selectmen"To "Select Board"-Zoning Bylaw Y Y Y Y Y
38 Amend Zoning Bylaw And Zoning Map, 186 Bedford Street (Owner Petition) Y Y Y Y W
39 Amend Zoning Bylaw-Limited Site Plan Review (Citizen Article) . . Y Y Y Y Y
Page 1 of 4
Selectmen's Meeting
April 8, 2019
A meeting of the Lexington Board of Selectmen was called to order at 5:46 p.m. on Wednesday,
April 8, 2019 in the Selectmen's Meeting Room of the Town Office Building. Ms. Barry, Chair;
Mr. Pato; Mr. Lucente; Ms. Hai and Mr. Sandeen were present as well as Mr. Malloy, Town
Manager; Ms. Axtell, Assistant Town Manager and Ms. Katzenback, Executive Clerk.
Selectmen Concerns and Liaison Reports
Mr. Pato stated the Residential Exemption Study Committee has concluded their work and would
like to present their report an upcoming Selectmen's meeting.
Mr. Sandeen said he attended the climate resiliency session hosted by Minuteman Advisory
Group Interlocal Council (MAGIC).
Town Manager Six Month Update
Mr. Malloy reported on his first six months as Lexington Town Manager summarizing some of
the items he has worked on. In addition, he commented on several areas to be addressed such as
consolidating Selectmen meetings, development of comprehensive fiscal policies and
strengthening succession planning.
Mr. Malloy stated he intends to work with the Board of Selectmen and others in the Community
over the next few months to develop new processes that will enhance the level of information
that the Town Officials and residents have, especially as it pertain to Town Meeting, but also to
their processes.
Portion of Pelham Road Acceptance— Order of Taking
Mr. Malloy explained that the Order of Taking will be postponed to a future Selectmen's
meeting after the vote for a correction of a technical reference has taken place at Annual 2019
Town Meeting for Article 28.
Lions Club Request—New Date for Fireworks Display at 2019 Carnival
Mr. Lucente recused himself as he is a member of the Lion's Club of Lexington.
Ms. Barry said the Board previously approved the Lion's Club request for the Annual Carnival
which included a fireworks display to be held on July 3, 2019 subject to approval of the fireworks
vendor. The fireworks vendor has since informed the Lion's Club that they were not available for
that date. The Lion's Club of Lexington now requests to hold the Fireworks Display on Friday,
July 5, 2019.
Upon motion duly made and seconded, the Board of Selection voted 4-0 to approve a fireworks
display on Friday July 5, 2019, at approximately 9:30 p.m., subject to approval of the necessary
safety precautions required by the Fire Department
Page 2 of 4
Selectmen Committee Appointment
Upon motion duly made and seconded, the Board of Selection voted 5-0 to appoint Judith Moore
to the Registrar of Voters for a term to expire March 31, 2022.
Review Integrated Building
Policy
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Mr. Malloy gave an overview of the proposed Integrated Building Design and Construction
Policy. He said this proposed policy has been initially reviewed by a representation from each
the following groups: Permanent Building Committee, Sustainable Lexington, School
Committee and administration, Selectmen and Town Staff. Mr. Malloy said additional feedback
will be sought and once refined, this policy it will be presented to the Board at a future meeting
for review and approval.
2019 Annual Town Meeting
• Article Discussion/Positions
Article 6 - Appropriate for Cremation Facility at Westview Cemetery(Citizen Article).
Ms. Axtel explained the proponent of this citizen article will propose Indefinite Postponement of
Article 6. The Board was unanimously in favor to the indefinite postponement of this Article.
Article 27 - Appropriate for Authorized Capital Improvements.
Visitors Center
Mr. Malloy explained the Visitor Center bids came in over the approved appropriation amount
due to current construction climate. Mr. Malloy said the recommendation would be to use 2019
ATM Article 27 to request an increase to the debt authorization if the Board would like to
continue to move the Visitors Center project forward at this time without going back out to bid.
Center Track Field
Mr. DeAngelis, Recreation Committee Chair, explained the Recreation Committee evaluated all
options at length for the Center Track Field project while taking into consideration all comments
including health concerns and budgetary concerns. He stated the Recreation Committee voted
4-1 to proceed with the Center Track project using synthetic turf with an add option of an
extended warranty. Therefore, the Recreation Committee is not asking for any additional funds
at 2019 Annual Town Meeting.
Steve McKenna, Lexington High School Assistant Track Coach/Precinct 6 Town Meeting
Member, expressed concern regarding synthetic turf field may lessen availability for use for
certain Track and Field events.
Tom Shiple, 18 Phinney Road, commended Town Staff and the Recreation Committee for the
extensive evaluation and deliberation during the process of choosing the surface for the Center
Track project.
James Law, Lexington High School Track and Field Coach, expressed concern synthetic turf will
lessen practice time for certain Track and Field events.
Page 3 of 4
Tim Clackson, 14 Winthrop Road, Director of Lexington United Soccer Club, stated he feels the
playability of the fields is an important consideration.
Brendan Caracino, Lexington High School Student, expressed concern synthetic turf will lessen
availability for use for certain Track and Field events.
Micah Benson, Lexington High School Student, expressed concern synthetic turf field will lessen
availability for use for certain Track and Field events.
Stacey Hamilton, President of Lexington United Soccer Club, stated the Center Track project
plan may have looked at alternatives
Michael Gupta, Lexington High School Student, expressed concerns regarding synthetic turf
fields.
Evan Eberle, Lexington High School Student, expressed concern regarding synthetic turf fields.
John Nephew, Lexington High School Javelin Coach, expressed concern synthetic turf field will
lessen availability for use for certain Track and Field events.
Matthew Koss, 35 Robinson Road, Board Member of Lexington United Soccer Club, said he
feels there is not sufficient information to choose a hybrid field option for recreational purposes.
Juno Daciuk, Lexington High School Student, expressed concern synthetic turf field will lessen
availability for practice time and use for certain Track and Field events.
Aleia Gisolfi-McCready, Lexington High School Student, expressed concern regarding synthetic
turf fields.
Lisa Rhodes, Recreation Committee Vice-Chair, explained there has been efforts to provide
alternate accommodations for certain field events.
The Board agreed they would not bring a motion for Article 27 regarding an appropriation for
the Center track field to Town Meeting.
The Board reviewed their positions and the resulting chart is appended to these minutes.
Consent Agenda
• Approve and Sign Proclamation- Minuteman Cane
Upon motion duly made and seconded, the Board of Selectmen voted 5-0 to approve and sign a
proclamation for the Minuteman Cane Award to be presented on Patriots' Day, Monday, April
15, 2019.
• 2019 Outstanding Youth of Lexington Award—Paola Kefallinos
Upon motion duly made and seconded, the Board of Selectmen voted 5-0 to sign commendation
letter for the 2019 Outstanding Youth of Lexington Award to be presented on Patriots' Day,
Monday, April 15, 2019.
Page 4of4
Adjourn
Upon motion duly made and seconded, the Board of Selection voted 5-0 to adjourn at 7:14 p.m.
A true record; Attest:
Kim Katzenback
Executive Clerk
Page 1 of 4
Selectmen's Meeting
April 10, 2019
A meeting of the Lexington Board of Selectmen was called to order at 6:00 p.m. on Wednesday,
April 10, 2019 in the Selectmen's Meeting Room of the Town Office Building. Ms. Barry,
Chair; Mr. Pato; Mr. Lucente; Ms. Hai and Mr. Sandeen were present as well as Mr. Malloy,
Town Manager; Ms. Axtell, Assistant Town Manager and Ms. Katzenback, Executive Clerk.
Selectmen Concerns and Liaison Reports
Ms. Hai said the Special Permit Residential Development Ad Hoc Committee will host public
outreach sessions on Tuesday morning April 23, 2019 and Thursday evening April 25, 2019 at
the Samuel Hadley Public Services Building, 201 Bedford Street.
Mr. Sandeen said the Town of Concord cited Lexington as their inspiration for pursing net zero
schools.
Ms. Barry clarified that she reported during her remarks at Town Meeting on April 8, 2019 the
vote of the Board regarding 2019 ATM Article 20 G as 4-1, however, following the discussion
on the floor of Town Meeting, Mr. Sandeen changed his position and the voted recorded by
Board Members was 3-2.
Ms. Barry explained that while she will continue to serve as Selectman, a new Chair will be
voted in accordance with the Town Bylaw. She thanked her family, employer, current and
previous Board members and Town Staff for all their support during her three years served as
Chairman.
2019 Annual Town Meeting
-Article Discussion/Positions
Article 28- Street Acceptance Portion of Pelham Road (Technical Correction)
Ms. Axtel explained the motion was updated by removing the wording "on file in the office of the
Town Clerk" from in the fourth line between the word "plan" and "dated" to correct the technical
error from the previous vote. This updated motion has been reviewed and approved by Town
Counsel. The Board was in agreement to support the updated motion.
Article 38-Amend Zoning Bylaw/Map -186 Bedford Sheet
Ms. Barry explained the proponent has indicated they will be making a motion to refer this article
back to the Planning Board. The Board was in support of the referral of this article back to the
Planning Board.
Article 27-Appropriate for Authorized Capital Improvements
Center Track project
Mr. Lucente recused himself on the advice from State Ethics Commission to remove any
appearance of conflict.
Page 2 of 4
Ms. Barry stated there may be an amendment brought forth by a Town Meeting member asking
Town Meeting to make a supplemental appropriation under Article 27 for the Center Track
project. The Board concurred they are not in support this amendment.
Mr. Lucente returned to the meeting.
Visitors Center
Mr. Malloy explained the construction budget approved by Town Meeting for the Visitors
Center, which included construction costs, rent/moving expense, contingency, exhibits and
architectural and other non-construction costs, was $4,575,000. The low bid came in at
$4,965,930, which is $390,930 over the debt authorization. He recommended that the Board
consider a motion to increase the total debt authorization to $5,100,000, which would cover the
overage, increase the contingency from 5% to 10%, and reduce the rent/moving expense from
$100,000 to $75,000 to reflect the temporary Visitors' Center being located in the Cary Memorial
Building.
Mr. Pato said while he is uncomfortable as to the expense of the project he would support the
request for the additional funds being made under Article 27.
Ms. McKenna, Tourism Committee Chair, provided a quick recap of the different sources of
funding for this project including the State Bond Bill and a possible grant from the
Massachusetts Cultural Facilities Fund.
The Board was in agreement to support the amount of$525,000 to be requested under Article 27
of ATM 2019 for the Visitors Center project funding.
Article 39-Zoning Bylaw -Limited Site Plan Review
Four Board Members were in support and one Member was a wait for their position regarding
the School Committee's proposed amendment for reconsideration for Article 39.
Discuss Interpretive Signs
Ms. McKenna presented the four interpretive rails planned for the Lexington Battle Green and
Belfry. She explained these rails are intended to help visitors understand the significance of the
Battle Green; get excited about exploring the Battle Green; be inspired to learn about and
experience Lexington in general; and emphasize the role of the Belfry in the context of the battle.
Ms. Barry commented the buildings pictured should be those that are publically owned
Lexington buildings.
Mr. Pato said he feels the "Linger in Lexington" rail would be more appropriately placed near
the Visitors Center.
Mr. Andersen, Precinct 6 Town Meeting Member, suggested dynamic and electronic options,
such as QR Codes, should be incorporated.
Minuteman Bikeway Signs
ns
•
Page 3 of 4
Ms. Enders, Bicycle Advisory Committee Chairman, provided an overview of the phrases to be
printed on a series of signs being requested to place along the Minuteman Bikeway to remind
users to share the trail, walk and ride safely.
Upon a motion duly made and seconded, the Board of Selectmen voted 5-0 to approve the
request of the Bicycle Advisory Committee to post safety messages on the Lexington section of
the Minuteman Bikeway for the 2019 summer/fall season.
Battle Green Use Request for Promotion Ceremony for Maj J. Demers, USAF
On motion duly made and seconded, the Board of Selectmen voted 5-0 to approve the request of
Maj. Jonathan Demers to conduct a promotion ceremony on the Battle Green on Friday, May 3,
2019, from 2:00 p.m. to 3:30 p.m. subject to working out the details with the Department of
Public Works.
Consent Agenda
• Approve Lexington Little League Opening Day Request
On motion duly made and seconded, the Board of Selectmen voted 5-0 to approve a request from
the Lexington Little League to hold the Annual Little League Parade on Saturday, April 27, 2019
from 9:00 a.m. to approximately 11:00 a.m. as outlined in a letter dated March 19, 2019 subject
to approval from the Town Manager, Police Fire and Public Works departments.
Approve One-Day Liquor Licenses
On motion duly made and seconded, the Board of Selectmen voted 5-0 to approve a request for
four one-day liquor licenses for Spectacle Management to serve beer and wine at Cary Memorial
Building Lobby, 1605 Massachusetts Avenue for An Acoustic Evening with John Hiatt Show,
Friday, April 26th, 2019 8:00 p.m. to 11:00 p.m.; Felix Cavaliere's Rascals show, Sunday, May
5th, 2019 3:00 p.m. to 6:00 p.m.; Tom Rush and Jonathan Edwards show, Friday, May 24th,
2019 7:30 p.m. to 11:00 p.m.; The Capitol Steps show, Friday, May 31 st, 2019 7:30 p.m. to
11:00 P.M.
On motion duly made and seconded, the Board of Selectmen voted 5-0 to approve a request for a
one-day liquor license for Lexington Symphony to serve alcohol at Cary Memorial Building,
1605 Massachusetts Ave on Saturday, May 4, 2019 from 6:00 p.m. until 11:00 p.m. for the
purpose of Post-Concert Reception.
On motion duly made and seconded, the Board of Selectmen voted 5-0 to approve a request for a
one-day liquor license to serve beer and cider at the Lexington Battle Green Festival on the
Farmer's Market Fairgrounds on Saturday, May 11, 2019 from 12:00 p.m. to 8:00 p.m.; Saturday,
May 18, 2019 from 12:00 p.m. to 8:00 p.m.; and Sunday, May 19, 2019 from 12:00 p.m. to 4:00
p.m.
LexSwim Presentation
Page 4of4
Mark Andersen explained LexSwim is a group of concerned Lexington Residents. He presented
their request that the Town appoint an ad-hoc committee to identify options for a year round
swimming solution in Lexington. He highlighted the importance and benefits of swimming to
physical and mental health.
General Board discussion ensued and it was noted to the Recreation Committee should be included
in future discussions regarding this request.
Julian Marmier, 94 Blossomcrest Road, stated he feels there is a need for the Town to have a year
round pool to meet the needs of all swimmers.
Andrew Shun, 20 Grassland Street, stated he feels there should be a year round Town pool to meet
the needs of the High School competitive swimmers.
Adjourn
Upon motion duly made and seconded, the Board of Selection voted 5-0 to adjourn at 7:25 p.m.
A true record; Attest:
Kim Katzenback
Executive Clerk
AGENDA ITEM SUMMARY
LEXINGTON BOARD OF SELECTMEN MEETING
AGENDA ITEM TITLE:
Approve and Sign Eagle Scout Commendation Letters
PRESENTER: ITEM
NUMBER:
Doug Lucente, Chair
C.4
SUMMARY
The Board is being asked to sign letters of commendation for the following Eagle Scouts from Boy Scout
Troop 160:
• Jonathan Cademy-Pfeffer
. Luke Davis
• Alexander Mingolla
• Daniel Yun
• Eric Zhao
SUGGESTED MOTION:
Motion to send letters of commendation congratulating Jonathan Cademy-Pfeffer, Luke Davis,Alexander
Mingolla, Daniel Yun, and Eric Zhao for attaining the highest rank of Eagle in Scouting.
FOLLOW-UP:
Selectmen's Office
DATE AND APPROXIMATE TIME ON AGENDA:
5/20/2019
ATTACHMENTS:
Description Type
F) 2019 ffigle Scout I tAter .1.CIWerny, P fie�f r Troop 160 I...,ka(.IIkup Vlatefial
F) 2019 Edgle Scout.1 iltter I.,.Dav is Tro o p 1.60 13ackup VIlaterial
F) 2019 Eagle Scout I etter A.MIlingolla........'I'r(,)ol,,.) 160 Material
D 2019 Eagle Scout.LxAter D.Yin. 'Troop 160 1 leackup M'atleri.al
F) 201.9.Eagle Scout ter E Zhao '17roop 1.60 Rackttp Material.
J tw jl
I I
AP
Town of lextngton, �Haoarbu'5ett.5
AN&Er
OFFICE OF SELECTMEN
DOUGLAS M.LUCENTE,CHAIRMAN
JOSEPH N.PATO
SUZANNE E.BARRY
JILL I.HAI TEL: (781)698-4580
MARK D.SANDEEN FAX: (781)863-9468
May 21, 2019
Jonathan Cademy-Pfeffer
29B Shirley Street
Lexington, MA 02421
Dear Jonathan,
Congratulations on attaining the highest rank in Scouting. We know the trail to Eagle Scout has not always been
an easy one and we recognize that you have had to work hard to get this far. Your time in positions of
leadership within Troop #160, and the successful completion of your Eagle project, speaks to your dedication.
Being an Eagle is so much more than just another rank. It is a recognition of what you have achieved so far, but
of more importance is the implied promise you have made to maintain the ideals of Scouting into your adult
life.
We know that your family and fellow Scouts are proud of you and will look to you to be a leader as you
continue your j ourney beyond Eagle.
Again, congratulations and good luck in all your future endeavors.
Sincerely,
Douglas M. Lucente, Chairman
Joseph N. Pato
Suzanne E. Barry
Jill I. Hai
Mark D. Sandeen
1625 MASSACHUSETTS AVENUE- LEXINGTON,MASSACHUSETTS 02420
e-mail selectmen@lexingtonma.gov
J tw jl
I I
AP
Town of lextngton, �Haoarbu'5ett.5
AN&Er
OFFICE OF SELECTMEN
DOUGLAS M.LUCENTE,CHAIRMAN
JOSEPH N.PATO
SUZANNE E.BARRY
JILL I.HAI TEL: (781)698-4580
MARK D.SANDEEN FAX: (781)863-9468
May 21, 2019
Luke Davis
36 Williams Road
Lexington, MA 02420
Dear Luke,
Congratulations on attaining the highest rank in Scouting. We know the trail to Eagle Scout has not always been
an easy one and we recognize that you have had to work hard to get this far. Your time in positions of
leadership within Troop #160, and the successful completion of your Eagle project, speaks to your dedication.
Being an Eagle is so much more than just another rank. It is a recognition of what you have achieved so far, but
of more importance is the implied promise you have made to maintain the ideals of Scouting into your adult
life.
We know that your family and fellow Scouts are proud of you and will look to you to be a leader as you
continue your j ourney beyond Eagle.
Again, congratulations and good luck in all your future endeavors.
Sincerely,
Douglas M. Lucente, Chairman
Joseph N. Pato
Suzanne E. Barry
Jill I. Hai
Mark D. Sandeen
1625 MASSACHUSETTS AVENUE- LEXINGTON,MASSACHUSETTS 02420
e-mail selectmen@lexingtonma.gov
J tw jl
I I
AP
Town of lextngton, �Haoarbu'5ett.5
AN&Er
OFFICE OF SELECTMEN
DOUGLAS M.LUCENTE,CHAIRMAN
JOSEPH N.PATO
SUZANNE E.BARRY
JILL I.HAI TEL: (781)698-4580
MARK D.SANDEEN FAX: (781)863-9468
May 21, 2019
Alexander Mingolla
4 Linmoor Terrace
Lexington, MA 02420
Dear Alexander,
Congratulations on attaining the highest rank in Scouting. We know the trail to Eagle Scout has not always been
an easy one and we recognize that you have had to work hard to get this far. Your time in positions of
leadership within Troop #160, and the successful completion of your Eagle project, speaks to your dedication.
Being an Eagle is so much more than just another rank. It is a recognition of what you have achieved so far, but
of more importance is the implied promise you have made to maintain the ideals of Scouting into your adult
life.
We know that your family and fellow Scouts are proud of you and will look to you to be a leader as you
continue your j ourney beyond Eagle.
Again, congratulations and good luck in all your future endeavors.
Sincerely,
Douglas M. Lucente, Chairman
Joseph N. Pato
Suzanne E. Barry
Jill I. Hai
Mark D. Sandeen
1625 MASSACHUSETTS AVENUE- LEXINGTON,MASSACHUSETTS 02420
e-mail selectmen@lexingtonma.gov
J tw jl
I I
AP
Town of lextngton, �Haoarbu'5ett.5
AN&Er
OFFICE OF SELECTMEN
DOUGLAS M.LUCENTE,CHAIRMAN
JOSEPH N.PATO
SUZANNE E.BARRY
JILL I.HAI TEL: (781)698-4580
MARK D.SANDEEN FAX: (781)863-9468
May 21, 2019
Daniel Yun
9 Ballard Terrace
Lexington, MA 02420
Dear Daniel,
Congratulations on attaining the highest rank in Scouting. We know the trail to Eagle Scout has not always been
an easy one and we recognize that you have had to work hard to get this far. Your time in positions of
leadership within Troop #160, and the successful completion of your Eagle project, speaks to your dedication.
Being an Eagle is so much more than just another rank. It is a recognition of what you have achieved so far, but
of more importance is the implied promise you have made to maintain the ideals of Scouting into your adult
life.
We know that your family and fellow Scouts are proud of you and will look to you to be a leader as you
continue your j ourney beyond Eagle.
Again, congratulations and good luck in all your future endeavors.
Sincerely,
Douglas M. Lucente, Chairman
Joseph N. Pato
Suzanne E. Barry
Jill I. Hai
Mark D. Sandeen
1625 MASSACHUSETTS AVENUE- LEXINGTON,MASSACHUSETTS 02420
e-mail selectmen@lexingtonma.gov
J tw jl
I I
AP
Town of lextngton, �Haoarbu'5ett.5
AN&Er
OFFICE OF SELECTMEN
DOUGLAS M.LUCENTE,CHAIRMAN
JOSEPH N.PATO
SUZANNE E.BARRY
JILL I.HAI TEL: (781)698-4580
MARK D.SANDEEN FAX: (781)863-9468
May 21, 2019
Eric Zhao
10 Cooke Road
Lexington, MA 02420
Dear Eric,
Congratulations on attaining the highest rank in Scouting. We know the trail to Eagle Scout has not always been
an easy one and we recognize that you have had to work hard to get this far. Your time in positions of
leadership within Troop #160, and the successful completion of your Eagle project, speaks to your dedication.
Being an Eagle is so much more than just another rank. It is a recognition of what you have achieved so far, but
of more importance is the implied promise you have made to maintain the ideals of Scouting into your adult
life.
We know that your family and fellow Scouts are proud of you and will look to you to be a leader as you
continue your j ourney beyond Eagle.
Again, congratulations and good luck in all your future endeavors.
Sincerely,
Douglas M. Lucente, Chairman
Joseph N. Pato
Suzanne E. Barry
Jill I. Hai
Mark D. Sandeen
1625 MASSACHUSETTS AVENUE- LEXINGTON,MASSACHUSETTS 02420
e-mail selectmen@lexingtonma.gov