Boston’s total taxable property value hit a high of $164 billion in FY19, growing by $72.3 billion, or 78.4 percent since FY13 and East Boston is no different.
According to a Boston Municipal Research Bureau (BMRB) report, Eastie outpaced the rest of the city and the total taxable property value in hit 5.052 billion in FY19. This was a growth of 2.48 billion since FY13 or 96.7 percent in the neighborhood.
Eastie was third only to Mission Hill and the Seaport, which reported a 110 and 181 percent increase in the total taxable property since FY13 respectively. Boston’s more affluent zip codes like Back Bay and Beacon Hill only saw a 72 percent increase between FY13 and FY19.
The report cites a renewed interest in city living coupled with a decrease in unemployment as reasons for the unprecedented growth in Eastie as well as Boston.
“Unprecedented economic growth and renewed interest in city living the City of Boston continues to experience significant economic growth,” said the BMRB report. “The city’s annual unemployment rate decreased from 6.1 percent in 2013 to 3.0 percent in 2018, the most recent year with available data for this measure. Strong employment growth is projected to continue over the next decade.”
According to the report the Boston Planning and Development Agency (BPDA) predicts an increase of between 107,000 and 150,000 new jobs in Boston by 2026. In addition to new job creation, Boston has experienced wage growth exceeding state and national rates.
“From 2013 to 2017, Suffolk County residents’ per capita personal income (in fixed 2018 dollars) increased 13.7 percent from $66,582 to $75,711, outpacing both Massachusetts and the United States,” said the report. “ Meanwhile, Boston has experienced a resurgence in city living and significant growth in population. From 2013 to 2017, the City added 39,976 residents, or 6.4 percent, to a total population of 669,158.”
In 2014, Mayor Martin Walsh Boston released his administration’s housing plan to increase the increase in demand for both market rate and affordable housing here and citywide.
“Housing Boston 2030, which projected that the city’s population will reach 709,400 by the year 2030, revised the projection upwards to 759,727,” said the report. “Favorable economic conditions and renewed interest in city living have been significant drivers of property value increases and, in turn, a critical source of revenue increases for the City through a growing property tax base.”
Property value increases in Eastie and Boston can also be attributed to both the increasing value of existing properties and the new development occurring.
“All of Boston’s neighborhoods saw a substantial increase in property values over the six years from FY13 to FY19,” said the report. “Increases ranged from 42.0 percent in West Roxbury and Roslindale (Ward 20) to 96.7 percent in East Boston (Ward I), 110.0 percent in Mission Hill (Ward 10) to 181.0 percent in the rapidly developing Seaport (Ward 6).”
However, the report warns that maintaining prudent fiscal stewardship in this period of extraordinary development is essential to Boston’s resiliency through the ups and downs of economic cycles.
“Strong new growth, particularly over the last six years, is not a new normal, but rather a sign of Boston’s recent economic boom,” said the report. “Of the $134.2 million in additional property tax revenue in FY19, nearly 60.0 percent ($78.7 million) came from new growth. Boston’s new growth decelerates during an economic downturn, which limits the City’s revenue growth.”
As the City notes in its FY20 budget, “new growth revenue is volatile, and depends on the development cycle and the local, state and national economies.”
“Boston should keep a close eye on spending to ensure it has the ability to sustain quality city services and infrastructure, including commitments to address challenges around housing, transportation, education and equity, when the current pace of economic development slows,” the report concludes.