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The Many Dimensions of Change in Boston, Day 3: A Neighborhood’s Contribution to Property Assessment

 

How much does your neighborhood affect your property’s value? Every year, local governments assess the value of a property for tax purposes [1][2]. The typical tax assessment determines a property’s value based on key physical characteristics of the property and building that are used for comparison against other similar properties. Yet property values for similar property types can differ across neighborhoods (see Table 1). The BARI team set out to identify the unique effect Boston’s neighborhoods have on assessed property values using the recently released 2018 Property Assessment dataset from the City of Boston.

 

 

We used census tracts to approximate neighborhoods to run a multilevel (or mixed effects) model. Multilevel models allow us to analyze nested or grouped data (like properties in a neighborhood) and disentangle the effects at each of these levels. We were then able to estimate the value of property in each neighborhood while accounting for critical differences between properties, including the lot size, the area of the building, the amount of “living space” in the building, the number of floors in the building, the age of the building, when the building was last renovated, and the type of land use [3].

 

We plotted the effects of each census tract on property value (see Table 2). This plot shows how much the neighborhoods’ estimated value deviates from the city’s estimated mean property value when we account for all pertinent property-level variables . The farther the point is from zero (whether negative or positive), the greater effect the neighborhood has on the assessed property value. This plot is another way of showing how different neighborhoods have different effects on property values.

 

 

We also mapped the neighborhoods’ effects on property values in Boston (see map). Similar to Table 2, this map uses a color scale to show the degree of deviation among the census tracts. Red and Blue demonstrate the extreme effects the neighborhood has on property values while the yellow represents deviations that are close to zero or no effect. Unsurprisingly, the Financial District, Back Bay, Fenway/Kenmore, and the South End have positive effects on the value of their properties, while areas of Roxbury, Dorchester, and Mattapan are seeing more negative effects to their property values. Interestingly, just about the entirety of Allston/Brighton is close to or at the city’s estimated average value, while two islands of purple in Jamaica Plain and East Boston are seeing disproportionately higher effects on their property values than their surrounding neighbors. It is also interesting to note, that many of the orange census tracts correspond with areas reporting recent cases of gentrification: Roslindale, Ashmont, Savin Hill, Roxbury Crossing, and East Boston. This map is available on the Boston Data Portal where it can be combined with other layers detailing a wealth of information about the City of Boston.

 

 

 

[1] Fisher, Glenn. “History of Property Taxes in the United States”. EH.Net Encyclopedia, edited by Robert Whaples. September 30, 2002. URL http://eh.net/encyclopedia/history-of-property-taxes-in-the-united-states/.

[2] Oates, Wallace E. “Local Property Taxation: An Assessment”. Land Lines, May 1999. URL https://www.lincolninst.edu/publications/articles/local-property-taxation

[3] It should be noted that when compared with the intercept model, our model is statistically significant at the 0.000 level (χ2(11)=95714, p<2.2×1016)

Published On: April 12, 2018 |
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