Earlier this year, the Providence City Council eliminated a provision for rental homes in the city's budget that allowed owners to exempt the first 33 percent of the homes' value from the city's property tax. The change is expected to raise approximately $20 million from the roughly 12,000 rental properties in Providence, according to the Providence Journal.
The Council approved the tax increase in a contentious 8-7 vote. Mayor David Cicilline '83, who is running for Congress in Tuesday's election, had threatened to veto any bill increasing taxes on rental property but ultimately allowed it to become law without his signature.
The editorial page board spoke with several Providence landlords who told the board that the elimination of the exemption alone will result in an increase in property taxes for rental homes of approximately 50 percent over what they currently pay. Ed Kazarian, an East Side landlord, told the editorial page board that the elimination of the exemption, combined with the overall increase in property taxes for all residential properties, has resulted in a 70 to 90 percent increase to his tax bill.
According to Kazarian, this "tremendous tax burden" makes it difficult to maintain off-campus housing as a viable alternative to residence halls for students. The landlords we spoke with hoped the council would reconsider its decision to eliminate the entire exemption, and estimated they would be forced to increase students' rent by 5 to 10 percent if the council stood by its decision.
Councilman Seth Yurdin, who voted against repeal of the exemption, told the editorial page board that the council's Finance Committee is considering a proposal to reinstate the exemption at a lowered 15 percent level, though he was not sure what the proposal's chances are. Yurdin, who represents Ward 1, which covers most of Brown's off-campus housing, said such a change would decrease the city's revenues by about $10 million, which would have to be found somewhere else in the budget.
Yurdin laid much of the blame for the increased taxes on the state, which has cut more than $50 million in funding to Providence over the last several years, but he also faulted the council for failing to undertake a thorough "discussion about the appropriate tax balance between owner-occupied and not owner-occupied" housing.
We understand that the city is going through tough times. Students living off campus should expect to contribute to solving the budget problems like any other citizens of Providence. But this new burden shouldn't be imposed all at once. By abruptly increasing the property tax on off-campus housing by more than 50 percent, the city leaves students and other renters little time to reevaluate their options.
We urge the City Council to reinstate at least half of the exemption. Reasonable tax increases should not be off the table in these times, but it's unfair to balance the city's budget on the backs of students and other renters. Students who rent homes aren't the rich aristocrats many residents of Providence might envision when thinking of the East Side. And we imagine that other renters throughout the city aren't either. By compromising at a 15-percent tax exemption for the upcoming year, this new burden can at least be eased in over time.
The city should also get together with Brown and the community to discuss sensible ways to spread the burden of making up for the state's budget cuts. The solution is not to rush a steep tax increase through a sharply divided council. Voters should keep the council's actions and their harsh effects on students and renters in mind when going to the polls on Tuesday.
Editorials are written by The Herald's editorial page board. Send comments to editorials@browndailyherald.com.
