Officials differ on financial future
By George P. Hassett

Somerville homeowners will see a minor drop in their tax bills this year, announced City Assessor Richard Brescia at the Dec. 14 Board of Aldermen meeting. Mayor Joseph A. Curtatone called the news “a cause for celebration,” and said, “This has turned out to be one of the most exciting and positive years in modern Somerville history.”
  But Alderman-at-Large and Chair of the Finance Committee William A. White urged restraint for city spending in the next fiscal year.
  ‚ÄúThe mayor is the one who is optimistic,‚Äù White said. ‚ÄúI‚Äôm still cautious about next year‚Äôs financial situation.‚Äù

  The average condominium owner will pay $110 less in property taxes than they did last year. The average two-family homeowner can expect a $2 decrease. Three-family homeowners will pay  $21 less on average. Single family homeowners will see the only decrease, which city officials estimate at $10. The tax rates for 2007 are based on sales in the calendar year of 2005.
  The neighborhoods where housing values increased most were West Somerville, Winter Hill, Prospect Hill and East Somerville, said Mark Levy, of the city assessor‚Äôs office.
  ‚ÄúEast Somerville has come up quite a bit,‚Äù Levy said. ‚ÄúIt still trails all other districts but the gap is beginning to close.‚Äù
  The property tax decreases are due to $3.2 million in new tax dollars, Brescia said. The growth is the largest in years and is due to the $63 million sale of Twin City Plaza, the completion of the Assembly Square mall and 609 new condominium units, 309 of which were converted from two and three family homes, White said.
  White said he is guarded about next year‚Äôs tax situation because the city can not expect the same amount of growth it had this year.
  ‚ÄúThe decline in condominium values and conversions should gives us some caution. Plus we‚Äôre not expecting any large scale commercial transactions like we saw with the sale of Twin City Plaza and the completion of the Assembly Square mall,‚Äù he said.
Somerville: The city without a tax base
Somerville has long faced an uphill financial battle to lower property taxes, because of its lack of a significant commercial tax base. The city has one-third the commercial development of Boston and Everett and just one-quarter of Cambridge’s commercial foundation. The poor commercial tax base forces homeowners to shoulder the burden of funding city services.
  Proponents of intense Assembly Square development contend the traditionally underutilized 145 acre business district can be the city‚Äôs most significant commercial tax base. But this year‚Äôs renovation of the mall at Assembly Square saved the average homeowner only $30 in property taxes, White said. Without the mall, the tax rate would have been $10.23, with the mall it is eight cents less, at $10.15, he said.
  ‚ÄúTaxpayers will not see a significant benefit from Assembly Square until the heavy, mixed-use development begins and that could be as long as 10 years away,‚Äù he said. ‚ÄúWe‚Äôre not going to see any further development of Assembly Square for two and a half years when the new Ikea is built.‚Äù 
Condo conversion concern and controversy
  Affordable housing advocates contend that the increasing number of two and three family homes being converted and sold off as condominiums are forcing out longtime, middle class residents who have helped shape the city‚Äôs unique character. But the conversions were a significant boost to Somerville‚Äôs economy this year, with 309 new condominiums coming from two and three family homes. In all, the city saw 609 new condos built, accounting for half of the city‚Äôs new residential growth.
  ‚ÄúIt is noteworthy that fiscal year 2007 is the first year in the city‚Äôs history that we have more condo units than single family and three family homes,‚Äù Levy said.
  Condominium conversions have slowed this year and their values have also decreased, Levy said.
  Curtatone submitted an ordinance to the Board of Aldermen in May, that eventually drew harsh criticism from homeowners in the city.
  The proposal would have increased the notification times — to up to four years — that landlords would be required to provide before converting their multifamily buildings into condos. Somerville’s current rules for conversion require landlords to give tenants one year’s notice of a conversion. The elderly, handicapped, and low income residents have two years.
  Under current law, landlords pay $300 in relocation reimbursement to low-income tenants. The new provision would require paying $2,000 or one month’s rent to tenants, and $4,000 or two months rent to the elderly, handicapped, and those with low incomes. Curtatone said at the time that the ordinance would add predictability to condo conversions, while protecting the rights of tenants.
  The proposal drew harsh criticism at a May 30 Legislative Matters committee meeting. Landlords packed City Hall to cheer aldermen who questioned the proposal‚Äôs legality. Curtatone has since formed a condo conversion working group headed by Ward 6 Alderman Rebekah Gewirtz and made up of advocates on both sides of the issue who will report their findings.