By Andy Churchill & Bryan Harvey

Once again, Amherst is in a fiscal crisis. Spending keeps rising, state aid hasn’t kept pace, federal COVID funds have dried up, and local tax rates are already high. 

Again this year, it’s apparent that Amherst’s revenue isn’t enough to support all the services town residents depend upon. So far this has led to discussions of where we can cut costs, pitting various town departments and constituencies against each other in a zero-sum game. 

While we should certainly be looking at smart cost savings, we can’t afford to ignore the revenue side of the picture. What options do we have for a strategy that “expands the pie” of available town funds without raising taxes beyond the limitations of Proposition 2½? One option stands out: bring in more net tax revenue by expanding housing. 

A quick look at where we get our money paints a pretty clear picture: as the share of our budget paid by the state has declined, we’ve had to make up the difference locally.

And the revenue coming from the local property tax consists almost entirely of taxes on people’s homes. 

When 88% of local taxes come from residential properties, the gap with state aid translates directly into higher tax bills and rents. 

This dilemma is not something new. The first graph above looks all the way back to the passage of Proposition 2½, and it’s clear that — like many other communities — Amherst has looked for ways to go beyond its cap. Roughly speaking, every six or seven years we’ve had to find some way to boost local revenue in order to maintain service levels. 

• During the first years of Prop 2½ in the 1980s, the state pumped millions of dollars into local budgets, providing substantial property tax relief.
• But in the 1990s the state put the brakes on local aid, and reliance on the property tax shot up. We had our first Prop 2 ½ override in 1992.
• Then for a while state aid rebounded, and we were able to avoid another override for a dozen years.
• As we moved into the new millennium, however, even though state aid increased, it did not grow as fast as local spending. Reliance on the property tax reached new heights with overrides in 2005 and again in 2011. It was a grim pattern: would we need overrides forever?

The answer turned out to be somewhat surprising. Beginning in 2014 major new multi-unit housing—primarily to accommodate growth in UMass enrollment—began to appear for the first time in more than forty years. 

Whatever else one might say about them, those projects pay a lot of property tax, more than $2 million worth, each year (about what we would typically look for in a Prop 2½ override).

Here is the current annual tax revenue from a selection of these recent housing projects:

Annual Tax Revenue	Property	Year Built
$331,531	Olympia Drive	2014
$303,654	1 East Pleasant	2017
$214,348	Kendrick Place	2018
$112,726	70 University Drive	2019
$305,293	Aspen Heights	2020
$145,736	University Drive South	2021
$277,851	11 East Pleasant	2022
$191,600	Southeast Commons on South East	2024

Without them (and temporary ARPA funding from the federal government at the height of the pandemic), we’d either be going to the voters again for tax overrides or seriously reducing budgets for schools and services (not just arguing about how much to increase). 

So Amherst has demonstrated its ability to bring in new revenues by expanding housing, especially through denser development. Can we find other opportunities along these lines?

This strategy is about much more than revenue, of course. Housing in all its dimensions—supply, affordability, impacts on neighborhoods—represents a central challenge for our community. Student-driven housing is one option, not a prescription, for revenue growth. 

Let’s consider some other options: 

• Senior housing. It is evident that a great deal of our housing capacity is currently occupied by long-time residents (like both of us) who want to remain in the community but see few options beyond staying in the family home. Could we change that, by encouraging more senior housing, and expand net revenue while simultaneously opening up capacity for new generations? 

• Young professional housing. What about younger professionals who want to live in a community like ours but are past their “student” housing days? What could we offer them? 

These kinds of “win-win-win” opportunities can serve our whole range of housing goals: 1) generate significant amounts of spendable revenue, 2) support affordability by expanding overall supply, and 3) do so without negative impacts on established neighborhoods.  

How can we plan for and support these types of opportunities? Here are a few thoughts:

1. Make revenue generation through housing development a priority. We should not be pursuing development for its own sake, but we also can’t overlook its capacity to help our community fund its values and aspirations. Potential projects need to be evaluated in terms of how much they can help by generating net revenue available for town services. 

2. Set revenue targets to meet town goals. A few rough scenarios can move these ideas from an abstraction to a real set of choices. For example, at our current rate of spending, how much new revenue do we need in order to avoid overrides? Or to actually reduce taxes? Or to address long-neglected infrastructure challenges? We don’t need a hundred projects: we need a few good ones that can meet identified community goals.

3. Build a pro-housing coalition. Whether you’re a parent concerned about school funding, a senior with more house than you need, or anyone who has wondered how we’ll fix all our bumpy roads, your voice matters. Pro-housing coalitions are springing up across the Commonwealth in favor of sensible, revenue-generating housing development and the appropriate zoning and permitting that supports it (see Abundant Housing Massachusetts for examples). We should have one here, too.

The key is to decide what works for us and what it will take to get there. We can increase revenues without raising taxes. And we can do so while relieving pressure on housing costs. Let’s work together to build more housing.

Andy Churchill is a member of the 2024 Charter Review Committee and served as chair of the 2016-2017 Amherst Charter Commission. He also served on the Amherst School Committee from 2004 to 2010.

Bryan Harvey served as chair of the 2001-03 Amherst Charter Commission. He also served on the Amherst Finance Committee from 1981 to 1991, and on the Amherst Selectboard from 1991-2001. He is married to Town Councilor Lynn Griesemer. This post reflects his own perspective.