Not only is 143 Fearing Street a bad place to live, owning the property is a bad investment. The property value of 143 Fearing Street has not been keeping up with inflation and the taxes are high.
Amherst is Now Unfriendly to Homeowners Renting Rooms
When I purchased 143 Fearing Street in 1989, the math of living there worked. Like other people, my idea was that I could buy a home in a college town and rent out rooms to students to help pay my mortgage. However, in the years since I purchased that house, Amherst has done everything it can to eliminate renting rooms as a way to finance property.
If you rent a room to a student in Amherst, that student has the right to let inspectors into your home at any time. If you have tenants, your home is not your own. In one case, I had a tenant call the health inspector to my home. To this day I do not know what violation he was hoping to find. I had a cleaning schedule for all of the public areas in the house including the bathroom and kitchen. And since I lived in the house, any maintenance problem was taken care of as soon as possible because it affected me as well as the tenants. So, when the Amherst health inspector came into my house there were no violations that I knew about for him to find. Not finding a violation in the kitchen or bathroom or basement he then decided to inspect each of the tenant rooms. In one room, he noticed that at the top corner of one window there was a one inch long crack in one pane of glass. As a result of finding this crack he then went walking into every room saying loudly, “I found a violation!” For this violation I received a notice from the town that the room was uninhabitable.
Naturally, after the inspector left I took the window out and had that pane of glass replaced. It was winter when this inspection was done, and at that time there was an outside storm window in place, and there was piece of plexiglas covering the window from the inside. The one inch crack he found was at the top corner of the middle of three windows. When I brought that window to be repaired the man the shop pointed out that it had swirls in the glass, and he told me that it was valuable because it had been handmade. I told him that it had to be replaced because of the small crack in the one corner. I noticed that he removed that pane of glass very carefully. I can only guess that he later sold that glass to someone else. I asked him how he thought the glass had gotten broken. He said that it was likely that the corner had gotten cracked at the time it was installed. I asked him how long ago he thought that had been. He estimated between eighty and a hundred years. The town of Amherst was giving me health code violation for a window that may have been cracked for most of a century. Suffice to say, the scrutiny that homeowners are placed under when having student tenants makes renting rooms no longer a funding option for property owners in Amherst.
Amherst Is Unfriendly to Businesses
Making matters worse, the property taxes in Amherst went up dramatically between when I purchased my house and when sold it. When I purchased 143 Fearing Street in 1989, the taxes on the house were $980 per year. When I sold the house, my property taxes were over $5,000 per year. The reason why Amherst property taxes have gone up so dramatically are complex, but here are two of the causes.
Among the reasons why Amherst taxes are so high is that the town has almost no tax base from businesses. Amherst has been unfriendly to business for decades, every year making decisions that driving out long time companies and preventing new companies from coming in.
Years ago, there was a trucking company that had prospered in Amherst for over one hundred years. When a new housing complex went in on an adjacent lot, the neighbors complained that there was a chance that this trucking company could be spilling waste oil and contaminating the groundwater. These claims were never verified, but the town put enough pressure on the business about environmental concerns that the company moved just outside of the Amherst town line with the result that all tax income from this trucking company is now lost to Amherst in perpetuity.
In another case, there was a large old brick building that a small company wanted to move into. The town inspection office enforced extensive requirements for wheelchair access and sprinkler systems before the company could move in. Predictably that business moved to an adjacent town, and equally predictably that building was torn down. I understand the importance of staying up to date with current building code, but adjacent towns are able to balance code enforcement with maintaining their tax base, something Amherst does not know how to do.. There are many other stories of this type I could recount, but suffice to say that the lack of business tax base must be made up for by homeowners.
If you have a business in Amherst, the way that it is taxed is particularly upsetting. A town assessor will come into your business and will add up the value of every desk, chair, and piece of office equipment at your location so that they can tax you on its total value. They are putting a penalty on store owners who make their place of business look good. On the day that the assessor came to my business I happened to bring my home laptop to my office. At the time that new and expensive laptop cost almost $1,500. The assessor said that since it was there the day that he was assessing my business that I would be taxed on it. That laptop was worth more than probably every piece of furniture in the entire room. I argued to the town that I only had my laptop at my office for that one day. I lost that appeal on the grounds that since that laptop was my property I could be using it for business even if I brought it home. The result was that I had to pay taxes on that laptop for years afterward, even though it was only at my office that one day.
Amherst’s Schools Are Damaging the Town
Many years ago, the permanent population of Amherst was smaller and most classes at the university and colleges were taught by tenured professors. In those years, the Amherst public school system developed a reputation for providing some of the best education and best services for children with special needs.
The reason for Amherst developing these aspects of its public schools had to do with the professors, who made up a large percentage of the school families. Over a period of years, these professors brought successful lawsuits against the town for not providing the services needed for their children. At that time, the number of children who needed these services was small, and although the cost of providing these services per student was high, there were few enough students who needed these services that they made up a small part of the total school budget. What has happened in recent years is that low cost housing has been built in Amherst and poor families with special needs children have moved to the town specifically because of the quality special needs education that the Amherst public schools offer. Burdening the schools further, these lower socioeconomic families commonly have more children per household than the more educated professors’ families did. The result is that the Amherst public school system is now overwhelmed with the demand for services for these special needs children. At the time when I left, over 75% of the Amherst town budget went to the public schools, leaving little extra money for other essential town services.
Added to the high costs of providing services to students with special needs, there have also been years of allegations of corruption in the Amherst school system, overpaid administrators, and stories of the diminishing quality of education. These points will probably not affect buyers who are interested in purchasing 143 Fearing Street, since the house will probably be purchased by parents of students in college or investors, but knowing these problems about the town is useful to understand why the taxes on this small house are so high and likely to continue increasing.
Building Expansion Is Not Feasible
An idea that I had while living at 143 Fearing Street was that I could expand the building, creating more units, and paying for them with the rent that I collected. However, this is cost ineffective. With the rental costs that you can receive, and the cost of construction per square foot in Amherst, the payback time on such an investment would be over thirty years to break even. However, given Amherst’s increasingly unfriendly attitude toward landlords, even if you did choose to make this investment it is unlikely you could rent rooms long enough to pay back the mortgage.
Housing Values Are Not Keeping Up with Inflation
If the fact that you can no longer rent rooms at 143 Fearing Street is not enough, and if the lack of a commercial tax base in Amherst is not enough, and if the ever increasing burden of the public schools is not enough, you should also know that the resale value of 143 Fearing Street is not keeping up with inflation. Even though I sold the house in a down market, if the current owner were to sell it at current real estate prices he would be losing money. There might have been a time when buying this house could have been justified as a good investment, but for at least the last ten years owning 143 Fearing Street has been a bad place to put your money.