The persistent popularity of remote work and high interest rates have combined to form an “economic act of God” that puts Boston at risk of losing a chunk of its tax base by the end of the decade, according to a new report.
Warning about the prospect of a “permanently diminished city,” think tank analysts said a sharp and steady drop in the value of office buildings could soon punch a hole in commercial property taxes, which make up a large share of the revenue that Boston uses to fund education, law enforcement, parks and other services.
A report published Thursday by the Boston Policy Institute, a non-partisan think tank that launched late last year , and the Center for State Policy Analysis at Tufts University did not mince words in its assessment of the financial risks that the state’s capital and largest city faces.
Stressing how “tricky” it is to quantify the “precise impact of this slow-motion collapse in commercial real estate prices,” the report estimated that Boston could face a cumulative commercial property tax shortfall of $1.2 billion to $1.5 billion between 2025 and 2029.