Even last year, before the total CRE devaluation from post-pandemic highs took place, the issue of metropolitan tax collections had raised its head.
"The divergence in commercial and residential property values makes it hard to predict the fiscal consequences for local governments broadly," Thomas Brosy of the Tax Policy Center, a venture of the Urban Institute and Brookings Institution, wrote in 2023. "Total property tax revenue accounts for 30 percent of local general revenue, but the pain from this transition will likely be concentrated in major cities with big commercial districts."
Look at office alone, as KBRA recently did, and the implications are uncomfortable when you consider three factors: ongoing hybrid work, tech employment downsizing in the face of a shift to artificial intelligence, and in some urban centers an oversupply of commercial real estate.
Want to continue reading?
Become a Free ALM Digital Reader.
Once you are an ALM Digital Member, you’ll receive:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
*May exclude premium content© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
