All Forum Posts by: Brian J Allen

@Colleen F.. The issue here is property taxes which are much lower in Framingham, and personal property taxes on the equipment.  Worcester with its Dual Tax rate is chasing all the businesses away inadvertently.  Yes labor is cheaper, transportation is likely cheaper as well, and realistically the rents are cheaper, but the city council votes on tax rates and they continually are switching that tax rate from the voters(residential households) to businesses.  It is a shame as the city has great opportunity for growth, but most of the residents of Worcester are forced to go East for jobs as businesses either are not established in Worcester, or move to the suburbs to control their fixed costs.

This summer, Jack’s Abby Brewing of Framingham acquired Wormtown Brewing of Worcester, marking another step in the ongoing consolidation of the microbrewing industry in Massachusetts. Wormtown has built a strong brand, with its beer recognized beyond the local region.

However, this merger raises questions about the challenges of doing business in Worcester. If Wormtown is better off brewing its beer in Framingham, a key factor could be Worcester’s commercial tax rate. The dual tax rate in Worcester has been a deterrent for businesses, and this merger serves as yet another example of its impact.

From a financial perspective, the numbers are clear. Worcester’s commercial tax rate stands at $30.04 per $1,000 in property value, compared to Framingham’s significantly lower rate of $11.94. On top of that, Wormtown was being charged approximately $115,000 in personal property taxes for its equipment, in addition to rent and likely a portion of a triple-net lease.

By moving manufacturing operations to Framingham, Jack’s Abby can increase capacity without incurring additional taxes or equipment costs. Given the tax disparity, choosing Framingham over Worcester makes clear economic sense.

Interestingly, Worcester has a lower cost of residential rents and likely lower labor costs than Framingham, yet its business tax policies continue to push manufacturers out. This trend is reinforcing Worcester’s evolution into a bedroom community for towns with more favorable business climates to the east.

On the bright side, Jack’s Abby has announced plans to expand Wormtown’s taproom on Shrewsbury Street, including outdoor seating. While this is great news for local beer enthusiasts, it underscores the irony that Worcester residents will be enjoying beer brewed in Framingham—largely due to Worcester’s tax structure.

@Tre DeBraga. I do all of Worcester County if you are interested.  Basically I advise people to stay close to where they want to be and wait it out.  If you have to get to Marlboro then Worcester/millbury is good, but if you have to get to Boston during business hours, you might want to be north or south with better Train Access.  DM me if you are you want to chat.

@Elisha Johnston Welcome to BP and Worcester.  I would be glad to help, am local and deal exclusively with Multis and Househacks.  Ironically my son is applying to med school this summer.  

Food insecurity in Worcester has doubled from 17.7% to 38% since 2020. This sharp increase raises concerns about broader economic stability, particularly in relation to housing and rental affordability.

What is Food Insecurity?

Food insecurity means that individuals and families cannot consistently access the food they need, often forcing them to make difficult choices about how to allocate their limited financial resources. It is reminiscent of early human societies that struggled to grow and prosper because they had to spend most of their time securing food.

Impact on Housing and Rents

With Worcester rents rising rapidly over the past five years, households facing food insecurity are often forced to cut costs elsewhere. When people struggle to afford food, they may also struggle to pay rent, leading to increased financial stress and difficult trade-offs between essentials like housing, transportation, and healthcare.

Tenants who are food insecure are likely also rent-burdened, meaning they spend a significant portion of their income on housing. This situation is problematic for both tenants and landlords. If tenants fall behind on rent, they risk eviction, while landlords face financial instability from unpaid rent. Massachusetts’s tenant-friendly laws make eviction a lengthy and difficult process, leaving landlords in a precarious position.

While there are financial assistance programs available to help tenants behind on rent, relying on such aid is not a sustainable solution. Ideally, a balance should exist where tenants can afford their rent without requiring external support, fostering a stable and cooperative rental market.

The rapid rise in food insecurity signals deeper financial distress among residents, which directly impacts rental stability. Without addressing these economic challenges—whether through increased wages, rental assistance, or expanded food aid—both tenants and landlords will continue to struggle. A holistic approach to housing and economic stability is needed to ensure a thriving Worcester for all residents.

There has been significant discussion regarding former President Trump’s statements about deporting illegal immigrants, particularly those with criminal records. While the feasibility of such mass deportations remains uncertain, it is worth considering how such actions, if implemented, could impact Worcester’s rental real estate market.

The Current Housing Landscape in Worcester

Governor Maura Healey has recently reduced state spending on housing assistance for migrants, though it is unclear whether these cuts affect documented or undocumented individuals. The state is working to transition migrants from motels to apartments, which has freed up some temporary accommodations but increased demand for rental housing. Local social service agencies have already reported heightened demand, reaching out to landlords in search of available apartments.

The Three-Tiered Deportation Impact

If a large-scale deportation initiative were to occur, its impact on the Worcester rental market would depend on three primary factors:

1. Deportation of Criminal Illegal Immigrants: While deporting undocumented individuals with criminal records might be a priority, the actual number of such individuals is likely small. This means the overall impact on rental demand would be negligible.

2. Voluntary Departures: Some undocumented immigrants may choose to leave voluntarily to avoid forced deportation and potential future entry bans. While this could lead to some vacancies, it is unlikely to cause a significant drop in overall housing demand, as these units would likely be filled by other renters.

3. Mass Deportations: If aggressive enforcement led to a large-scale removal of undocumented immigrants, there could be a more noticeable impact. However, Worcester’s housing market is already under pressure due to high demand, and other populations—including legal immigrants, students, and lower-income residents—could quickly absorb the vacant units.

Other Factors to Consider

- Labor Market Effects: Many undocumented immigrants work in essential industries like construction, food service, and cleaning. Their removal could lead to labor shortages, potentially increasing costs for landlords and indirectly pushing rents higher rather than lower.

- Local Enforcement Challenges: Worcester’s schools, churches, and even police departments do not have strong incentives to actively assist in mass deportations. Without local cooperation, large-scale removals may be difficult to implement effectively.

- Substitution of Tenants: Given the ongoing demand for housing in Worcester, vacant apartments are unlikely to sit empty for long. Instead, other renters—including displaced residents from Boston’s higher-priced market—could take their place.

Conclusion

While a hypothetical mass deportation effort might free up some rental units in Worcester, the effects on rent prices would likely be gradual and relatively minor. Worcester’s rental market is shaped by broader factors such as migration trends, economic conditions, and state housing policies. Unless there is a dramatic shift in these areas, landlords and investors should not expect a major decline in rental demand or prices due to immigration enforcement alone.

i am looking for help to find properties in the area and get an idea of pricing.  All markets are local and I'm smart enough to know what I don't know

My son is graduating from Seton Hall, and we are looking for a Multi or maybe a large SF house to purchase for him to live in.  Hoping to either find some investors or an investor focused realtor.  I am a realtor myself in MA.  Let me know if there are some folks out there in this area.

Sadly as they say "nothing is certain but death and taxes" and sadly death solves all the problems.

Most investors I have worked with share a common vision of the 1031 Exchange and its practical applications. The law allows an investor to defer paying capital gains taxes on the sale of an investment property if the proceeds are reinvested into a more expensive asset within specified timelines.

Real estate investors benefit from numerous incentives, one of the most significant being the depreciation deduction. This allows property owners to depreciate a building's value over 27.5 years, helping to offset rental or earned income. Many investors actively seek additional properties to maximize depreciation deductions against their earned income. Over time, however, as properties appreciate and have been significantly depreciated, investors often look to leverage the 1031 Exchange to upgrade to larger or more valuable properties.

The Traditional 1031 Strategy

A typical investor might sell a three-decker that has been owned for years and, rather than paying capital gains taxes, use a 1031 Exchange to purchase a larger or more expensive property—or even multiple properties (up to three). This strategy is particularly beneficial for those in high tax brackets who want to continue expanding their portfolios while deferring taxes.

A Different Approach to the 1031 Exchange

At some point, however, investors may find themselves less interested in acquiring more properties and managing a large portfolio. If you have been successful and no longer need the cash flow but want to reduce management and maintenance burdens, there are alternative strategies worth considering.

Renting to Family Members
One creative approach is to use a 1031 Exchange to buy single-family homes and rent them to your children. The law does not require that an investment property be highly profitable—only that it be an investment and more expensive than the relinquished property. If you pass away, your heirs can inherit the properties on a stepped-up basis, effectively eliminating the deferred taxes.

Investing in Vacation Rentals
Another option is purchasing vacation homes and renting them out. The IRS allows personal use for up to two weeks per year. This strategy offers tax deferral benefits while providing a lifestyle upgrade. Additionally, if structured correctly, an investor could sell their primary residence, take the capital gains exemption for living there for two of the last five years, move into a vacation home, and then after another two years qualify for another exemption.

Maximizing Long-Term Benefits

By thinking creatively about real estate and tax strategies, investors can find ways to minimize tax burdens while aligning their portfolios with evolving personal and financial needs. Whether transitioning into easier-to-manage investments or structuring purchases to benefit family members, there are many ways to use the 1031 Exchange to achieve long-term financial advantages.