Under M.G.L.c.59 and DOR guidelines, properties are to be assessed and taxed according to their "highest and best use". In some cases, it is possible that the highest and best use of a vacant site could be as a parking lot if the income stream generated exceeds the income of a structure the size and utility of which is limited by zoning.
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Actually, the above is only true in theory, never in fact. You can look up the assessments on line. This property has an assessed value of $1.95 MM and a tax of $24K in 2008.
That's a joke, folks. Never mind the building's condition, I'll guarantee that the sales price was for a helluva lot more than that. And until very recently (the city has been putting the heat on, a bit) it was even more of a joke ... as recently as 2004 the assessment was only $715K and the tax proportionately trivial.
If you want to really piss yourself off, use the on-line tool and check out the valuation of parcels that are horribly underutilized downtown. You'll soon see why these are held for speculation ... the tax burden is trivial. Why build, when you can accumulate most of the value, as long-term capital gain, simply by holding on? It's particularly true for surface parking lots, where a modest income stream can offset the equally modest tax.
The corrolary is that it's not uncommon for assessed values to skyrocket tenfold when properties finally do change hands.
There are any number of properties downtown which I would happily pay two or three times their assessed value for, right now, without even an inspection. And you know what? I'll guarantee that none of the speculators who hold them would think of selling to me. That's the taxation dynamic that creates situations like the Alexandra, the Levin properties in DTX, etc.
To repeat: it's a joke.