What is interesting is that I've been hearing more about the transfer tax and land taxes lately. While the transfer tax is basically a mechanism that taxes the transfer of property, a land tax would be a tax on the land for transit, not the buildings or improvements. It makes a lot of sense for transportation given that accessibility is one of the factors which improves land values. I was also shocked to read something that made a lot of sense from the Heartland Foundation (A conservative think tank home to our favorite Wendell Cox) on using a land tax for transit.
I'm wondering also if a land tax would be enough to pay for improvements on a specific line. So if improvements were made such as a light rail line, would the increase in revenue from a land tax in the area around the improvement be enough to offset the investment over time? It's certainly an idea worth exploring.Only part of transit's benefit goes to those who pay fares. The whole community benefits from transit. Where do those benefits show up in the economy?
As dozens of studies across the globe have shown, the benefits of transit show up as increased land values. Land served by public transportation is worth more than land not served. The amount varies, of course, depending on the quality of service, type of development, general standard of living, etc., but the effect is large.
A study published in 1997 for RTA, "The Effect of CTA and Metra Stations on Residential Property Values," by Gruen Gruen & Associates, implies that just the existing rail system adds land value in excess of $1.6 billion a year.
2 comments:
i've always been fond of land tax ideas; pureley as policy ideal they make economic sense, and they conjure up historical images of thomas paine and henry george fighting their populist battles for land tax reform.
that said, your hypothetical scenario really doesn't differ that much from what goes on in cities across the country via tax increment financing. the only difference is the source (land vs prop tax). so i f the mechanism is the same, would it really make that big of a difference?
That's an interesting point Peter. Perhaps the difference would be that the whole city was a 'TIF' instead of just the area that they expected to grow? This way everyone pays their fair share, and areas that get boosts from transit will pay more but areas that still benefit pay as well. TIFs always seemed like a patchwork to me and people usually complain about money being taken away from the increases that pay for other things. So perhaps this is a way to remedy that. Of course it would be interesting to see it studied more so that we could see if it actually worked like we think it might or might not.
Post a Comment