I think this is a very interesting idea. This would keep large swaths of downtown land from continuing on in life as parking lots. But it might also have the effect of having something built, but not quite to the density that it really should be over the long term.
How about restructuring the property tax across America to install a two-tiered system? More tax on those horizontal pieces of empty land and asphalt, less on the buildings. That is, reduce the tax rate on homes and other improvements, and substantially increase the rate on the site value. I think such a system would induce more compact development and more infill work.
Pittsburgh has used the system for years until problems arose with the way assessments worked out, as my colleague and former Pittsburgh Mayor Tom Murphy has told me. Nonetheless, if assessments are fair, the higher land tax would bring vacant or woefully under-used central sites into use, giving new life to inner cities and reducing sprawl. It would also stem land speculation, which is the big engine behind house price escalation, thus stabilizing neighborhoods and keeping sale prices and rents more affordable. The land tax returns to government--the values it creates with bridges, roads, and other infrastructure--helping to pay for maintenance and necessary improvements.
Wednesday, January 7, 2009
Restructuring Property Tax to Land Alone
I don't remember posting this when it popped up, but its something I remember a classmate discussing in grad school and I just found it again after the break. At the ULI blog: