Transit Hub Tax Credits

I forgot about this, but New Jersey has a program which they give tax credits to companies that locate near transit. To me this is a great idea, since it creates a situation where existing infrastructure is taken advantage of and people have an option as to how they get to work.

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:

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.

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.

Price Signals

The Vine writers over at the New Republic discusses the end of unlimited driving insurance. They discuss how it could have a greater impact on driving than even the climate bill or energy taxes. I tend to think that the more we can get people to pay the true cost of driving, the more it will change policies that encourage walkable land uses and alternative modes of transport such as biking, walking and transit.

Prop 13 Hangover

I feel like this makes our mobility issues worse when people are unwilling to move closer to work for fear of losing their existing low taxes.

This leads to all sorts of idiotic consequences. Back when I lived in California, one of the few ways of raising taxes available to cities and towns was to increase the sales tax by some fraction of a percent. Result? Cities and towns did this, and then tried desperately to induce people to set up car dealerships and other places where people sell big, expensive things. Did it make sense to have so many car dealerships? Who cares! It's revenue!

Likewise, people in California don't always sell their houses when it would normally make sense to do so, because as long as they stay in their existing house, the assessment will not rise much and their taxes will stay low, whereas if they buy a new house, it will be assessed at its purchase price, and their taxes will go up.

"Free markets", indeed.

H/T Yglesias

More on City Competitiveness & The MEniverse

In a similar discussion as the post below on Charlotte's competitiveness, Brendan O'Shaughnessy at the Indianapolis Star discusses why it is that Indianapolis isn't as competitive. The reason? The want to keep the cost of government low.

Indianapolis spends far less than these other cities on government -- and consequently spends far less on such things as parks, public transportation, the arts and libraries, amenities that some people view as optional but that experts see as critical to making a city vibrant and competitive.

Indianapolis' spending choices underscore two core community values: thrift and an affinity for small government.

It sure explains a lot and offers a vision of what a more libertarian type future would be like. The point seems to be that they don't value the commonwealth ideals as much as regions like Portland and Seattle who value parks and libraries.

"The unwillingness to gut it up for big expenditures made it hard to keep pace with other cities," Hudnut said. "It's very tough to fund some of these necessary improvements if you campaign on a no-tax mantra."

The no-tax mantra is alive and well as we know from the famous Grover Norquist wish to shrink government so much that it could be drowned in a bathtub. But this no-tax policy also seems to be killing needed services and common goals. Unfortunately, people don't quite understand the value of networks when thinking about the beginning of transit or parks for that matter. It's all about what benefits me now and not the Universe of benefits but rather the MEniverse.

Melyssa Donaghy, an anti-tax activist with Hoosiers for Fair Taxation, acknowledges as much. "I don't use the parks except the Monon Trail," she said. "I don't think it's affecting my quality of life. What's affecting my quality of life is the ability to pay my bills."

Sure it might not be affecting your quality of life, but what about others? What about things that do affect your quality of life that others don't want to pay for. This comes up with transit as well. Why should I pay for that if I don't use it. Well, the people who will take transit often pay for your roads, why should they do that? If I take BART to work every day, why should I pay for the new Bay Bridge span? It doesn't benefit me directly. Therein lies the problem.

I think this answers why older rust belt cities are doomed to die a slow painful death. Places like Cincinnati and Indianapolis will never be havens for the creative class unless they start investing money in their cities instead of being misers. Being cheap in the MEniverse is easy. Investing in all aspects of community, well that takes civic pride and a willingness to provide common wealth for the common good.

The Option of Urbanism: Subsidizing the Rich

Here is another view of it from the Option of Urbanism. We've been taking quotes for the last week from the book.

According to Myron Orfield's Metropolitics, the affluent outer-ring suburbs in the favored quarter "dominate regional economic growth and garner a disproportionate share of the region's new roads and other development infrastructure." Orfield also pointed out that much of the funding for this infrastructure is raised from the region as a whole. For example, all car-driving residents in the region pay gas taxes to partially support the building of highways, and taxpayers of the region as a whole pay the rest of the money through their income, property, and sales taxes.

So this happens for roads, but people yell and scream bloody murder when they are taxed for transit and "it doesn't help me directly". The worst part about this as well is that cities are slowly signing on to their own declines.

The unlikely consequence of this pattern of infrastructure development is that the whole region pays for infrastructure that tends to be placed in the favored quarter; the poor pay for the infrastructure of the rich. According to Orfield, the central cities of Minneapolis and St. Paul, for example, pay $6 million a year to help move their middle class households and businesses to the edge of the region.

Part of the problem is the regional competition for jobs. Minneapolis has a tax base sharing program that might alleviate this a little, but most regions are not so lucky. And there is still exporting going on to places like Bloomington and Eden Prairie.

M1ek has discussed this before and James Rowen covered a similar issue for Milwaukee in talking about how much they give to the regional planning commission, and how little they get out of it. Perhaps this is something that needs to be put in mayor's and city council members faces. DC, for all its flaws has the right idea of trying to take care of its citizens instead of the folks who take advantage of their services during the day, but drive back out at night.

Because Everyone Wants to Live in Houston

Right? I grew up there, but don't think I'm moving back any time soon. (Sorry Mom + Dad) Sure its much less expensive, but its really hot and I would have to start using my car again. I've gotten used to my minimal car lifestyle and what I remember most about Houston is that I often had to train at midnight in order to get my mileage up in the summer because it was so hot. Even then I would get back from my run and use the garden hose to cool off even though I was already drenched. (I really like Golf Courses at midnight better than in the day though)

Ed Glaeser says its a middle class paradise when it comes to costs. What do you think? I feel like there is something missing. Isn't giving up something a cost? Isn't there a cost in a primarily car oriented lifestyle which seems to cause Houston to have somewhat of an obesity problem? I know there are a lot of people in New York or even here in San Francisco who would rather be lower on the totem pole than rich in Houston. Would San Francisco be the same place if we reduced regulations? Probably not. I don't know the overall answer to any of this, I just know that pitting one city against another is hard to do because they are such different places. So many different variables.

The IRS Raises Automobile Milage Rate

They say nothing about transit, but they allow more money to be expensed to cars. 58 cents a mile, up from 50.5 cents.