Each year, more and more people spend more and more time in cars and on trains
and buses, to get from places where they can afford a bit of land to live on
to jobs in places that pay wages sufficient to support their families. Does
it have to be this way? Does it have to get worse year by year? Should we be
proud of, or even satisfied with, a system under which people can't afford
to buy homes in the towns in which they grew up? Who benefits from this state
of affairs, anyway?
Is there a better way? Yup! To understand why and what, spend some time
with the "essential documents
H.G. Brown: Significant
Paragraphs from Henry George's Progress & Poverty, Chapter 4: Land Speculation
Causes Reduced Wages
In communities like the United States, where the user of land generally prefers,
if he can, to own it, and where there is a great extent of land to overrun,
this cause operated with enormous power.
The immense area over which the population of the United States is scattered
shows this. The man who sets out from the Eastern Seaboard in search of the
margin of cultivation, where he may obtain land without paying rent, must,
like the man who swam the river to get a drink, pass for long distances through
half-tilled farms, and traverse vast areas of virgin soil, before he reaches
the point where land can be had free of rent i.e., by homestead entry or pre-emption.
He (and, with him, the margin of cultivation) is forced so much farther than
he otherwise need have gone, by the speculation which is holding these unused
lands in expectation of increased value in the future. And when he settles,
he will, in his turn, take up, if he can, more land than he can use, in the
belief that it will soon become valuable; and so those who follow him are again
forced farther on than the necessities of production require, carrying the
margin of cultivation to still less productive, because still more remote points.
... read the whole chapter
Karl Williams: Land
Value Taxation: The Overlooked But Vital Eco-Tax
I. Historical overview
II. The problem of sprawl
III. Affordable and efficient public transport
IV. Agricultural benefits
V. Financial concerns
VI. Conclusion: A greater perspective
Appendix: "Natural Capitalism" -- A Case Study in Blindness to
Land Value Taxation
While, at first sight, the
sprawling cities with lots of open space and possible greenery might be
appealing from an environmental perspective, a closer examination
should lead to a different conclusion. The inducement to collect
windfall profits (resulting from the failure of society to apply LVT)
encourages some landholders to withhold vacant land from the market and
forces new development to "leapfrog" this land and move further out.
Hence there is an unnecessary outlay in roads, pipelines, power
supplies and other infrastructure which must service a greater area.
Commuting journeys, similarly, must now consume greater resources.
Financially inducing land to be put to its optimal use is not
"flogging" the land, but is rather ensuring land is carefully used and
that we only exploit as much as we properly need. read
the entire article
Bill Batt: Stemming Sprawl: The Fiscal Approach
We do an awful lot of driving just to do what we need to do. This is because
transportation engineers and land use planners have confused two fundamental
concepts: access and mobility.
By confusing these two principles, we spend an inordinate amount of money
on transportation services, most of it on roads and highways. One 1993 study
calculated that the total costs of motor vehicle transportation to our society
equal approximately a fourth of our gross domestic product (GDP). The
study concluded that "when the full range of costs of transportation
are tallied, passenger ground transportation costs the American public
of $1.2 to $1.6 trillion each year. Just the costs of automobile crashes
represents a figure equal to 8 percent of the American GDP. Japan,
by way of comparison, spends an estimated 10.4 percent to satisfy all its transportation
requirements, although the figure might be a bit low because not all externalities
are included in the calculation. Road
user fees in 1991 totaled only about $33 billion, whereas the true costs to
society were ten times that; put
another way, drivers pay only 10 percent of the true costs of their motor vehicle
use. The balance is paid
by society, effectively subsidizing highway use by paying for all but the marginal
out-of-pocket operating costs.
The relationship between transportation costs and land values can be made
even clearer by empirical study of how land values increase as one moves toward
the center of the city. In an investigation for the Urban Land Institute, the
author concluded that, for Portland, Oregon, each additional mile [traveled]
translated into slightly more than $5,000 in housing costs; closer-in locations
command a premium, those farther out save money. A ten-mile difference, all
other things being equal, would amount to about $56,000 in new home value.
For a household in which one worker drives downtown (or at least to a more
central location) to work, that ten-mile difference may amount to 4,600 miles
annually, assuming 230 days of commuting and a round-trip of 20 miles each
day. Moreover, if non-work trips to the central area and elsewhere doubled
that amount, the tradeoff would be about 9,000 miles annually, which could
mean a higher/lower driving cost of $3,000 annually, not counting the time
Sooner than Americans are likely to bear the real burden of global warming's
environmental consequences, they are likely to experience the onset of price
rises for petroleum. Experts are divided, but among those best insulated from
the pressures of bias, there is increasing consensus that the peak of oil extraction
worldwide will come sometime around 2010 if not sooner. Rising
prices will not induce greater supply; it will not change the fact that the
world will have passed the point of most easily extracted oil and will enter
a long and increasingly steep period of declining availability. It is rather
a matter of physics: When it costs more in energy to bring oil from deep in
the earth than what can be extracted, it is not worth the investment. Even
the greater wealth of American society will not insulate it from world competition
over what is a limited and fungible commodity. How this alters the calculations
Americans make about where to live and work will increasingly depend on the
price they are willing to pay for transportation service. ...
Stemming Sprawl: Pricing Measures for Transportation
From the foregoing, it is clear that insofar as the causes of sprawl development
are economic, the solution needs to be economic as well. The equilibrium of
forces can be restored in two ways:
1) by charging the true marginal costs of motor vehicle transportation to
2) by recovering the economic rent from urban site owners that
is really the socially created value.
It is easy to distinguish five elements of transportation service cost: capital
investment, maintenance costs, regulation costs, environmental externalities,
and congestion costs. Each of these calls for a different treatment with respect
to revenue design. Capital costs are best recovered by recapturing the land
rent proximate to the highway corridors. This is socially created value, which
is better used to honor debt service of infrastructure investment than allowing
it to be retained as windfall gains by titleholders to property close by. User
fees, most aptly linked to the purchase of motor fuel and tire wear, serve
as a proxy for the use of the roads and can be designed to be commensurate
with use. As the wear and tear of roads as well as police patrol, snow and
ice control, and signaling all involve operating and maintenance costs, such
charges are easily linked with benefits received. In the future, still more
accurate systems of service charges are likely to appear: Singapore, Hong Kong,
and New Zealand are already reliant on electronic devices that record road
use by time, place, and vehicle weight.
Ensuring the safety of drivers and vehicles through licenses, registrations,
and inspections is most appropriately financed by fees commensurate with the
costs of their administration. This way, if a vehicle is used but seldom, it
is charged on the basis of its identification rather than assuming any projected
level of use. Environmental externalities such as pollution costs can be linked
to the polluting source, such as diesel fuel and gasoline consumption, to the
full extent necessary to equilibrate air quality and other environmental ambiences.
Congestion costs, the last of the major components of a pricing design for
highway use, are partially paid for by the time loss of those caught in traffic.
The costs of time lost due to highway congestion are enormous: In 2000, the
average driver spent 62 hours sitting in traffic at a nationwide cost of $68
billion in gas and time lost In Los Angeles, the average driver spent 136 hours
stalled in traffic at an average cost of $2,510. Commuting
times were also 20 percent longer than they were a decade ago, about 22 minutes
one way nationally on average but as high as 32 minutes on average in New York. But
not all people's time is valued equally, and people themselves value their
time differently at different times, and it is unfair to require people to
impose their congestion on others. Therefore, congestion pricing, being explored
in several urban regions, provides a rationing of limited highway space. In
a sense, that payment for space usage, in time or money, is a form of land
rent. ... read the whole article
Herbert J. G. Bab: Property
Tax -- Cause of Unemployment (circa 1964)
Property taxes shape the pattern of our cities.
- If taxes on improvements are low or non-existing and taxes
land are high, the cities are bound to grow vertically and at a fast
- If taxes on improvements are high and taxes on land are
cities will spread over larger and larger areas. They will become
metropolitan areas and they will grow at a much slower rate.
Relatively low taxes on land and
high taxes on improvements will
discourage the owners of vacant lots or underdeveloped land, such as
that used for parking lots, gas stations, hamburger stands, etc., from
improving their land. It will encourage them to keep the land out of
use and to sell later at a profit. This will create an artificial
shortage of land, which in turn will lead to urban blight and
irregular, leapfrog city growth.
This urban sprawl makes our cities look ugly, but it has many
- It gobbles up a tremendous amount of farm land;
- the farmers have to give up their land before it is really
- the building developer has to go far out to find available
- the prospective home-owner has to travel farther;
- traffic on congested roads will increase and
- new roads and schools will have to be built.
is generally believed that zoning
laws are a very effective tool to control the growth of our cities.
Zoning laws determine the best possible use of urban land. Yet nobody
can be forced to improve his land and to build unless there is an
incentive. This can be achieved by taxing land at a rate that will make
it unprofitable to hold it without improving it.
The city planner needs land taxation just as he needs zoning
both these tools the orderly growth of our cities will be assured, but
-- as experience has shown -- without land taxation rational and
efficient land usage becomes impossible.
Read the whole article