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Wealth and Want | |||||||
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Urban
Planning
Planners
have a litany of great ideas for rebuilding cities(4)
-- set-backs, landscaping,
pedestrian bridges, bridges, etc -- but have no idea of how to pay
for them. One way is to let them pay for themselves. Improving a city
raises its land's value. A tax or fee can collect this ground rent
that can then be used to pay off the earlier investment in
ecologizing the city(5).
Indeed, the expected change in land value can be a perfect measure of
some proposed improvement's worthiness. If it can pay its way, throw
it up. If it can't, then back to the drawing board.
No longer inhibited by the property tax yet spurred by annual land dues (tax or fee), owners and developers get busy. Some Australian towns that tax land alone average 50 percent more built value per acre than those that don't. Since a mix of apartments, stores, offices, schools, theaters, etc. maximizes site value and the return to builders, they could find themselves pulling on the same end of the rope with planners. Where planners, armed with the sternest growth control measures, have failed, geonomics can succeed. By making speculation too expensive, it unplugs the "metro tub," letting the flow of development return to its natural course, filling in the vacant lots and abandoned buildings. Clever local governments, no longer able to tax willy-nilly and thus more dependent upon site rent, would squeeze streets, now overly wide for traffic, replacing parking lanes with space for sidewalk cafes beneath rows of shady trees, alongside lanes for bikes, and thereby drive up site values. ... How long would it take to
ecologize cities after shifting its
property tax? While Johannesburg (South African) levied a rate of
only 3 percent on site value, it enjoyed the fastest site-recycling
rate in the world, a little over 20 years. Within a couple decades,
we could have those cities we'd love.
As cities grow more livable and lovable, their site values rise. The resultant increase in land dues would push owners to continually convert to highest and best use automatically. In this positive feedback loop, cities would constantly renew. While generals and anarchists
might not easily find common cause,
planners and markets can, when planners paddle with, not against, the
mighty current of rent. Correcting the market, so that taxes and
rents no longer interfere with the choices of owners and developers,
would attain highest and best use of sites automatically. Read the whole article Herbert J. G. Bab: Property Tax -- Cause of Unemployment -- circa 1964
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 disadvantages besides:
It
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 laws. With 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 |
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Wealth
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... because democracy
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