Walking along the insalubrious streets where I live, it occurred to me that a land value tax/ground rent that assessed land at its highest and best value might be a useful tool to clean up areas that aren’t tastefully run-down, ie bohemian. For example, what if a promising area of town had a couple of business that might discourage investment? How about a strip club? Or a disused car wash that occupies a lot more land that it needs to? What if the land under the strip club was re-assessed for a more desirable use — mixed-use development, housing/retail/restaurant?
I see from the tax rolls that the owner of a 22,500 sq ft parcel under the strip club also has a 15,000 sq ft parcel next door, zoned as “Vacant(Multi-family).” So the zoning is in place but what developer wants to build a multi-family project there? The business is paying about $70/sq ft, about the same as the vacant lot and disused car wash are paying, with the improvements assessed at $1000 — teardowns. An apartment building a block away pays $300/sq ft, $90/sq ft on the land alone. This is, of course, backwards: the land should be taxed at a higher rate than the improvements, to both encourage land to be developed and to its most remunerative potential.
If the parcels I have in mind were taxed at $200/sq ft, they would pay $11,500,000 vs the ~$2-3 million they remit to the assessors now. And whatever gets built there will remit still more through commercial activity (apartments need to be furnished and the people living in them need to eat, to say nothing of sales taxes from the shops and restaurants).
I don’t care about the morality of the strip club or the limited social value of a car wash (there are two others within a couple of miles) but I do care about the morality of vacant land under-appraised and underused in the midst of a housing crisis with homeless encampments right down the street. Would anyone really miss those businesses?
Next on the list:
- big box storage warehouses that create no jobs and send local wages to out of state owners
- car dealer lots: no one needs to buy off the lot
- surface parking: subsidized car storage needs to go
- strip malls: low-density and they encourage or require driving