Land Value Taxation, 4

Seattle’s business and politics communities (is that 2 things? Or just 1?) are at loggerheads over wages and inequality, and we still hear arguments that raising the minimum wage kills business, despite evidence that proves the opposite — that good wages are good for business.

But what if instead raising wages, these two (?) camps looked at why higher wages are needed — the cost of living, ie shelter costs? Rents will simply rise with wages, as we already see. Why not look into that? Where is that money going? Into the local economy? Or nah?

I don’t hear anyone in city council or city hall talking about this. Even as we see Seattle’s housing authority selling off valuable tracts of land — to the private sector rather developing them for public benefit — we hear nothing but lip service to the monied interests.

Homeowners carp about zoning changes and density, out of fear of what it will cost them when it comes time to sell their investments, er, their home. They’re not going to lose money, just maybe not get as much they wanted.

Business owners gripe about wages, threatening to raise prices or shut down and move. So far those are mostly empty threats, as employment contines to surge and business openings outpace closures.

But if they really wanted to avoid raising wages, why don’t they see what can be done about the rents their employees are paying, and the increased wages/costs they have to cover? It’s like a tariff and we know how businesses are complaining about those…

These are the same people who threaten to pass along the cost of higher wages to their customers but they haven’t figured that they are being bitten by someone else doing the same thing — those high rents are driving the need for higher wages that they then have to pay.

Maybe if they realized that they aren’t just paying rent on their business each month but on their employee’s living space as well. Just as they are pressured when their rent or other business costs rise, their employees feel the same when their rents go up.

I’m not imagining bosses and workers making common cause over many things but maybe they have a common enemy — the rentier “who makes money in their sleep,” as JS Mill said. Even developers who decry the high costs to acquire land might join in.

Land in Seattle and other thriving cities is expensive to acquire but cheap to hold over time. If you own a parcel in Seattle at 1% annual property tax, you can bide your time. The rest of us have to look at brownfields and graffiti exhibits — idled land — in the meantime.

That drives up rents on existing properties, residential and commercial, thwarting development and economic growth. If only there was a way to lower the cost to acquire land while making it expensive to hoard…maybe we wouldn’t see empty buildings and vacant lots in N Seattle.

Selling those parcels of publicly-owned land is a mistake. They should be developed for/by the city for commercial and residential needs, so they can be put to productive use. It’s time to move past the mid-century zoning mindset of a single home on 6000 sq ft.

It’s argued that Seattle was built on single family homes but a look at the census tracts downtown and on Capitol Hill refutes that. Much of what we call N Seattle was annexed after 1940…

It goes without saying that annexing all of that land meant increased tax revenues for the city. Property taxes, local sales taxes…that’s why annexations happen.

So how could Seattle get back to making the land — location, location, location — work for the people who live here, those who invested in making it valuable in the first place?

What would it take for Seattle or King County to replace property taxes — capped at 1% by state constitution — with land rent/land value taxes that reflect the real value of commercial land to the people who live here?