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Land Value Taxation, 5

Coming back to this as a compelling argument for a land rent/land value tax on *all* commercial real estate in Seattle. Rentiers have been siphoning off wages for too long. Collectively, their holdings might dwarf everyone’s fave villain, Jeff Bezos.

The rentier makes money while he sleeps, as Adam Smith said 240 years ago…the value of the land in Seattle in a function of the people who live/invest in it. It’s not even good for business: you can’t sell overpriced land and your business might not cover your 1% taxes.

A parcel of land might have doubled or tripled in value, along with the property taxes. Good news if you can find a buyer, not good if you want to keep your business or if you waited too long to get out…vacant parcels don’t make any money beyond taxes — no jobs, no sales tax.

My TL has a few threads on this but consider the Hardwicks tool supply store in the U District, sitting on land valued at $3M while the owners carp about their 1% ($30k) in taxes. The time has come for low-rise/low density business to go. There used to be farms in Manhattan…

What happened to them? If Seattle wants to be New York (why else so many NYC place names — Brooklyn, Chelsea, Morningside?) it needs to build up and land rents will drive that, by making it uneconomical not to. Developers need cheaper land and incentives to build density.

Parking lots, low-rise shopping, houses converted to offices — all that needs to be swept away. If crane counts are the measure of success, we could see a lot more. Land rents on all commercial property will bring down land prices and housing costs.

Land rents will also redirect the flow of rents from out-of-town/int’l investors back to those who actually invested in the land — the workers and taxpayers. Seattle — and every city — belongs to those who live and work there, not a minority of landowners.

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