Comments on: How local property taxes discourage density

By: The roots of anti-density sentiment | Fair Housing For Developers

The roots of anti-density sentiment | Fair Housing For Developers — Fri, 18 Feb 2011 16:33:19 +0000

[…] action is still at the local level. Local property tax distortions favoring single family homes are widespread and egregious, but orders of magnitude more ink gets spilled about the relatively ineffectual mortgage interest […]

By: Anthony

Anthony — Sun, 06 Feb 2011 03:01:00 +0000

California’s property tax structure avoids most of that, by taxing the actual sale price, and limiting increases to 2% in years where the property is not sold. In fact, since apartments tend to be sold less often than single-family homes, they tend to have lower assessments relative to current value.

A minor point regarding deductibility of property taxes – only that portion based on the value of the property is deductible; any taxes on a per-parcel or square-foot basis are not deductible.

By: Paul Joice

Paul Joice — Thu, 02 Dec 2010 03:34:00 +0000

One good way to alter property tax structures to incentivize density would be to tax the value of land rather than the assessed value of a property including improvements. The idea originated (as far as I know) with an economist named Henry George in the 19th century (http://en.wikipedia.org/wiki/Georgism). It would encourage land owners to build their property up to the highest possible use, rather than penalizing them for putting a really valuable building on a small piece of land.

By: Stephen

Stephen — Wed, 01 Dec 2010 20:39:00 +0000

Huh, so basically they’re eliminating the anti-residential density bias and lessening the anti-commercial bias? That’s interesting…I wonder if any other cities are moving in that direction…

By: Stephen

Stephen — Wed, 01 Dec 2010 17:11:00 +0000

You’re right, the 18% gap does seems a little small. It’s possible that if you weighted the differentials by the amount of multifamily housing that was actually in a county, you’d get a much higher number. (I.e., maybe the calculation includes a lot of areas that have no differential, but then again also barely have any apartments.) Also, I’m not sure if they’re measuring it by unit of value, or by floorspace. I could probably go look these things up, buuuut…speculating about them on the internet is just so much more fun, isn’t it!

By: Civicst

Civicst — Wed, 01 Dec 2010 15:48:00 +0000

Well, I hate to suggest something so obvious, but renters (and owners of rental property) do not get homestead exemptions. Given the generosity of these exemptions in most parts of the country, I’m surprised the gap is only 18%. Perhaps the exemption is less generous in New York.

By: Paul Justus

Paul Justus — Wed, 01 Dec 2010 06:25:00 +0000

The Council of Georgist Organizations will be holding their annual conference in Bloomington MN this coming summer and much of it will be on capturing land value for transportation costs. http://www.cgocouncil.org/conf11.htm As you may know the Lincoln Land Institute was originally established to do research on LVT and is a depository of much information on this. The basic idea is that labor and capital, two factors of production that come from human effort should not be taxes. Taxing these factors reduces production. Taxing land — and not the buildings sitting on the land (this is capital) results in a wiser use of that land and provides incentive for higher density without the heavy hand of government planning.

By: Daniel

Daniel — Wed, 01 Dec 2010 00:22:00 +0000

Thought of another one:

From time to time, some localities give tax rebates if there is a budget surplus for the year. These are usually just refunded back to the original property taxpayer. The trouble is that renters have already essentially paid through the increased rents passed on by their landlord, but the rebates are unexpected and rarely passed back to the tenants. This happened in Montana while we were living there. Giving directly back to renters was contemplated but did not pass.